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Chapter 16—Advertising, Public Relations, and Sales Promotion TRUE/FALSE 1. New brands with a small market shares tend to spend proportionately more for advertising and sales promotion than do those with large market shares. Answer: True Rationale: New brands with smaller market shares often allocate a higher proportion of their budgets to advertising and sales promotion compared to brands with larger market shares. 2. The advertising response function is a phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing results. Answer: True Rationale: The advertising response function describes how increased spending on advertising and sales promotion initially boosts sales or market share, but beyond a certain point, further spending may result in diminishing returns, where additional expenditures do not yield proportional increases in sales or market share. 3. The goal of advertising is to change people’s values. Answer: False Rationale: Advertising cannot change a person’s basic value system, moral code, or cultural influences. Advertising instead tries to change consumers’ attitudes about brands. 4. On Subway napkins, nutritional information for their 6-inch subs is compared to McDonald’s Big Mac and Burger King Whopper. This is an example of competitive advertising. Answer: False Rationale: Comparative advertising specifically compares two or more products. 5. The goal of competitive advertising is to influence demand for a specific brand. Answer: True Rationale: Competitive advertising aims to influence demand for a specific brand by positioning it favorably against competitors. 6. The DAGMAR approach is one method of setting advertising objectives. Answer: True Rationale: DAGMAR (Defining Advertising Goals for Measured Advertising Results) is indeed a method used for setting advertising objectives, focusing on defining clear and measurable goals to ensure advertising effectiveness and success. 7. An appeal to vanity and egotism is the reason celebrity spokespeople are used so often in advertising. Answer: False Rationale: This common advertising appeal is admiration. See Exhibit 16.1. 8. An insurance company’s advertisement poses the question, “Will your family survive if you die uninsured?” This is an example of a health appeal. Answer: False Rationale: This is an example of a fear appeal. See Exhibit 16.1. 9. There are many snack foods for children, but only Nature’s Path makes an organic snack designed for a child’s palate. The product’s unique selling proposition is that it is completely organic. Answer: True Rationale: Nature’s Path's unique selling proposition (USP) for its organic snack designed for children is its completely organic nature, which differentiates it in the market. 10. Humorous executional styles are more often used in radio and television advertising than in print or magazine advertising. Answer: True Rationale: Humorous styles are more prevalent in radio and television advertising because these mediums allow for audiovisual storytelling and comedic timing, which can engage audiences effectively. 11. One of the most popular approaches for Internet advertising is search engine ads. Answer: True Rationale: Search engine ads are highly popular in Internet advertising due to their targeted nature, appearing when users search for specific keywords related to products or services. 12. Advergaming is an Internet advertising format where companies put ad messages in Web-based or video games to advertise or promote products. Answer: True Rationale: Advergaming involves integrating advertising messages into web-based or video games, leveraging the interactive and engaging nature of gaming platforms to promote products subtly. 13. Mobile advertising may be one of the most promising tactics for contacting consumers when they are thinking about a specific product. Answer: True Rationale: Mobile advertising capitalizes on reaching consumers at opportune moments when they are actively engaged with their mobile devices, making it a promising tactic for targeted marketing and influencing purchasing decisions. 14. Publicity is the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance. Answer: False Rationale: The statement describes public relations. Publicity is the outcome of these public relations efforts. 15. An example of product placement is when the judges on American Idol are shown sipping Coca-Cola during the broadcast. Answer: True Rationale: Product placement refers to integrating branded products or messages into entertainment content, such as television shows or movies, to subtly promote them to viewers or audiences. 16. Influencing legislators and government officials is an example of a public relations activity. Answer: True Rationale: Public relations activities include influencing legislators and government officials to create a favorable environment or legislation for a company or industry. 17. Companies increasingly are using the Internet in their public relations strategies. Answer: True Rationale: Companies are increasingly utilizing the internet for various public relations strategies, such as social media campaigns, online press releases, and influencer partnerships. 18. In our free-press environment, publicity is not easily controlled. Answer: True Rationale: Publicity, which is a part of public relations, involves information spread through media that is not directly controlled by the company, making it difficult to control the message in a free-press environment. 19. Sales promotion offers an incentive to buy. Answer: True Rationale: Sales promotion involves offering incentives, such as discounts, coupons, or contests, to stimulate immediate consumer purchasing. 20. The objectives of a promotion depend on the general behavior of target consumers. Answer: True Rationale: The objectives of a promotion strategy are tailored to influence the behaviors of target consumers, such as increasing sales, generating leads, or enhancing brand awareness. 21. Research shows that coupons tend to increase the amount of a product bought. Answer: True Rationale: Research indicates that coupons encourage consumers to purchase larger quantities of a product than they might otherwise buy. 22. When cosmetics company Estée Lauder gives customers a bag of small-sized cosmetics with the purchase of a full-priced item, this is an example of a premium offer. Answer: True Rationale: Offering customers a free bag of small-sized cosmetics with the purchase of a full-priced item is an example of a premium offer, which is a sales promotion technique designed to add value and encourage purchases. 23. Point-of-purchase promotions are seldom used as a sales promotion tool because most purchase decisions are made before consumers ever enter a store. Answer: False Rationale: Point-of-purchase promotions are an extremely important sales promotion tool because between 70 and 80 percent of all retail purchase decisions are made in the store. 24. A trade allowance is a price reduction offered by retailers to customers who are buying homogeneous shopping goods. Answer: False Rationale: A trade allowance is a price reduction offered by manufacturers to intermediaries. 25. Trade association meetings, conferences, and conventions are an important aspect of sales promotion and a growing, multi-billion-dollar market. Answer: True Rationale: Trade association meetings, conferences, and conventions play a crucial role in sales promotion by providing opportunities for networking, knowledge sharing, and showcasing products or services, contributing to a significant and expanding market in the business events industry. MULTIPLE CHOICE 1. _____ is any form of impersonal, sponsor-paid, one-way mass communication. A. Publicity B. Advertising C. Promotion D. Public relations E. Direct marketing Answer: B Rationale: This defines advertising. 2. Kraft’s marketing efforts for its Macaroni & Cheese include television commercial and magazine inserts. These are all activities associated with: A. advertising. B. publicity. C. public relations. D. sales promotions. E. direct marketing. Answer: A Rationale: Advertising is any form of impersonal, paid communications that are paid for by a marketer. 3. In 2011, advertising expenditures: A. increased. B. decreased. C. Equaled those in 2010. D. equaled those in 2012. E. were not tracked. Answer: A Rationale: Expenditures increased in 2011 and were expected to grow by about 5.5 percent globally in 2012. 4. Why do many brands with a large market share spend proportionally less on advertising compared to brands with small market share? A. Beyond a certain volume of promotion, diminishing returns set in. B. Certain industries have a practice of spending a low amount of dollars, relative to sales, on advertising. C. There is no minimum level of exposure for advertising to have an effect on sales. D. Advertising will not stimulate economic growth for the industry. E. The firms with large market share do not have to advertise anymore. Answer: A Rationale: Sales and market share improvements slow down and eventually decrease no matter how much is spent on advertising and sales promotion. 5. The advertising response function helps marketers: A. create ads that will be noticed by consumers each time the ad runs. B. use their advertising budgets wisely. C. calculate the break-even points for each product being advertised. D. determine the reach and frequency of specific media. E. select an executional appeal appropriate to the product being advertised. Answer: B Rationale: The advertising response function is a phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing results. 