Final Exam.doc

FINAL EXAM CHAPTERS 10—19 Short Answer Questions Describe the five pricing objectives Surplus Maximization — four equations comprise the surplus maximizing pricing model, which focuses on yielding the largest possible surplus or profit for the organization. Cost Recovery — a portion of the costs or the full costs are recovered Market Size Maximization — nonprofits maximize the number of users, making up for lower margins with volume Social Equity — services are priced to contribute to social equity (e.g. subsidized services for the poor) Market Disincentivization — pricing discourages people from purchasing a product or service (e.g. government tax on cigarettes) Define and describe channel length and breadth Breadth — the number of service outlets, e.g. one university campus or several branches Target audience members determine breadth – make no effort for mass distributed convenience goods or simple social behavior messages; some effort for shopping goods and a strong effort for specialty goods Length — The number of levels, the broader the distribution, the longer the channel Describe (or draw and describe) the communication process or Process involves a message, sender and receiver Sender formulates intended message Encoder translates it into a message Message is transmitted through a chosen medium Decoder interprets the message Receiver retains memorable parts and associations, and Provides “feedback” to the sender Extent to which the intended message matches the received message depends on noise, interference, or misunderstandings and shared (or unshared) cultural codes or backgrounds – sometimes called the common frame of reference How do the advertising objective categories, to inform, to persuade and to remind, relate to the Stages of Change? To inform (Pre-contemplation Stage) To persuade (Contemplation Stage and Preparation/Action Stage) To remind (Maintenance Stage) All elements help to know the decision process involved Stages of Change helps determine to which stage the target audience needs to be moved Stages of Change can suggest segmentation targets and be used to track progress Describe the active public relations planning process Identify the organization’s relevant publics Measure images and attitudes of the relevant publics Establish image and attitude goals for relevant publics Develop cost-effective public relations strategies Prepare for public relations crises Choose specific public relations tools Develop strategic approaches to major challenges Pay special attention to the Web site Implement actions and evaluate effects (Measure the effects) Why might some sources of revenue be undesirable for a nonprofit organization? Mission distortion could be caused by factors external to the organization such as when the donor attaches conditions (strings) forcing it in a direction it would not want Mission distortion would be caused by factors internal to the organization; such as chasing grant money in order to keep staff would deflect attention from its core mission. The revenue source costs more than it brings in due to factors external to the organization such as when a fundraising celebrity concert costs so much that it was not worth the effort The revenue source costs more than is brought in due to factors internal to the organization, such as in the case of selling products unrelated to the core function that lose money. Describe effective volunteer management Volunteers are treated like professional full-time workers, trained and held accountability The mission and priorities are framed in terms of the problem the organization is facing There is a clearly articulated positive vision of volunteers as valuable resources Leaders at all levels of the organization facilitate volunteer involvement and impact Paid employees are respected and participate in planning and managing volunteer activities Effort is made to reduce barriers and increase teamwork between paid and unpaid staff Openness exists to the possibility of changing and learning from volunteers’ experiences Volunteers are sought from all segments of the community and from those being served Research suggests that cross-sector partnerships vary on a number of dimensions, what are they? Number of partners Length of commitment Level of investment few or many initiatives Brand-level or company-level collaboration Dedicated manager and dedicated marketing budget or none Fixed or variable donation amounts Opportunities for grassroots engagement of company employees and customers or not Describe the four nonprofit organizational design alternatives for marketing Functional organization – Marketing absorbs separate functions such as public relations, advertising and market research but keeps them as separate functions (or is, itself) a separate function Offering –centered organization – One person (or sub-department) is in charge of a product or service. Each manager is in charge of its own advertising, public relations and market research Mixed (functional / offering-centered) organization – A mixture o f the previous two. Smaller nonprofits may adopt a mixed form. Functional staff departments are set up with offering sub-departments or areas, and the manager “buys” services and coordinates their use. Target market-centered organization– Organization occurs along the target audience lines with specialists for specific target groups to develop that satisfy wants and needs of those groups. Describe target audience satisfaction Satisfaction – the state felt by a person who has experienced a performance or outcome that has fulfilled his or her expectations. Understanding satisfaction — people form expectations using past experience, statements of others and marketing information. If the offering raises expectations too high, it creates dissatisfaction. Satisfaction is created when experiences matches expectations and high satisfaction when experience exceeds expectations. Multiple Choice Questions The two stages an organization