Chapter 14 Direct, Online, Social Media, and Mobile Marketing Part 3

68) What is telemarketing? A) It is the process of promoting products through 30-minute-long infomercials. B) It is a form of marketing that uses the telephone to sell directly to businesses and consumers. C) It is the process of marketing products and services using direct-response television advertising. D) It is a marketing system where product information is provided through unmanned ordering machines. E) It is the process of selling products through affiliate networks and social media sites. Answer: B Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 69) Which of the following is an example of inbound telemarketing? A) Sterrns Media advertises its services by sending letters to potential customers and prompting them to contact the firm through a toll-free number. B) Sterrns Media purchases customer information and later cold calls these customers to generate potential leads. C) Sterrns Media spends a lot of time and effort to train its sales force to call businesses and inform them about its B2B products. D) Sterrns Media utilizes interactive cable systems to enable customers to obtain product information by using their TV remotes. E) Sterrns Media airs advertising programs called infomercials to attract viewers and get them to order products from its website. Answer: A Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 70) Which of the following has been limited in recent years by the implementation of the National Do Not Call Registry? A) calls by nonprofit groups B) business-to-business telemarketing C) unsolicited outbound telemarketing by businesses D) inbound telephone marketing E) "opt-in" calling systems Answer: C Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 71) Which of the following direct marketing forms includes infomercials? A) direct-response television marketing B) outbound telephone marketing C) print-catalog marketing D) direct-mail marketing E) face-to-face marketing Answer: A Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 72) A 30-minute or longer advertising program on television that markets a single product is called a ________. A) phishing program B) direct response TV C) podcast D) catalog E) spambot Answer: B Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Written and oral communication 73) Technologies such as interactive cable systems, Internet-ready smart TVs, and smartphones and tablets allow consumers to use their TV remotes, phones, or other devices to obtain more information or make purchases directly from TV ads. This is referred to as ________ advertising. A) virtual world B) interactive TV C) direct-response TV D) podcast E) e-catalog Answer: B Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Information technology 74) M&Ms engages DirecTV or Dish Network viewers in a candy themed video game through the arrow keys on their television remotes. This is an example of ________ advertising. A) virtual world B) interactive TV C) direct-response TV D) podcast E) e-catalog Answer: B Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 75) ________ are everywhere these days, from self-service hotel and airline check-in devices to in-store ordering devices that let you order merchandise not carried in the store. A) Infomercials B) Viral videos C) Kiosks D) Podcasts E) Catalogs Answer: C Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Application of knowledge 76) Green Gardens sells gardening and landscaping goods and equipment. The marketing department places an unmanned machine in the store with touchscreen technology to provide product information. Consumers can use this machine to learn about the company's products and services. The company's marketing form is best referred to as ________ marketing. A) kiosk B) mobile C) telephone D) interactive E) personalized Answer: A Diff: 3 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 77) Which of the following is a type of identity theft that uses deceptive emails and fraudulent websites to fool consumers into revealing their personal data? A) cold calling B) crowdcasting C) viral marketing D) phishing E) crowdsourcing Answer: D Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 78) Fox Scully received an email promoting a new financial services institution that offers surprisingly low mortgage rates. The email asked customers to provide their address, date of birth, Social Security number, and current mortgage information in order to receive a free loan quote. Suspicious of the offer, Fox researched the company and discovered that the email was fraudulent. This is an example of ________. A) cold calling B) phishing C) crowdsourcing D) data mining E) viral marketing Answer: B Diff: 3 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 79) Which of the following is generally regarded as the toughest issue of public policy and ethics confronting the direct marketing industry? A) customization of search results B) unwanted email spam C) invasion of consumer privacy D) increasing costs of browsing E) restrictions on digital offers and discounts Answer: C Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 80) The Children's Online Privacy Protection Act requires online operators targeting children to ________. A) educate children about digital technologies B) post privacy policies on their sites C) collect and store the personal information of parents of these children D) collect personal information from children under age 13 for security purposes E) avoid sending emails to the parents of children whom they target Answer: B Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 81) Which of the following is true of the Privacy Promise launched by the Direct Marketing Association (DMA)? A) It forbids all DMA members from spending excessively on digital advertising. B) It requires all DMA members to notify customers when any personal information is rented, sold, or exchanged with others. C) It recommends that DMA members help each other by sharing customer psychographic data. D) It forbids DMA members from sending email, mail, or phone offers to any customer. E) It encourages DMA members to create more digital content that is tailored for children under age 13. Answer: B Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 82) Printed catalogs fail to increase in-store, online, and mobile sales. Answer: FALSE Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Written and oral communication 83) An advantage of direct mail marketing over digital