6. Why do companies with new brands that have a small market share tend to spend proportionately more for advertising and sales promotions compared to those with a large market share for existing products? A. As a result of experiential marketing research B. To create the appropriate level of institutional advertising C. To determine which executional appeal is the most effective D. To achieve a certain minimum level of exposure to measurably affect purchase habits E. To prevent product cannibalization Answer: D Rationale: There are two reasons why companies with new brands with small market share tend to spend proportionately more for advertising and sales promotions compared to those with existing products and large market share. The first reason is in response to the advertising response function. The second reason is to create product awareness in the minds of the target audience. 7. When Gillette introduced its Venus razor for women several years ago, it spent $100 million on advertising and other promotions and successfully boosted its market share. As an advertising consultant, you would advise Gillette to now: A. double its advertising budget in order to double its market share. B. maintain the current advertising budget and continue to focus on brand awareness and market share gains. C. slowly increase the amount spent on advertising and promotion to offset competitive advertisements. D. shift the budget dollars from advertising to sales promotion and personal selling due to a change in the product life cycle stage. E. focus on maintaining market share and spend proportionately less on advertising because additional expenditures would reap diminishing benefits. Answer: E Rationale: The advertising response function shows that beyond a certain level of spending for advertising and sales promotion, diminishing returns set in. As a mature, successful company, Gillette can choose to spend only as much as needed to maintain market share. 8. How can advertising affect consumers? A. It can change cultural practices and conventions B. It can change strongly held values C. It can manipulate society against its will D. It can change negative attitudes to positive ones E. It can make people buy things they do not want Answer: D Rationale: Advertising can affect attitudes but cannot alter values or force people to do things they do not want to do or believe are wrong. 9. _____ advertising is designed to enhance a company’s image rather than promote a particular product. A. Publicity B. Institutional C. Pioneering D. Selective E. Image Answer: B Rationale: This is the definition of institutional advertising. 10. Tobacco company Philip Morris runs television ads where they promote quitting smoking and direct viewers to a Web site for support and help. These ads are examples of _____ advertising. A. product B. institutional C. pioneering D. environmental E. comparative Answer: B Rationale: Institutional advertising is a form of advertising designed to enhance a company’s image rather than promote a particular product. 11. DuPont has an advertisement that shows police officers describing how they were shot at close range in the line of duty. The advertisement explains that the lives of these public servants were saved by Kevlar bullet-proof vests and that Kevlar was invented by DuPont. This is an example of _____ advertising. A. publicity B. attribute C. image D. pioneering E. institutional Answer: E Rationale: Institutional advertising is designed to enhance the image of the company and asks for no action except maintaining a favorable attitude toward the advertiser and its goods and services. 12. Which form of advertising involves an organization expressing its views on controversial issues or responding to media attacks? A. Advocacy B. Persuasive C. Issue D. Comparative E. Image Answer: A Rationale: This is the definition of advocacy advertising. 13. Exxon Mobil has launched a series of ads promoting its commitment to alternative energy sources during a time when the company is recording record profits while consumers struggle with high gas prices and environmentalists are concerned that burning fossil fuels is contributing to the acceleration of global warming. This is an example of _____ advertising. A. global B. homogeneous C. pioneering D. advocacy E. image Answer: D Rationale: Advocacy advertising is a means for organizations to express their viewpoints on various controversial issues or respond to media attacks. 14. Unlike advertising that establishes or maintains a company’s identity, _____ advertising touts the benefits of a specific good or service. A. selective B. cooperative C. advocacy D. image E. product Answer: E Rationale: This is the definition of product advertising. 15. Kia Motors runs television advertisements that encourage the purchase of their Kia Soul compact car. This is an example of _____ advertising. A. pioneering B. circumstantial C. product D. advocacy E. comparative Answer: C Rationale: Product advertising touts the benefits of a specific product or service. 16. Pioneering advertising, competitive advertising, and comparative advertising are all types of: A. institutional advertising B. product advertising C. primary advertising D. commercial advertising E. commissioned advertising Answer: B Rationale: Product advertising promotes the benefits of a specific good or service, and the types used are pioneering, competitive, and comparative advertising. 17. Instead of sending artfully arranged flower bouquets, an entrepreneur has developed fresh fruit bouquets and is marketing them under the name Edible Arrangements. The premium fruit is cut to mimic flowers, arranged in a basket, and carefully delivered to the recipient’s home. One of the problems is convincing people that it is not a novelty product, but an attractive way to show how you feel about someone. Edible Arrangements will be using _____ advertising to promote its fruit bouquets. A. pioneering B. innovative C. introductory D. start-up E. focused Answer: A Rationale: Pioneering advertising is heavily utilized during the introductory stage of the product life cycle. 18. Cranium, the Seattle-based toy company, has recently introduced Giggle Gear, a toy designed to let kids’ imagination run wild. With the face and headpieces that make up Giggle Gear, kids can change themselves into aliens, fairies, bugs, and robots. What type of advertising will this company be using to promote this new toy? A. Pioneering B. Innovative C. Promotional D. Start-up E. Comparative Answer: A Rationale: Pioneering advertising is intended to stimulate demand for a new product. 19. Which form of advertising is designed to influence demand for a specific brand? A. Institutional B. Primary C. Competitive D. Direct E. Growth Answer: C Rationale: Competitive advertising is used when a product enters the growth phase of the product life cycle and other companies begin to enter the marketplace. 20. An emphasis on branding generally begins as firms use _____ advertising. A. comparative B. differentiational C. pioneering D. institutional E. competitive Answer: E Rationale: The goal of competitive advertising is to influence demand for a specific brand. Such advertising is less informational and more emotional. The emphasis is on brand name recall and a favorable attitude toward the brand. 21. _____ advertising compares two or more specifically named or shown competing brands on one or more specific attributes. A. Contrasting B. Comparative C. Pioneering D. Superlative E. Differentiational Answer: B Rationale: This is the definition of comparative advertising. 22. An ad in which Dunkin’ Donuts tells consumers that more “hard-working” people prefer their coffee than the high-priced, “elitist” coffee sold at Starbucks is an example of _____ advertising. A. competitive B. institutional C. comparative D. image E. pioneering Answer: C Rationale: This comparative advertising names Dunkin Donut’s competitor, Starbucks, and distinguishes the differences in the network coverage. 23. Around election time every year, we see ads on television claiming that one candidate is superior to another in terms of experience, capability, and/or ethics. Sometimes opponents are named and even vilified in these _____ ads. A. differential B. cooperative C. advocacy D. comparative E. image Answer: D Rationale: Comparative advertising compares two or more specifically named or shown competing brands on one or more specific attributes. 24. Which of the following statements about comparative advertising is true? A. Comparative advertising is highly effective in Arabic countries. B. The FCC is the only federal agency that has any regulatory power over comparative advertising. C. Comparative advertising is often used for products experiencing strong growth. D. Comparative advertising is regulated by the FTC in the United States. E. Comparative advertising is illegal in the United States. Answer: D Rationale: Federal rulings prohibit advertisers from falsely describing competitors’ products and allow competitors to sue if ads show their products or mention their brand names in an incorrect or false manner. FTC rules also apply to advertisers making false claims about their own products. 25. A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals is referred to as a(n): A. advertising campaign. B. message strategy. C. continuity program. D. flight. E. creative program. Answer: A Rationale: This is the definition of an advertising campaign. 