should go through when deciding on monetary pricing are a. determining demand functions and conducting a break-even analysis b. determining the demand and then the response functions c. determining the pricing objective and then the pricing strategy (Moderate; pp 237-238) d. determining the perceived cost and then the monetary cost e. determining the benefit bundle and then the cost bundle A local symphony has figured, through local demand analysis that for every $1 increase in the price of its ticket, there will be a corresponding drop of 100 fewer tickets sold. If the fixed cost of a production is $100,000, the cost of each performance is $10,000 and the cost for attracting each person attending is $10. The symphony is examining five price points -$30, $35, $40, $45 and $50. The symphony historically priced its tickets at $40 and averaged attendance of 6,000 over the course of six shows. The theater’s capacity is 10,000 over the six-show run. Which price offers the optimum price point for the symphony? a. $30 b. $35 c. $40 d. $45 (Difficult; pp 238-239) (AACSB – Analytical Thinking) e. $50 Higher rates are charged for library services used by more affluent borrowers, such as DVD rentals, the pricing objective is called: a. market size maximization b. market disincentivization c. social equity (Easy p 241) (AACSB – Reflective Thinking) d. surplus maximization e. cost recovery Health Maintenance organizations’ health clinics and day surgery centers are examples of a. health care channels of distribution (Easy; p 252) (AACSB – Reflective Thinking) b. the direct marketing of healthcare c. health care occasion strategies d. the mass distribution of health care e. health care backward integration strategies A library decides to have a single, large library or a system of many branch libraries. This concerns: a. length of the channel structure b. coordination and control of the channel structure c. breadth of the channel structure (Moderate; p 257) (AACSB – Reflective Thinking) d. forward integration of the channel structure e. backward integration of the channel structure A broad strategy to use to get intermediary participation and cooperation is a. break-even analysis b. cost/benefit ratio development c. a contract (Moderate; p 261) d. forward integration e. backward integration Messages should be evaluated on a. desirability, exclusiveness and believability (Easy p 291) b. words, order and style c. content, images and mood d. product, service or behavior e. shaping, distinctiveness and behavior modification People ignore messages that do not interest them. This is called a. cognitive dissonance b. selective attention (Moderate p 282) c. assimilation/contrast d. perceptual distortion e. consequence aversion An ad using a jogger who is running along a path suddenly imaging seeing friends and “fans” cheering is using which message execution style: a. Slice-of-life b. Lifestyle c. Fantasy (Easy; p 284) (AACSB – Reflective Thinking) d. Mood e. Testimonial Advertising for state lotteries overstated the odds of winning. This is an example of a. relying too heavily on advertising b. advertising goals that are unrealistic c. the ethical implications of advertising (Moderate; p 13-4) (AACSB – Ethical Understanding and Reasoning Abilities) d. influencing changes in behavior e. advertising objectives not being in the reach of the agency A symphony will place ads on radio or TV. The decision should be based on a. the media that have been used before b. how much money it has to spend c. the media habits of the target audience (Moderate; p 306) (AACSB – Reflective Thinking) d. the type of advertising copy desired e. all of the above Once a new behavior has passed a certain point in the diffusion process, the influence of nonprofit marketers diminishes because a. there are many more people to pass along information about the behavior (Moderate; p 322) b. everyone is persuaded, so persuasion is not needed c. they no longer have the right “target audience mindset” d. some people can only be influenced by others e. the old behaviors are so established that nothing will change In the twenty-first century, public relations practitioners should pay special attention to the Web. If a PR specialist is confronted by negative blogging on a Web site not controlled by the organization, he or she should a. totally ignore it b. post a counter-argument on the blogger’s Web site using an assumed name c. post a carefully thought out and worded response on the blogger’s Web site identifying the posting as coming from the organization (Difficult; p 335) (AACSB – Ethical Understanding and reasoning abilities) d. call lots of friendly bloggers and others who think highly of the organization and ask them to put something positive in other blogs e. create their own blog and “join the fray” “A form of communication not paid for or under the control of the nonprofit marketing organization through which the organization must earn coverage” is: a. public relations b. earned media (Easy; p 326) c. earned advertising d. publicity e. blogging A nonprofit organization’s CEO has been arrested for embezzlement. In handing the media, the PR person should a. say “no comment” b. convey that there is nothing to worry about c. release information pointing to someone else being at fault d. get the facts and release the information quickly (Moderate; p 334) (AACSB – Reflective Thinking) e. say that the nonprofit will be hiring a new CEO Nothing can tarnish the reputation of a nonprofit as fast as a. not meeting fundraising goals b. poor management of financial trusts (Moderate; p 378) (AACSB – Ethical understanding and reasoning abilities) c. deriving revenues from sources unrelated to their core mission d. using a ”hard sell” in working with donors e. asking volunteers to do too much The attitude in a customer oriented strategy for fundraising is: a. We have a good cause and people will support us b. There is lots of money out there and we just need to show doors why they