Optimizing ROI From Co-op/MDF

1.

Channel expenditures can run as high _ - __% of the cost of sales for many marketers.

A.

0 - 10%
B.

10 - 25%
C.

30 - 40%
D.

50 - 70%
E.

75 - 80%

Correct Answer
C. 30 - 40%

Explanation
Channel expenditures can run as high 30%-40% of
the cost of sales for many marketers—with some
companies reporing even higher. Further, the Co-op or
MDF expenses most oten represent a majority of the
channel markeing budget.

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2.

Co-op programs provide eligible channel partners with marketing allowances that:

A.

Are negotiated each year. Often, pre-approval requirements are unnecessary and guidelines are generally not used.
B.

Are negotiated each quarter. Often, pre-approval requirements are overlooked and guidelines are inconsequential.
C.

Accrue as a percentage of sales. Often, pre-approval requirements are unnecessary and guidelines are generally not used.
D.

Accrue as a percentage of sales. Often, pre-approval requirements are limited and guidelines are well defined.

Correct Answer
D. Accrue as a percentage of sales. Often, pre-approval requirements are limited and guidelines are well defined.

Explanation
Co-op programs provide eligible channel
partners with marketing allowances that accrue
as a percentage of sales. Often, pre-approval
requirements are limited and guidelines are well
defined.

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3.

MDF programs are discretionary funds provided by manufacturers to their eligible channel partners. The available funds are often not provided to channel partners in advance, but are negotiated by channel partners and their vendor to achieve specific goals. MDF programs often require less complete proof-of-performance documentation than traditional co-op programs, and pre-approval is required.

A.

True
B.

False

Correct Answer
A. True

Explanation
MDF programs are discretionary funds provided by manufacturers to their eligible channel partners. These funds are not provided in advance but are negotiated between the channel partners and the vendor to achieve specific goals. MDF programs typically require less proof-of-performance documentation compared to traditional co-op programs, and pre-approval is necessary. Therefore, the statement that MDF programs often require less complete proof-of-performance documentation than traditional co-op programs and pre-approval is required is true.

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4.

Co-op programs are more often associated with traditional advertising activities in which the costs and proof of performance is easily substantiated.

A.

True
B.

False

Correct Answer
A. True

Explanation
Co-op programs are often associated with traditional advertising activities because these activities are more easily measurable in terms of costs and proof of performance. Traditional advertising methods such as print ads, TV commercials, and radio spots usually have clear costs associated with them, and their effectiveness can be measured through metrics such as reach, impressions, and sales. Co-op programs, which involve collaboration between manufacturers and retailers, often focus on these traditional advertising activities to promote products and drive sales. Therefore, the statement that co-op programs are more often associated with traditional advertising activities is true.

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5.

MDF programs are most often associated with business development activities that are considered “nuevo expense” items as mandated by the Sarbanes Oxley doctrine

A.

True
B.

False

Correct Answer
B. False

Explanation
MDF programs are not most often associated with business development activities that are considered "nuevo expense" items as mandated by the Sarbanes Oxley doctrine. This means that the statement is false.

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6.

To maintain the classification of reimbursements as “Markeing expenses,” all of the following condiions must exist: 1. The payment covers a service by the partner that offers a clear benefit to you2. The benefit is clearly separable from the sale of the product3. The benefit could be purchased by you from a source other than the partner4. You have obtained proof of performance to reasonably esimate true cost

A.

True
B.

False

Correct Answer
A. True

Explanation
The explanation for the given correct answer is that in order to maintain the classification of reimbursements as "Marketing expenses," all four conditions mentioned must exist. These conditions include the payment covering a service by the partner that offers a clear benefit to the company, the benefit being clearly separable from the sale of the product, the benefit being available for purchase from a source other than the partner, and obtaining proof of performance to reasonably estimate the true cost. If all these conditions are met, then the reimbursements can be classified as "Marketing expenses."

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7.

The Robinson-Patman Act is a US Federal act formed in 1914 as an ani-trust law to ensure fair trade between competing retailers by limiting wholesale price discrepancies granted to them by their suppliers.One interpretation of this law is that:

A.

“All resellers must be offered similar programs on an equal basis"
B.

“All competing resellers must be offered similar programs on a proporionately equal basis"
C.

“All non-competing resellers must be offered the same program on an equal basis"
D.

“All competing resellers must be offered identical programs on a proporionately equal basis"

Correct Answer
B. “All competing resellers must be offered similar programs on a proporionately equal basis"

Explanation
The correct answer suggests that under the Robinson-Patman Act, competing resellers must be offered similar programs by their suppliers. This means that suppliers cannot provide preferential treatment or price discrepancies to one reseller over another if they are direct competitors. However, the programs offered may be proportionately equal, meaning that there can be some variations based on the size or volume of the reseller's business. This interpretation ensures fair competition and prevents unfair advantages in the marketplace.

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8.

Program Metrics generally fall into ______ form(s):

A.

One; Reporting Metrics
B.

Two; Strategic and Tactical
C.

Three; Strategic, Tactical and Analytical
D.

Four; Strategic, Tactical, Analytical and Transactional

Correct Answer
B. Two; Strategic and Tactical

Explanation
Program Metrics generally fall into two forms:
1. Strategic metrics—which represent the business
goals and may include measures such new clients,
sales, units or reference account.
2. Tactical Metrics—which are tied to specific activities
and contribute directly or indirectly to the strategic
business goals.

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9.

Based on behavioral data entered by channel partners inaccurate data is worse than no data

A.

True
B.

False

Correct Answer
B. False

Explanation
Inaccurate data is often better than none
Even inaccurate data is good if it accurately
reflects relative comparisons such as trend
reporting

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10.

Administration practices and systems should:

A.

Automate the process, enhance reporting, and streamline turn-around time
B.

Simplify the process, enable reporting, and reduce turn-around time
C.

Clarify the process, enhance reporting, and eliminate turn-around time
D.

Complement the process, enhance reporting, and measure turn-around time

Correct Answer
A. Automate the process, enhance reporting, and streamline turn-around time

Explanation
Administration practices and systems should automate the process, enhance reporting, and streamline turn-around time. This means that the practices and systems should use technology and automation to make the process more efficient and reduce the need for manual intervention. It should also improve reporting capabilities, allowing for better tracking and analysis of data. Additionally, it should aim to streamline turn-around time, meaning that tasks and processes should be completed more quickly and efficiently.

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OPtimizing ROI From Co-OP/Mdf

Channel expenditures can run as high ___ - ____% of the cost of sales for many marketers.

Co-op programs provide eligible channel partners with marketing allowances that:

Co-op programs are more often associated with traditional advertising activities in which the costs and proof of performance is easily substantiated.

MDF programs are most often associated with business development activities that are considered “nuevo expense” items as mandated by the Sarbanes Oxley doctrine

The Robinson-Patman Act is a US Federal act formed in 1914 as an ani-trust law to ensure fair trade between competing retailers by limiting wholesale price discrepancies granted to them by their suppliers.One interpretation of this law is that:

Program Metrics generally fall into ______ form(s):

Based on behavioral data entered by channel partners inaccurate data is worse than no data

Administration practices and systems should:

Channel expenditures can run as high _ - __% of the cost of sales for many marketers.