26. An advertising campaign: A. may contain a wide variety of themes and slogans. B. extends for a defined period of time. C. continues for the life of the product. D. starts with determining which media will be used. E. rarely has a specific budget. Answer: B Rationale: The advertising campaign is a series of related advertisements that focus on a common theme, slogan, and set of advertising appeals and extends for a defined period of time. 27. A(n) _____ is a specific communication task that a campaign should accomplish for a specified target audience during a specified period. A. advertising objective B. marketing mix C. media schedule D. advertising life span E. promotional mix Answer: A Rationale: This is the definition of an advertising objective. 28. Before any creative work can begin on an advertising campaign, it is important to: A. determine what goals or objectives the advertising should achieve. B. set the marketing budget. C. decide what executional style to use in the ads. D. see if sales promotion is more important. E. hire a spokesperson. Answer: A Rationale: The first step in any advertising campaign is to set advertising objectives. 29. One method used for setting advertising objectives is: A. campaign budgeting. B. objective and task. C. the DAGMAR approach. D. percentage of sales. E. contribution margin. Answer: C Rationale: According to the DAGMAR approach, all advertising objectives should precisely define the target audience, the desired percentage change in some specified measure of effectiveness, and the time frame in which that change is to occur. 30. DAGMAR is an acronym for: A. Defining and Achieving Goals Means Advertising Reach. B. Developing Aggressive Markets. C. Designing Advertising with Market Research. D. Defining Advertising Goals for Measured Advertising Results. E. Developing Aggressive Growth Markets and Revenues. Answer: D Rationale: The DAGMAR approach (Defining Advertising Goals for Measured Advertising Results) is a method of setting objectives. 31. A feature of a product is called a(n): A. asset B. appeal C. attribute D. element E. benefit Answer: C Rationale: Attributes are features, while benefits are what consumers will receive or achieve by using the product. 32. Ads for Yoplait Greek Yogurt highlight that the product has twice the protein and three times the calcium of other yogurts. This advertising highlights: A. product attributes. B. the creation of brand loyalty. C. how negative consumers’ attitudes are modified. D. product benefits. E. loyalty rewards. Answer: A Rationale: The calcium and protein content are considered product attributes. 33. Which of the following is what consumers will receive or achieve by using a product? A. Attribute B. Benefit C. Compensation D. Market share E. Functionality Answer: B Rationale: Benefits might be such things as convenience, pleasure, savings, or relief. 34. The UPS Store’s advertising “What Brown Can Do for You” whiteboard campaign tells business consumers that when it comes to getting their products delivered somewhere, UPS can help. The advertising is focusing on: A. creating advertising appeal. B. production implementation. C. a product mission. D. creating product loyalty. E. a product benefit. Answer: E Rationale: A benefit is what customers will receive or achieve by using the product or service. 35. A newspaper ad for General Mills cereal highlights its Box Top Redemption program in which General Mills donates cash to schools when the schools redeem box tops from General Mills cereal. This ad focuses on: A. a product attribute. B. production implementation. C. a product mission. D. creating product loyalty. E. a product benefit. Answer: E Rationale: The ad answers the customer’s question, “What’s in it for me?” 36. In advertising, the goal is to sell the _____, not the _____ of a product. A. benefits; attributes B. characteristics; appeals C. values; traits D. competitive edge; virtues E. differential advantage; properties Answer: A Rationale: A well-known rule of thumb in advertising is “Sell the sizzle, not the steak.” 37. An advertising _____ identifies a reason for a person to buy a product. A. profile B. execution C. format D. execution E. appeal Answer: E Rationale: This is the definition of an advertising appeal. 38. All of the following are common types of advertising appeals EXCEPT: A. profit. B. health. C. admiration. D. fear. E. commitment. Answer: E Rationale: See Exhibit 16.1. Commitment is not typically considered a common type of advertising appeal. The other options—profit, health, admiration, and fear—are commonly used in advertising to appeal to different consumer motivations or emotions. 39. A print ad for Kraft Capri Sun drink packs says “take a sip of antioxidant protection.” What kind of an advertising appeal is this ad using? A. Convenience B. Fun and pleasure C. Health D. Profit E. Admiration Answer: C Rationale: See Exhibit 16.1. Health appeals to those who want to be healthy. 40. Gucci, a very expensive brand of clothing and accessories, show beautiful women wearing its products in magazine ads. What kind of an advertising appeal is this? A. Environmental consciousness B. Vanity and egotism C. Health D. Profit E. Admiration Answer: B Rationale: See Exhibit 16.1. Showing beautiful women wearing Gucci products in magazine ads appeals to vanity and egotism, as it associates the brand with ideals of beauty, status, and personal attractiveness. 41. Ads for Brita water filters describe how one Brita pitcher filter can reduce waste by effectively replacing as many as 300 standard plastic water bottles. What kind of appeal is this ad using? A. Environmental Consciousness B. Vanity and Egotism C. Health D. Profit E. Admiration Answer: D Rationale: See Exhibit 16.1. This ad is using a profit appeal by emphasizing cost savings and economic benefits (reducing waste by replacing plastic water bottles with a Brita pitcher filter). 42. An ad for Crystal Geyser bottled water shows why and how the bottler supports the reforestation of America’s forests. What kind of an advertising appeal is this ad using? A. Environmental Consciousness B. Concern C. Health D. Profit E. Admiration Answer: A Rationale: See Exhibit 16.1. The ad for Crystal Geyser bottled water supporting reforestation of America's forests appeals to environmental consciousness, highlighting the brand's commitment to environmental sustainability and conservation efforts. 43. Allstate Insurance has mostly ditched its famous “in good hands” ads in favor of a character called “Mayhem,” who shows up in your life at random — and trashes it. What kind of advertising appeal were these ads using? A. Fear B. Consequences C. Health D. Vanity and egotism E. Consciousness Answer: A Rationale: See Exhibit 16.1. Allstate Insurance's "Mayhem" ads use a fear appeal by depicting unexpected and chaotic situations that could occur without insurance, emphasizing the need for protection against potential risks. 44. Many advertisements use celebrities who are liked by many people in hopes that consumers will buy the product that the celebrity endorses. Using celebrities to influence consumers to buy the product is an example of which advertising appeal? A. Consciousness B. Love or romance C. Fun and pleasure D. Admiration E. Resonance Answer: D Rationale: See Exhibit 16.1. Using celebrities to influence consumers to buy the product is an example of an admiration appeal, leveraging the positive feelings and admiration consumers have for celebrities to enhance the perceived value or desirability of the product. 45. A(n) _____ is a desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. A. executional framework B. creative message strategy C. benefit D. attribute E. unique selling proposition Answer: E Rationale: The advertising appeal selected for the campaign becomes what advertisers call its unique selling promotion, and it usually becomes the campaign slogan. 46. IBM runs television ads that show how their information technology services can help a small Internet start-up prepare for and solve any problems that may arise in its daily operations. This is an example of a: A. unique selling proposition. B. advertising objective. C. media profile. D. basis for comparative advertising. E. basis for product identification. Answer: A Rationale: A unique selling proposition is a desirable, exclusive, and believable advertising appeal selected as a theme for an advertising campaign. 47. M&M’s famous slogan, “Melts in your mouth, not in your hand,” is an example of a(n): A. unique selling proposition. B. advertising objective. C. basis for lifestyle strategy. D. promotional mix. E. basis for comparative advertising. Answer: A Rationale: A unique selling proposition is a desirable, exclusive, and believable advertising appeal selected as a theme for an advertising campaign. 48. Ads for M&M candy that prominently feature the M&M candies in real-life situations are using a _____ style. A. slice-of-life B. lifestyle C. animated product symbol D. demonstration E. scientific Answer: C Rationale: The real/animated product symbol executional style creates a character that represents the product in advertisements. 49. _____ is the way the advertisement portrays its information. A. Message execution B. Appeal formation C. Focus selection D. Audience selection E. Benefit determination Answer: A Rationale: The style in which the message is executed is one of the most creative elements of an advertisement. 