should give c. We must understand people’s motivations and find those whose interests match our own (Easy; p 355) d. We must target all potential revenue sources even if some need a hard sell approach e. We have to adopt a retail goods component to our nonprofit in order to have balance According to Robert Sharpe, individual donors can be segmented according to a. life cycle stage and giving patterns (Moderate: p 365) b. income and education levels c. occupation and lifestyle level d. geographical region e. age and occupation A Board decides that a lottery is an inappropriate fundraiser in low-income neighborhoods. The board is performing which of the following functions? a. expertise b. linking to the environment c. volunteering d. oversight (Moderate; p 397-398) (AACSB – Reflective Thinking) e. marketing Volunteerism is an “exchange” because a. volunteers can come and go as they wish b. the benefits of volunteering come at the cost of time and energy (Easy p 385) c. volunteers participate in freely chosen activities d. volunteers take a “vow of poverty” in order to work for a nonprofit e. volunteers participate in decision making and planning Widmer’s research on recruiting nonprofit Board Members concluded that a. most people join people not causes (Moderate; p 400) b. lack of time for volunteering was not a problem c. Young women who have children at home and are not working are readily recruited to be Board members because they want to get out of the house d. Having unrealistic expectations of the organization was not a problem e. learning new skills was not important to board members What key dimension should be considered when selecting which partnerships to pursue in a nonprofit’s portfolio of social alliances? a. what will it cost the nonprofit to grow the relationship b. Show how the corporation will benefit in terms of the nonprofit’s strategic and tactical interests c. Have ventures yield economic resources d. Take risks and have a large number of “low-potential” partnerships because one could really pay off at a low investment e. Have ventures at all three stages of the collaboration continuum. (Moderate; p 431) The local Catholic Community Hospital is seeking a partner for a women’s fitness club called “stroller fit” which is aimed at women of child bearing age who already have a young child (of stroller age 1-4) at home. Which of the following types of business would be the best one to approach with the project. a. A local planned parenthood affiliate b. A local HMO health plan (Moderate; pp 426-427) (AACSB – Reflective Thinking) c. A local automobile dealership d. A National bicycle manufacturer e. A National restaurant chain You are a manager of a local Homeless Shelter and 85% of your “clients” are homeless men, most are military veterans. You are approached by a PR agency and told that your nonprofit has been designated as a recipient of a program created by one of their clients, a nationally known women’s clothing firm, will take “trade-ins” on dresses, and donate the used dresses to your organization. They ask where you want the first load of dresses delivered. You should: a. Ask for money instead b. politely decline to take delivery and suggest one of your “competitors”, a shelter that also takes in battered women, and work with them to take the dresses and share the publicity (Moderate; pp 426-427) (AACSB - Ethical Understanding) c. Call your contact at local newspaper to get some publicity d. Ask what time the dresses will be delivered e. Sue the corporation You have been assigned to work in the Ciallis division of the large pharmaceutical giant Eli Lilly and company, located in Indianapolis, Indiana, U.S.A. Your marketing responsibilities require you to work on marketing Ciallis worldwide with a single universal strategy. The international marketing model at Eli Lilly is: a. The Export Department model b. The Multi-national model c. The Global Organization model (Moderate; p. 450) (AACSB – Reflective Thinking) d. The functional design model e. The home office model It is best for the nonprofit marketing director to have a line function (instead of staff function) so as to a. advise programs or people b. be a resource person or consultant c. influence top management to think in a marketing mindset (Moderate; p. 444) d. not be constrained by planning and programs e. avoid being absorbed by public relations or fund development Implementing a target-audience orientation within an organization usually involves a. diffusing responsibility to the functional units b. effective plans and planning system support (Moderate; p 456) c. trying to reduce the impact of drastic change d. A vice president of marketing to be the organization’s highest marketing executive and is responsible for creating the climate for marketing e. better pay and rewards for all employees A symphony orchestra compares expected ticket sales to actual ticket sales. This approach a. measures effectiveness (Moderate; p 467) (AACSB – Reflective Thinking) b. predicts future sales c. measures customer satisfaction d. measures long-term success e. measures organizational value As part of it’s policy on ethical standards, the Better Business Bureau encourages nonprofits to a. dissemination of accurate, truthful and candid information b. information on any cause-marketing alliances and how they benefit the charity c. pay careful attention to privacy issues that might arise d. have effective compliance systems available e. all of the above (Easy; p 480) (AACSB – Ethical Understanding) A political candidate makes a speech. To measure response before and after the speech a. it is best to use a mail questionnaire to audience members b. it is best to use cross sectional polls of audience members c. it is best to use the same panel of audience members (Moderate; p 469) (AACSB – Reflective Thinking) d. it is best to use telemarketing and call a random sample of audience members e. it is best to monitor media and do a media content analysis 12