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    Marketing, Advertising, Trade Allowances, Message Evaluations

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    1) What is the primary difference between a contest and a sweepstakes? Provide an example of each.

    2) What are two advantages and two disadvantages of trade allowances?

    3) A critic has called one of your company's ads deceptive. Your advertising agency says it is only puffery. What is the difference between deception and puffery and how are these two concepts addressed by regulations?

    4) Identify and explain the typical steps in an FTC investigation sequence from the initial complaint to a decision that is appealed to the U.S. Supreme Court.

    5) An advertising manager wants to use a test market. What can be assessed using a test market, and how would a test market be used to assess each of these? .

    6) What are the three major categories of message evaluation? Explain in detail how you would use each category.

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    Solution Preview

    A. Both contest and sweepstakes are used to mean giveaways or promotion methods and are actually a marketing technique to encourage more sales. Contests and sweepstakes are two of the most common promotions but they are both different in the way they are conducted.
    While contest is a game of skill, sweepstake is a game of chance. The main difference lies on the way the winners are chosen. With sweepstakes, winners are chosen by luck or random selection whereas with contests, winners are chosen by assigned judges according to set criteria.
    Companies use sweepstakes to generate awareness and growing the customer database. It is simple and easy to join. The customer enters a few information hoping for a chance to with the prize. Smart marketers take the chance to make them opt-in to their mailing list. This is a short-term gig and happens only one time and there is no need for customers to prepare for it and they just wait for good luck to win the prize.
    Contests attempt to engage the customers with a simple activity according to criteria and have a chance to win. Contests may be in various forms such as a photo, video, essay, poem, dance, song, etc. The entry is prepared and scored as well as judged until it merits a winning or a losing position.
    B. When producers or manufacturers/marketers offer discounts of their products to distribution channel members such as wholesalers, retailers, distributors as promotional incentive for the purpose of encouraging them to keep their stocks and promote them for improved sales, they are giving trade allowance. However, this is different from a trade discount wherein the power of giving price reduction lies on the retailer. Retailers usually give wholesale prices, e.g., the higher the volume, the higher is the discount. Oftentimes, the seller allows for discounts to consumers for the purposes of trade or reselling.
    Trade allowances encourage the respective distribution channels to perform all the marketing strategies they can in order to sell the products and the channels will gain more profits because the producers are willing to ...

    Solution Summary

    * Contests & Sweepstakes: defined/explained and differentiated
    * Trade Allowances: defined/explained, advantages and disadvantages
    * Deceptive/False advertising & Puffery: defined/explained and differentiated
    * Steps in filing a complaint at the FTC
    * Test marketing explained and how it is done, as well as its challenges and risks
    * Message evaluations techniques explained
    * 1266 words
    * six non-APA references