50. Which of the following statements is NOT true about post-campaign evaluation? A. Marketers spend little time studying advertising effectiveness because there are so many variables that shape the effectiveness of an ad. B. Testing ad effectiveness can be done either before or after the campaign. C. Most advertising campaigns aim to create an image for the product instead of asking for action, so their real effect is unknown. D. Even if an ad campaign has been particularly successful, advertisers will typically conduct a post-campaign evaluation. E. Evaluating an advertising campaign can be the most demanding task facing advertisers. Answer: A Rationale: Even though there are so many variables that shape the effectiveness of an ad, marketers spend a considerable amount of time studying advertising effectiveness and its probable impact on sales, market share, or awareness. 51. The _____ is the channel used to convey a message to a target market. A. medium B. product network C. attribute D. appeal E. executor Answer: A Rationale: This is the definition of a medium, which is a major decision for advertisers. 52. _____ is the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience. A. Promotional implementation B. Marketing mix planning C. Media planning D. Media reach and frequency strategy E. Media targeted selection Answer: C Rationale: This is the definition of media planning. 53. Television is an example of an advertising: A. medium. B. network. C. attribute. D. appeal. E. execution. Answer: A Rationale: A medium is the channel used to convey a message to a target market. 54. Which of the following statements about the selection of media for advertising is true? A. Creative planning for an ad that goes on a billboard is the same as the planning for an ad that runs on television. B. The media selection is typically unrelated to the advertising objectives. C. The appeal and executional style of the ad often affect the media selection. D. Creative work is finished before the media are selected. E. Media selection is the first step in developing an advertising campaign. Answer: C Rationale: In many cases, the advertising objectives dictate the medium and the creative approach to be used. 55. Outdoor advertising is: A. inflexible and high-cost. B. inflexible and low-cost. C. flexible and high-cost. D. flexible and low-cost. E. not an actual medium. Answer: D Rationale: Outdoor (or out-of-home) advertising is a flexible, low-cost medium that may take a variety of forms. Outdoor advertising reaches a broad and diverse market and is therefore ideal for promoting convenience products and services as well as directing consumers to local businesses. 56. _____ advertising has the advantages of being both timely and geographically flexible. A. Television B. Newspaper C. Outdoor D. Magazine E. Catalog Answer: B Rationale: Newspapers are often used by local retailers because they are current and flexible and directed to a local but wide market. 57. _____ advertising is an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. A. Advocacy B. Comparative C. Institutional D. One-to-one E. Cooperative Answer: E Rationale: This is the definition of cooperative advertising. 58. An ad for the new Magnifique perfume by Lancome shows that it can be purchased at Macy’s. This ad is most likely an example of _____ advertising. A. comparative B. institutional C. cooperative D. advocacy E. strategic Answer: C Rationale: Cooperative advertising is an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. 59. Advertising in the form of a 30-minute advertisement that resembles a television talk show is called a(n): A. Infomercial. B. extended sales pitch. C. mega-mercial. D. ad expander. E. prolonged advertisement. Answer: A Rationale: Infomercials are an attractive advertising vehicle for many marketers because of the relatively inexpensive airtime and the lower production costs. 60. The many uses of OxiClean products are shown in a program-length television commercial. This is a(n) _____ form of advertising. A. mega-mercial B. ad expander C. infomercial D. prolonged ad E. extended sales pitch Answer: C Rationale: Advertising in the form of a 30-minute advertisement that resembles a television talk show is called an infomercial. 61. Placing advertising messages in Web-based or video games to advertise or promote a product, service, organization, or issue is known as: A. embedded message. B. subliminal advertising. C. advergaming. D. blogging. E. social networking. Answer: C Rationale: This is the definition of advergaming. Sometimes the entire game amounts to a virtual commercial; other times advertisers sponsor games or buy ad space for product placement. 62. Arkadium creates games adults and kids can play on the Internet. While people play these games, advertising creatively appears in or around the game. Their clients include General Motors, NBC, Warner Bros., and more. Arkadium is creating _____ to reach target markets for its clients. A. an infomercial B. a videomercial C. a relationship tool D. advergaming E. an interconnect Answer: D Rationale: Advergaming is the placing of advertising messages in Web-based or video games to advertise or promote a product. 63. The U.S. Army created a video game called America’s Army to boost its recruiting efforts. The game is an example of: A. an interconnect. B. a videomercial. C. advergaming. D. a relationship tool. E. an infomercial. Answer: C Rationale: Advergaming is the placing of advertising messages in Web-based or video games to advertise or promote a product––in this case, the U.S. Army. 64. Ads on shopping carts at grocery stores and in screen savers are examples of: A. communications networks. B. alternative media. C. distribution channels for ads. D. outdoor advertising. E. direct advertising. Answer: B Rationale: Alternative media are those other than the traditional mediums of television, newspaper, outdoor, radio, and magazines and include things like shopping carts in grocery stores, computer screen savers, DVDs, CDs, interactive kiosks in department stores, and so on. 65. When an advertiser decides how much space and/or time will be placed in each advertising medium the company wants to use, the advertiser is determining its: A. marketing mix. B. media mix. C. promotional plan. D. advertising campaign. E. reach objectives. Answer: B Rationale: The media mix is the combination of media to be used for a promotional campaign. 66. All of the following are used for making media mix decisions EXCEPT: A. media schedule. B. cost per contact. C. reach. D. frequency. E. audience selectivity. Answer: A Rationale: The media schedule will be the result AFTER the media mix decisions are made, based on the other four factors. 67. _____ is the cost of reaching one member of the target market. A. Cost per contact B. Cost per thousand C. Gross rating D. GRP E. Effective reach Answer: A Rationale: This is the definition of cost per contact, and advertisers use this to compare media vehicles, such as television versus radio or magazine versus newspaper. 68. _____ measures the number of target consumers exposed to a commercial at least once during a specific period, usually four weeks. A. Noise level B. Frequency C. Reach D. Synchronization E. Cost per contact Answer: C Rationale: This is the definition of reach. 69. _____ is a measure of the number of times an individual is exposed to a brand message. It is used to measure the intensity of a specific medium’s coverage. A. Synchronization B. Reach C. Cost per contact D. Media scheduling E. Frequency Answer: E Rationale: Advertisers use average frequency to measure the intensity of a specific medium’s coverage. 70. The ability of an advertising medium to reach a precisely defined market is called: A. audience selectivity B. market singularity C. geographic selectivity D. noise filtering ability E. life span Answer: A Rationale: This is the definition of audience selectivity. 71. Media vehicles like People magazine and The Chicago Tribune appeal to a wide cross section of the population. In contrast, Self magazine and The Food Network have high levels of: A. longevity. B. audience selectivity. C. geographic selectivity. D. flexibility. E. market singularity. Answer: B Rationale: Some media vehicles, like general newspapers and network television, appeal to a wide cross section of the population. Others appeal to very specific groups. 72. Prices on items sold by supermarkets change frequently, and they often offer special sales to match or beat the prices of their competitors. Therefore, _____ would be a major consideration when a supermarket selects an advertising vehicle. A. audience duplication B. noise level C. life span D. cost per contact E. flexibility Answer: E Rationale: Flexibility of the medium refers to the ability to change the message to fit changing market conditions. 73. Billboard advertisements often have to compete for a driver’s attention with traffic, passengers, radio, or other billboards. Billboard advertising would be described as: A. lacking any geographic selectivity. B. the most flexible advertising medium. C. having a high noise level. D. having a low noise level. E. being a great channel for informative ads. Answer: C Rationale: Noise level is the amount of distractions––other advertisements, people, competing sounds in the environment, or news stories––involved with a type of medium. Outdoor advertising such as billboards suffers from a great deal of competing noise. 