forms is that it provides something tangible for people to hold and keep and it can be used to send samples. Answer: TRUE Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Written and oral communication 84) Whereas space is limited in an online catalog, print catalogs can offer an almost unlimited amount of merchandise. Answer: FALSE Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Written and oral communication 85) Using sophisticated big data analytics, direct marketers can mine these databases to "microtarget" their selling efforts. Answer: TRUE Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 86) Properly designed and targeted telemarketing provides many benefits, including purchasing convenience and increased product and service information. Answer: TRUE Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Written and oral communication 87) Marketers use inbound telephone marketing to sell to customers directly. Answer: FALSE Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Written and oral communication 88) For inbound telephone marketing, the company provides a toll-free phone number so it can receive orders solicited by television, print ads, direct mail, and catalogs. Answer: TRUE Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Application of knowledge 89) The National Do Not Call Registry is managed by the Federal Trade Commission. Answer: TRUE Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 90) Telemarketing is infrequently used as a fundraising tool for nonprofit and political groups. Answer: FALSE Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Written and oral communication 91) Although do-not-call legislation has hurt parts of the consumer telemarketing industry, inbound and outbound consumer telemarketing remain strong and growing. Answer: FALSE Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 92) Direct-response television (DRTV) marketing takes one of two major forms: direct-response television advertising and interactive TV (iTV) advertising. Answer: TRUE Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Application of knowledge 93) iTV lets viewers interact with television programming and advertising using their remote controls. Answer: TRUE Diff: 1 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Information technology 94) Nellie Wills, an emergency medicine professional, is getting married in six months. Since her job is very demanding, Nellie lacks the time to go shopping for all the products and services she requires for the wedding. However, Nellie is a careful shopper and likes to evaluate many alternatives before finalizing a purchase. Explain at least one direct marketing method that may meet the specific needs of Nellie. Answer: (Students' answers may vary. The answer given below is indicative.) Since Nellie is a careful shopper who is short of time, printed catalogs would be a good option. Printed catalogs cover a wide range of products and have many other advantages as well. With the stampede to the Internet and digital marketing, more and more catalogs are going digital. Digital catalogs eliminate printing and mailing costs. And whereas space is limited in a print catalog, online catalogs can offer an almost unlimited amount of merchandise. They also offer a broader assortment of presentation formats, including search and video. Finally, online catalogs allow real-time merchandising; products and features can be added or removed as needed, and prices can be adjusted instantly to match demand. Customers can carry digital catalogs anywhere they go, even when shopping at physical stores. Diff: 3 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 95) How has the implementation of the National Do Not Call Registry changed telephone marketing? Answer: The National Do Not Call Registry was created by legislation passed in 2003; it bans most business telemarketing calls to registered phone numbers. However, people can still receive calls from nonprofit groups, politicians, and companies with which they have recently done business. Millions of customers have joined the do-not-call list, and businesses that break the law can be fined heavily. The use of unsolicited outbound telemarketing has greatly decreased due to the law, but inbound consumer telemarketing and outbound business-to-business telemarketing remain strong and growing. Telemarketing also remains a major fundraising tool for nonprofit and political groups. Interestingly, do-not-call regulations appear to be helping some direct marketers more than it's hurting them. Rather than making unwanted calls, many of these marketers are developing "opt-in" calling systems, in which they provide useful information and offers to customers who have invited the company to contact them by phone or email. The opt-in model provides better returns for marketers than the formerly invasive one. Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 96) Describe direct-response television (DRTV) marketing. Answer: Direct-response television (DRTV) marketing takes one of two major forms: directresponse television advertising and interactive TV (iTV) advertising. Using direct-response television advertising, direct marketers air television spots, often 60 or 120 seconds in length, which persuasively describe a product and give customers a toll-free number or an online site for ordering. It also includes full 30-minute or longer advertising programs, called infomercials, for a single product. A more recent form of direct-response television marketing is interactive TV (iTV) marketing. It lets viewers interact with television programming and advertising using their remote controls. Interactive TV gives marketers an opportunity to reach targeted audiences in an interactive, more involved way. Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 97) Define telemarketing, and distinguish between outbound and inbound telemarketing. Answer: Telemarketing involves using the telephone to sell directly to consumers and business customers. U.S. marketers spent an estimated $43 billion on telemarketing last year, almost as much as on direct mail. We're all familiar with telephone marketing directed toward consumers, but business-to-business (B-to-B) marketers also use telemarketing extensively. Marketers use outbound telephone marketing to sell directly to consumers and businesses. They also use inbound toll-free numbers to receive orders from television and print ads, direct mail, or catalogs. Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Analytical thinking 98) What are the main privacy concerns and Internet security issues associated with online marketing? Answer: Some direct marketers have been accused of taking unfair advantage of impulsive or less-sophisticated buyers. Television shopping channels, enticing websites, and program-long infomercials targeting television-addicted shoppers seem to be the worst culprits. They feature smooth-talking hosts, elaborately staged demonstrations, claims of drastic price reductions, "while they last" time limitations, and unequaled ease of purchase to inflame buyers who have low sales resistance. Fraudulent schemes, such as investment scams or phony collections for charity, have also multiplied in recent years. One common form of Internet fraud is phishing, a type of identity theft that uses deceptive emails and fraudulent online sites to fool users into divulging their personal data. Although many consumers are now aware of such schemes, phishing can be extremely costly to those caught in the net. It also damages the brand identities of legitimate online marketers who have worked to build user confidence in Web, email, and other digital transactions. Many consumers also worry about online and digital security. They fear that unscrupulous snoopers will eavesdrop on their online transactions and social media postings, picking up personal information or intercepting credit and debit card numbers. Another Internet marketing concern is that of access by vulnerable or unauthorized groups. Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 99) Internet marketing practices have raised a number of ethical and legal questions. Why is invasion of privacy perhaps the number-one online marketing concern? Answer: Invasion of privacy is perhaps the toughest public policy issue now confronting the direct marketing industry. Consumers often benefit from database marketing; they receive more offers that are closely matched to their interests. However, many critics worry that marketers may know too much about consumers' lives and that they may use this knowledge to take unfair advantage of consumers. At some point, they claim, the extensive use of databases intrudes on consumer privacy. Consumers, too, worry about their privacy. Although they are now much more willing to share personal information and preferences with marketers via digital and social media, they are still nervous about it. In these days of "big data," it seems that almost every time consumers post something on social media or send a tweet, visit a website, enter a sweepstakes, apply for a credit card, or order products by phone or online, their names are entered into some company's already bulging database. Using sophisticated big data analytics, direct marketers can mine these databases to "microtarget" their selling efforts. Most marketers have become highly skilled at collecting and analyzing detailed consumer information both online and offline. Even the experts are sometimes surprised by how much marketers can learn. Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning 100) Describe the various legislative actions that have been taken to regulate the manner in which online, social media, and mobile operators obtain and use consumer information. Answer: To curb direct marketing excesses, various government agencies are investigating not only do-not-call lists but also do-not-mail lists, do-not-track online lists, and Can Spam legislation. In response to online privacy and security concerns, the federal government has considered numerous legislative actions to regulate how online, social media, and mobile operators obtain and use consumer information. For example, Congress is drafting legislation that would give consumers more control over how online information is used. In addition, the FTC is taking a more active role in policing online privacy. Of special concern are the privacy rights of children. In 2000, Congress passed the Children's Online Privacy Protection Act (COPPA), which requires online operators targeting children to post privacy policies on their sites. They must also notify parents about any information they're gathering and obtain parental consent before collecting personal information from children under age 13. With the subsequent advent of online social media, mobile phones, and other digital technologies, Congress in 2013 extended COPPA to include "identifiers such as cookies that track a child's activity online, as well as geolocation information, photos, videos, and audio recordings." The main concern is the amount of data mined by third parties from social media as well as social media's own hazy privacy policies. Many companies have responded to consumer privacy and security concerns with actions of their own. Still others are taking an industry-wide approach. For example, TRUSTe, a nonprofit self-regulatory organization, works with many large corporate sponsors, including Microsoft, Yahoo!, AT&T, Facebook, Disney, and Apple, to audit privacy and security measures and help consumers navigate the Internet safely. According to the company's website, "TRUSTe believes that an environment of mutual trust and openness will help make and keep the Internet a free, comfortable, and richly diverse community for everyone." To reassure consumers, the company lends its TRUSTe privacy seal to websites, mobile apps, email marketing, and other online and social media channels that meet its privacy and security standards. The direct marketing industry as a whole is also addressing public policy issues. For example, in an effort to build consumer confidence in shopping direct, the Direct Marketing Association – the largest association for businesses practicing direct, database, and interactive marketing, including nearly half of the Fortune 100 companies – launched a "Privacy Promise to American Consumers." The Privacy Promise requires that all DMA members adhere to a carefully developed set of consumer privacy rules. Members must agree to notify customers when any personal information is rented, sold, or exchanged with others. They must also honor consumer requests to opt out of receiving further solicitations or having their contact information transferred to other marketers. Finally, they must abide by the DMA's Preference Service by removing the names of consumers who do not wish to receive mail, phone, or email offers. Diff: 2 LO: 14-5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. AACSB: Ethical understanding and reasoning