74. Advertisers are often concerned with the noise level in a medium. The medium that is assumed to have the lowest noise level is: A. radio. B. television. C. direct mail. D. newspaper. E. magazines. Answer: C Rationale: Direct mail is a private medium with a low noise level. 75. Because Samuel Cabot, Inc., a manufacturer of premium-grade wood stains, wants to spend its promotional budget on timely advertisements that target a large out-of-home audience and have low unit and production costs, it should use _____ advertising. A. newspaper B. radio C. television D. magazine E. creative Answer: B Rationale: Radio has several strengths as an advertising medium: selectivity and audience segmentation, a large out-of-home audience, low unit and production costs, timeliness, and geographic flexibility. 76. In the 1960s, there were only three television networks and most consumers only received these three channels plus a local channel. Now, consumers have more than 1,600 channels to choose from. This is an example of which problem facing media planners? A. Media fragmentation B. Flighted media C. Effective frequency D. Effective reach E. Media consolidation Answer: A Rationale: Media planners have hundreds more media options today than they had when network television reigned. 77. A(n) _____ designates the medium or media to be used, the specific vehicles, and the insertion dates of the advertising. A. advertising plan B. media schedule C. promotion strategy D. ad outline E. promotional profile Answer: B Rationale: This is the definition of a media schedule. 78. Which type of advertising is used to stimulate demand for a new product or product category? A. Comparative B. Innovative C. Focused D. Image E. Pioneering Answer: E Rationale: This is the definition of pioneering advertising, which is heavily utilized during the introductory stage of the product life cycle. 79. Meek’s Hunting Emporium is a retail store that carries all the products hunters need or think they need. It has set up an advertising plan that allows it to advertise every day prior to the opening of quail-, deer-, and turkey-hunting seasons on four local radio stations, as well as in the local newspapers. This is an example of a: A. message execution plan. B. media profile. C. reach program. D. media schedule. E. frequency timetable. Answer: D Rationale: The media schedule designates when and where advertising will appear. 80. Products in the latter stages of the product life cycle, which are advertised on a reminder basis, use a(n) _____ media schedule. A. intermittent B. bursting C. continuous D. trailing E. unremitting Answer: C Rationale: A continuous schedule allows the advertising to run steadily throughout the advertising period, which is good for advertising on a reminder basis. 81. Pepsi-Cola uses reminder advertising that runs steadily all year. This is an example of a _____ media schedule. A. seasonal B. pulsing C. flighted D. consecutive E. continuous Answer: E Rationale: A continuous media schedule allows advertising to run steadily throughout the advertising period. 82. The Swine Palace Theater runs ads in the entertainment section of the local newspaper every first weekend of each month. This is a _____ scheduling plan. A. flighted B. continuous C. bursting D. seasonal E. replication Answer: A Rationale: Flighted media scheduling schedules ads heavily for a period, then drops them, and then repeats them. 83. A(n) _____ media schedule combines continuous scheduling throughout the year with a flighted schedule during the best sales periods. A. pulsing B. bursting C. unremitting D. rhythmic E. vibrating Answer: A Rationale: A retail department might use a pulsing media schedule by advertising on a year-round basis but place more advertising during certain sale periods such as holidays. 84. The Tween Scene is a retail store catering to 8- to 12-year-old boys and girls. It advertises regularly both on radio and in the daily newspaper. The month prior to the beginning of each new school year, the store buys extra advertising space and time. This is an example of a(n) _____ scheduling plan. A. continuous B. replication C. interval D. seasonal E. pulsing Answer: E Rationale: A pulsing media schedule combines continuous scheduling with an extra “pulse” during heavy sale periods. 85. Which of the following products is most likely to use a pulsing media schedule? A. Romance novels B. Gasoline C. Band instruments D. Baking soda E. Ceiling fans Answer: C Rationale: Band instruments would be most heavily advertised just prior to the opening of the new school year. 86. Which of the following products is most likely to have a seasonal media schedule? A. Aromatherapy candles B. Masking tape C. Airplane tickets D. Charcoal E. Soft drinks Answer: D Rationale: Seasonal products like charcoal are not advertised year-round because they are not used year-round. 87. The main premise of _____ planning is that advertising works by influencing the brand choice of people who are ready to buy. A. stealth B. guerrilla C. pulsing D. recency E. seasonal Answer: D Rationale: Recency planning is commonly used for scheduling television advertising for frequently purchased products such as Coca-Cola or Tide detergent. 88. Every day around lunchtime, Rascal’s Deli sends text messages advertising daily specials to customers on their GPS-enabled mobile phones. This is an example of: A. recency planning. B. guerrilla marketing. C. pioneering advertising. D. executional style. E. a seasonal media schedule. Answer: A Rationale: Recency planning’s main premise is that advertising works by influencing the brand choice of people who are ready to buy—such as urging hungry consumers to stop into Rascal’s Deli around lunchtime. 89. Products such as snowblowers, chocolate Easter eggs, mittens, and sunscreen lotion are most likely to be advertised with a _____ media schedule. A. flighted B. pulsing C. seasonal D. continuous E. consecutive Answer: C Rationale: Products that are used more during certain times of the year tend to follow a seasonal strategy. 90. _____ is the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance. A. Personal selling B. Advertising C. Mass communications D. Public relations E. Sales promotion Answer: D Rationale: This is a description of public relations. 91. A news story on the resignation of Steve Jobs as CEO of Apple—complete with descriptions of the numerous innovations he pioneered during his tenure—is an example of: A. a sales promotion. B. free advertising. C. demarketing. D. newspaper advertising. E. publicity. Answer: E Rationale: Publicity can be either positive or negative. 92. Public information about a company, good, or service appearing in the mass media as a news item is: A. personal selling B. advertising C. mass communications D. publicity E. sales promotion Answer: D Rationale: Publicity can be either positive or negative. 93. Tools for the public relations manager include all of the following EXCEPT: A. press relations. B. product publicity. C. lobbying. D. sales promotions. E. corporate communication. Answer: D Rationale: Sales promotions are not part of public relations. 94. An article in BusinessWeek about the reengineered Honda CRV is an example of: A. a sales promotion. B. free advertising. C. direct marketing communications. D. newspaper advertising. E. publicity. Answer: E Rationale: Publicity is the effort to capture media attention. 95. Publicity: A. will never damage a company because it performs the information task of promotion. B. is free communication. C. is not persuasive with customers. D. has to be purchased from the mass media. E. has many internal costs to the company associated with it. Answer: E Rationale: Preparing news releases, staging special events, and persuading media personnel to broadcast or print publicity messages costs money. 96. A Wall Street Journal headline is “Best Buy Wins iPhone Lineup.” This article represents _____ for Best Buy and Apple, Inc. A. marketing research B. sales promotion C. personal selling D. advertising E. publicity Answer: E Rationale: Publicity can help advertisers explain what’s different about their new product by prompting free news stories or positive word of mouth about it. 97. An article in the Wall Street Journal about GM’s turnaround strategy and new upcoming product, the Volt, would be an example of: A. direct selling B. news marketing C. publicity D. event marketing E. direct marketing Answer: C Rationale: Publicity can help advertisers explain what’s different about their new product by prompting free news stories or positive word of mouth about it. 98. Which of the following is a public relations strategy that involves getting a product, service, or company name to appear in a movie or television show? A. Press release B. Product placement C. Product publicity D. Consumer education E. Integrated marketing communications Answer: B Rationale: This is product placement, which also involves getting a product to appear in other venues such as radio programs, magazines, newspapers, and video games, among others. 99. Stormbreaker, a new spy movie, details the story of Alex Rider who, after the death of his uncle, is recruited as an M16 spy. Armed with a special set of gadgets, Rider’s mission is to save millions of lives. In James Bond fashion, the Cross pen serves as one of the key gadgets in the film. The maker of the Cross pen paid to have its pen featured in this movie. This is an example of: A. advertising. B. a sales promotion. C. paid-for public relations. D. product placement. E. lobbying. Answer: D Rationale: Product placement is a public relations tool and is used to create product exposure. 100. BMW of North America sponsored an instructional driving school for teenagers in major cities across the U.S. Teens received a training session that included driving techniques and accident avoidance skills.This is an example of: A. event advocacy B. lobbying C. product placement D. consumer education E. issue sponsorship Answer: D Rationale: Consumer education is a type of public relations in which the user benefits by educating the consumer about the usefulness of its products. 101. Which public relations tool involves a company spending money to support an issue, cause, or event that is consistent with corporate objectives? A. Advocacy B. Lobbying C. Product placement D. Sponsorship E. Underwriting Answer: D Rationale: Corporate objectives for sponsorship include improving brand awareness or enhancing corporate image. 102. The biggest category of sponsorships involves _____, which accounts for almost 68 percent of spending in sponsorships. A. education B. arts and festivals C. political causes D. sports E. music Answer: D Rationale: Sponsorship is a public relations tool that involves a company spending money to support an issue, cause, or event that is consistent with corporate objectives. The biggest category is sports. 103. How do public relations professionals use Internet Web sites? A. To introduce new products B. To promote existing products C. To obtain consumer feedback D. To showcase upcoming events E. To do all of these things Answer: E Rationale: Companies increasingly are using the Internet in their public relations, and it is used for all of these reasons. 104. _____ is used by public relations specialists to handle the effects of unfavorable publicity. A. Media planning B. Crisis management C. Message power D. Damage control E. Communication narrowcasting Answer: B Rationale: Crisis management is the coordinated effort to handle the effects of unfavorable publicity or of another unexpected unfavorable event. 105. _____ is marketing communication activities in which a short-term incentive is offered to induce the purchase of a particular good or service. A. Publicity B. Sales promotion C. Promotion D. Advertising E. Motivation selling Answer: B Rationale: Sales promotion includes marketing activities––other than personal selling, advertising, and public relations––that stimulate consumer buying and dealer effectiveness. 106. Neutrogena offered customers who purchased $30 worth of facial moisturizers, facial cleaners, and facial treatment products a $10 rebate by mail. This is an example of: A. motivational selling. B. a trade promotion. C. a push strategy. D. personal selling. E. a sales promotion. Answer: E Rationale: Sales promotion is an activity in which a short-term incentive encourages the purchase of a particular good or service. 107. What are the two types of sales promotion? A. Consumer and trade B. Informative and reminder C. Start-up and continual D. Adoptive and diffusive E. Personal and impersonal Answer: A Rationale: Sales promotion is usually targeted toward two distinctly different markets: consumers and the trade. 108. All of the following would be a target for a trade sales promotion offered by Rubbermaid, a manufacturer of storage and organization products, EXCEPT: A. a retailer called The Container Store. B. a kitchen department in a large discount store. C. a wholesaler of plastic storage bins. D. a Rubbermaid distributor. E. a consumer who needs to organize her college dorm room. Answer: E Rationale: Trade promotions are directed to members of the marketing channel, such as wholesalers and retailers. 109. About what percentage of consumers uses coupons or discount promotional codes when making purchases online? A. 0 percent B. 25 percent C. 50 percent D. 75 percent E. 100 percent Answer: C Rationale: Nearly 50 percent of consumers who make purchases online use coupons or discount promotional codes. 110. Martina buys cola every week at the grocery store, but she always buys whatever is on sale. Coca-Cola, Pepsi, RC Cola—it doesn’t matter to her. She is happy with whatever costs the least. Martina would be characterized as a: A. loyal customer. B. competitor’s customer. C. price buyer. D. cherry picker. E. freeloader. Answer: C Rationale: Price buyers consistently buy the least expensive brand. See Exhibit 16.4 111. When Rick purchased a Xerox color printer for his law office, he was able to mail in a proof-of-purchase and his cash register receipt to receive a check from Xerox for $200. Rick received a: A. premium. B. trade allowance. C. purchase allowance. D. rebate. E. functional discount. Answer: D Rationale: A rebate is a cash refund given for the purchase of a product during a specific period. 112. A(n) _____ is an extra item offered to the consumer, usually in exchange for some proof that the promoted product has been purchased. A. coupon B. trade sample C. supplement D. premium E. add-on Answer: D Rationale: Probably the best example of a premium is the toy inside a McDonald’s Happy Meal. 113. New subscribers to Men’s Health magazine receive a free copy of Men’s Health Total Fitness Guide. The Fitness Guide is an example of a(n): A. contest. B. premium. C. trade sample. D. product placement. E. loyalty incentive. Answer: B Rationale: A premium is an extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product. 114. Which type of consumer sales promotion rewards loyal consumers for making multiple purchases of a particular good or service? A. A frequent buyer program B. An 80/20 program C. A net worth program D. A premium program E. A continuity program Answer: A Rationale: These are also called loyalty marketing programs. 115. Jack’s Pet Store offers customers who purchase pet food a “Baker’s Dozen” card. After customers purchase 12 bags of pet food from Jack’s, they get the 13th bag free. The Baker’s Dozen card is an example of a: A. directed coupon mailing. B. sweepstakes. C. loyalty marketing program. D. trade sales promotion. E. sampling program. Answer: C Rationale: Loyalty marketing or frequent buyer programs induce brand loyalty by rewarding customers for multiple purchases. 116. Co-branded credit cards are used in conjunction with: A. self-perpetuating premiums. B. loyalty marketing programs. C. trade consumer promotions. D. consumer discount programs. E. functional consumer discounts. Answer: B Rationale: Co-branded credit cards are an increasingly popular loyalty marketing tool. 117. The Pillsbury Bake-Off requires people to submit a recipe using Pillsbury baking products. Finalists are brought to Pillsbury kitchens to bake their recipes so the winner of a cash prize can be chosen. This is an example of a: A. contest. B. sales promotion game. C. sweepstakes. D. push money deal. E. P-O-P (participant of Pillsbury). Answer: A Rationale: Contests are promotions in which participants use some skill or ability to compete for prizes. 118. Which of the following statements about contests and sweepstakes is true? A. Contests depend on luck, and participation is free. B. Contests are generally effective tools for creating long-term relationships with customers. C. Sweepstakes are promotions that require participants to exhibit some skill. D. Sweepstakes usually draw about ten times more participants than contests. E. Contests and sweepstakes are not useful for creating interest and publicity. Answer: D Rationale: Contests require participants to have some skill. Sweepstakes are based on chance. Neither contests nor sweepstakes can be used if the marketer’s objective is to create a long-term relationship with its customers, though they may generate short-term interest. 119. Club Penguin is an online role-playing game for kids aged 6 to 14 operated by the Walt Disney Company. Players pay a monthly fee to gain access to all of Club Penguin’s feature, although free memberships with limited access to games is also available. Disney offers free membership to Club Penguin in the hope that kids who like the game will ask their parents to pay for the full version. Disney is using which sales promotion tool? A. Sponsorship B. Sampling C. Trade promotions D. In-pack couponing E. Premiums Answer: B Rationale: Sampling allows the consumer to try a product risk-free. 120. _____ are promotional exhibits set up at the retailer’s location to build traffic, advertise the product, or induce impulse buying. They are targeted to consumers. A. Point-of-purchase displays B. Freestanding inserts C. Indirect demonstrations D. Direct demonstrations E. Freestanding kiosks Answer: A Rationale: Point-of-purchase promotion includes any promotional display set up at the retailer’s location to perform these functions. 121. Point-of-purchase promotions work best for: A. high-involvement products. B. purchases that require extensive decision making. C. complex products that require technical knowledge to operate. D. impulse buys. E. expensive products like perfume and jewelry. Answer: D Rationale: Point-of-purchase promotions are most effective for impulse items. 122. Which of the following statements about online sales promotions is true? A. Internet sales promotions are more effective and cost-efficient at generating responses than their off-line counterparts. B. One of the few types of sales promotion that cannot be used online is sampling. C. Online coupons have lower redemption rates than off-line coupons. D. Loyalty marketing programs are ineffective when used at Web sites to encourage traffic. E. There is no way for a marketer to build long-term, mutually beneficial relationships with customers online. Answer: A Rationale: Customer loyalty programs are very effective on Internet sites to build customer loyalty. Sampling is a sales promotion option that can be effectively used by Internet businesses. Online coupons have a higher redemption rate than off-line coupons. 123. Lopez is the largest Hispanic-owned meat processor in the United States. To assist retailers in marketing its products, Lopez provides point-of-sale materials and offers special introductory discounts to retailers. Lopez uses: A. functional marketing. B. relationship selling. C. consumer promotions. D. startup marketing. E. trade promotions. Answer: E Rationale: Trade promotions push a product through the distribution channel, which includes retailers and wholesalers. 124. All of the following are examples of trade sales promotions EXCEPT: A. push money B. store demonstrations C. premiums and coupons D. free merchandise E. trade shows Answer: C Rationale: Premiums and coupons are directed at consumers. 125. General Mills is offering resellers a 10 percent discount on all cases of its granola bars purchased during the month of June. General Mills is offering a: A. trade allowance. B. life cycle extension promotion. C. P-O-P discount. D. push money deal. E. product development deal. Answer: A Rationale: A trade allowance is a price reduction offered by manufacturers to intermediaries, such as wholesalers or retailers, in exchange for performance of specified functions or purchasing during special periods. 126. General Motors is offering the sales force at Meers Furniture Emporium a $100 reward for each Chevy Volt sold in the next 30 days. What type of trade sales promotion is the $100? A. A trade allowance B. Push money C. A selling deal D. Premium payment E. A direct commission Answer: B Rationale: Intermediaries receive push money as a bonus for pushing the manufacturer’s brand. 127. The use of trade shows: A. is not an important aspect of sales promotion. B. can help companies identify new prospects. C. does not help introduce new products. D. does not enhance corporate morale. E. is a disadvantage in that it is usually impossible to display the product itself. Answer: B Rationale: Companies participate in trade shows to attract and identify new prospects, serve current customers, introduce new products, enhance corporate image, test the market response to new products, enhance corporate morale, and gather competitive product information. LeBlanc’s Pecan Company Betty and Orville LeBlanc recently opened LeBlanc’s Pecan Company retail store. In addition to shelled and unshelled pecans, the Texas store sells pecan pies, tortes, fruitcakes, fudge, pralines, chocolate pecan bark, homemade pecan ice cream toppings, and jams and jellies. At this time, there are no other stores of this type in the Houston area. The LeBlancs are considering developing an advertising campaign for their store, focusing on its wide assortment of pecan-related products. Orville LeBlanc has drawn up a list of communication tasks the advertising must accomplish. He used the DAGMAR approach to draw up this list. 128. Refer to LeBlanc’s Pecan Company. The new campaign for the store is designed to stimulate demand for the LeBlanc’s new store, given that the store is in the introductory stage of the product life cycle. The campaign would be considered: A. pioneering. B. comparative. C. institutional. D. exclusive. E. open-ended. Answer: A Rationale: The campaign is pioneering because it is designed to stimulate demand for a new store, given that the store is in the introductory stage of the product life cycle. 129. Refer to LeBlanc’s Pecan Company. When Orville LeBlanc created the list of communication tasks the advertising must accomplish, he was setting his: A. marketing mix. B. media schedule. C. advertising objectives. D. advertising life span. E. media profile. Answer: C Rationale: An advertising objective is a specific communication task that should be accomplished for a specified target market. 130. Refer to LeBlanc’s Pecan Company. One of their advertisements featured Mrs. LeBlanc showing how several of the products sold in the shop can be used when entertaining guests. This is an example of which executional style for advertising? A. Mood or image B. Store demonstration C. Scientific D. Fantasy E. Convenience Answer: B Rationale: The store demonstration executional style for advertising shows consumers the expected benefit. 131. Refer to LeBlanc’s Pecan Company. When Orville LeBlanc decided which media he would use to optimally and cost-effectively reach the store’s target audience, he was engaged in developing: A. a marketing mix. B. a media plan. C. a promotional plan. D. an advertising campaign. E. reach objectives. Answer: B Rationale: Media planning is the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience. 132. Refer to LeBlanc’s Pecan Company. A feature article in a Houston newspaper describing the LeBlanc’s Pecan Company store and what it sells would be an example of: A. newspaper advertising B. event sponsorship C. product placement D. competitive advertising E. publicity Answer: E Rationale: Publicity is the effort to attract media attention. Digital Cookware Digital Cookware has developed a new kind of skillet that should make cooking easier for many non-chefs. The skillet has a display on its handle that beeps to alert the cook when the pan’s target temperature is reached. The skillet, with the aid of an accompanying cookbook, will take much of the guesswork out of cooking. Digital Cookware is a small company, and it has invested considerable money in developing this new technology, which it eventually hopes to use in an entire line of pots and pans. It has run some small ads for the new skillet in cooking magazines and has been featured on some morning talk shows. It needs a quick infusion of cash to maintain its current operational level and to develop the rest of the cookware line. Digital Cookware is considering some kind of sales promotion. 133. Refer to Digital Cookware. Why might rebates be a really good sales promotion for Digital Cookware to use? A. They are useful in building long-term relationships with customers. B. They can create a great amount of publicity. C. They create mutually beneficial relationships between the manufacturer and its customers. D. They are good at enticing purchases, but most rebates are not redeemed. E. They can be piggybacked with similar products. Answer: D Rationale: Building long-term relationships describes a loyalty marketing program. Sweepstakes and contests generate publicity. Piggybacked is a term used with sampling. 134. Refer to Digital Cookware. If consumers receive a free spatula with the purchase of Digital Cookware, this is an example of which type of consumer sales promotion? A. A sample B. A premium C. A rebate D. A bonus pack E. An add-on Answer: B Rationale: A premium is an extra item offered to the consumer. 135. Refer to Digital Cookware. The company’s first task is to define its exact sales promotion objective. If the goal of the company is to persuade customers to buy its brand of skillet as opposed to one of the skillets made by its competition, it should: A. use on-pack coupons. B. run a cooking contest that has contestants enter recipes that use the new skillet. C. use price-off packages. D. use bonus packs. E. institute a loyalty marketing program. Answer: B Rationale: The objectives of a promotion depend on the general behavior of targeted customers. See Exhibit 16.4. 136. Refer to Digital Cookware. Digital Cookware is offering retailers a price reduction for allocating space for special displays of its products. This type of trade sales promotion is called: A. push money. B. a trade allowance. C. an event sponsorship. D. a store demonstration. E. a trade show. Answer: B Rationale: Trade allowance is a price reduction offered by manufacturers to intermediaries such as wholesalers and retailers. 137. Refer to Digital Cookware. If Digital Cookware offered the sales associates at a chain of cooking stores a bonus for each digital skillet they sold, it would be an example of: A. push money. B. a trade allowance. C. a trade rebate. D. pull money. E. a functional discount. Answer: A Rationale: Push money is money offered to channel intermediaries to encourage them to “push” products. ESSAY 1. Define advertising and explain why new brands with small market share tend to spend proportionately more for advertising and sales promotion than those with a large market share. Answer: Advertising is impersonal, one-way mass communication about a product or organization that is paid for by a marketer. There are two reasons why new brands with smaller market share tend to spend proportionately more on advertising that those with a larger market share: (1) beyond a certain level of spending for advertising and sales promotion, diminishing returns set in––that is, sales or market share begins to decrease no matter how much is spent on advertising and sales promotion, a phenomenon called the advertising response function; and (2) a certain minimum level of exposure is needed to measurably affect purchase habits. 2. Name and briefly define the two major types of advertising. Answer: INSTITUTIONAL ADVERTISING is used when the goal of the campaign is to build up the image of the company. Institutional advertising promotes the corporation as a whole and is designed to establish, change, or maintain the corporation’s identity. Advocacy advertising is a special form of institutional advertising that allows corporations to express viewpoints on controversial issues. PRODUCT ADVERTISING touts the benefits of a specific product or service. Product advertising can take three forms: pioneer advertising, competitive advertising, and comparative advertising. 3. Name and briefly define three forms of product advertising. Answer: Product advertising touts the benefits of a specific product or service. Product advertising can take three forms: pioneer advertising, competitive advertising, or comparative advertising. PIONEERING ADVERTISING is intended to stimulate primary demand for a new product or product category. It is used during the introductory stage of the product life cycle to offer information about the benefits of the product class. COMPETITIVE ADVERTISING is used to influence demand for a specific brand. This advertising emphasizes the building of brand name recall and favorable brand attitudes. Firms use this type of advertising when a product enters the growth phase of the product life cycle. COMPARATIVE ADVERTISING directly or indirectly compares two or more competing brands on one or more specific attributes. 4. What is the most significant recent trend that has affected television advertising? Describe the trend and how it impacts television networks, and explain how television networks have been dealing with it. Answer: The most significant trend to affect television advertising in recent years is probably the rise in popularity of digital video recorders such as TiVo. Viewers weary of television advertisements have been using ad-skipping DVR technology to avoid interruptions during their favorite shows. If consumers are not watching advertisements, then marketers will spend a greater proportion of their advertising budgets on alternative media, and a major revenue stream for networks will disappear. Some networks have created small icons in the bottom of the screen to promote their own products. Some have also run shorter blocks of advertising to minimize the number of viewers who skip over the ads. TiVo has also offered interactive banner ads to advertisers, making those sponsors’ names visible as their ads are being fast-forwarded. 5. There are several criteria used in selecting media in an advertising campaign. Name and briefly discuss the impact of five of these criteria used to select media. Answer: COST PER CONTACT is the cost of reaching one member of the target market. Lower cost per contact may be appealing to advertisers, but total cost should be considered as well. COST PER CLICK is the cost associated with a consumer clicking on a display or banner ad. REACH is the number of target consumers who are exposed to a commercial at least once during a specific period, usually four weeks. FREQUENCY is the number of times an individual is exposed to a given message during a specific period. TARGET AUDIENCE CONSIDERATIONS. A medium’s ability to reach a precisely defined market is its audience selectivity. Some media vehicles appeal to a wide cross section of the population. Others appeal to very specific groups. FLEXIBILITY is how adaptable the medium is to changes. Magazines, for example, have poor flexibility as they require ad copy months before publication. Radio allows an ad to be changed in one day. NOISE LEVEL is the level of distraction to the target audience in a medium. Billboards may have high noise level, due to driver distraction, whereas direct mail has low noise level. LIFE SPAN is how long the advertising message lasts. A radio or television commercial lasts only for the duration the commercial is aired, whereas a magazine ad may viewed several times by several people. 6. Advertisers must evaluate several qualitative factors involved in media selection. Name at least three of them. Answer: These qualitative factors include such things as (1) attention to the commercial and the program, (2) involvement, (3) lack of distractions, (4) how well the view likes the program, and (5) other audience behaviors that affect the likelihood a commercial message is being seen and absorbed. 7. List and briefly describe the four basic types of media scheduling. Give an example of a product that would be likely to use each of these types of scheduling. Answer: 1. CONTINUOUS MEDIA SCHEDULE. This schedule allows the advertising to run throughout the advertising period. Examples: milk, computers, mobile telephones, soda, bar soap, and detergent. 2. FLIGHTED MEDIA SCHEDULE. This schedule means the advertiser schedules ads heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times. Examples: new movies, department store sales. 3. PULSING MEDIA SCHEDULE. This schedule combines continuous scheduling with flighting. Continuous advertising is simply heavier during the best sale periods. Examples: sales periods such as Thanksgiving, Christmas, and back-to-school. 4. SEASONAL MEDIA SCHEDULE. This schedule is for products that are used more during certain times of the year. Examples: cough syrup, sunscreen, wood-burning stoves, wood for wood-burning stoves, and holiday decorations. 8. What is public relations? What is publicity? Answer: Public relations is the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance. Public relations is a vital link in a progressive company’s marketing communications mix. The outcome of public relations is publicity––the effort to capture media attention. Public relations and publicity may serve to boost new product introduction and to position or reposition mature products. The two terms are often confused, but publicity is simply one of several public relations tools. 9. List and briefly describe five of the many functions commonly performed by public relations departments. Answer: PRESS RELATIONS. Placing newsworthy information in the news media to attract attention to a product, a service, or a person associated with the firm or institution. PRODUCT PUBLICITY. Publicizing specific products or services. CORPORATE COMMUNICATION. Creating internal and external messages to promote a positive image of the firm or institution. PUBLIC AFFAIRS. Building and maintaining national or local community relations. LOBBYING. Influencing legislators and government officials to promote or defeat legislation and regulation. EMPLOYEE AND INVESTOR RELATIONS. Maintaining positive relationships with employees, shareholders, and others in the financial community. CRISIS MANAGEMENT. Responding to unfavorable publicity or a negative event. 10. Describe some specific ways that companies are using the Internet in their public relations strategies. Answer: Company Web sites are used to introduce new products, provide information to the media including social media news releases, promote existing products, obtain consumer feedback, communicate legislative and regulatory information, showcase upcoming events, provide links to related sites (including corporate and non-corporate blogs, Facebook, and Twitter), release financial information, interact with customers and potential customers, and perform many more marketing activities. In addition, social media is playing a larger role in how companies interact with customers online, particularly through other sites like Facebook, Yelp or Twitter. 11. What is sales promotion? What are the objectives of sales promotion? Answer: Sales promotion is marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value. Sales promotion offers consumers incentives to buy via coupons, premiums, contests, and free samples. Immediate purchase is usually the goal of sales promotion. The objectives depend on the general behavior of the target consumers. Marketers targeting loyal users of their product want to reinforce existing behavior, whereas other promotions may aim to convince consumers to switch brands or try a new product. 12. Oakley Grove and Abraham Enterprises both market oranges and grapefruits. Oakley Grove has been in business for almost 40 years, while Abraham Enterprises has only been selling citrus fruit for about 18 months. Abraham Enterprises would like to take business away from Oakley Grove, and Oakley Grove wants to retain all of its customers. Explain which sales promotions each should emphasize in its marketing mix. Answer: Oakley Grove wants to maintain its current customers. To achieve this objective, it can create a loyalty marketing program. Customers could earn points for each pound purchased, and after acquiring a certain number of points, customers could redeem them for a free gift box. Also, bonus packs would be a good sales promotion to use and would give customers an incentive to stock up. Another possibility is to have customers collect proofs of purchases off of the Oakley Grove packages and redeem those for some premium such as a juicer. Abraham Enterprises would need to use different sales promotions because its goal is to persuade customers to switch from Oakley Grove to its brand of fruit. One method it could try is sampling, especially if it believes that its product is superior to that of Oakley Grove. It could also use a sweepstakes or a contest (such as who makes the best dessert using oranges) to gain publicity for its product and to draw attention to the products it produces. Abraham Enterprises could also use a premium offer, but it would need to be something unique (like the bounty off of one orange tree for a year) so that the premium would make a strong impression on the customers the company wants to gain from its competitors. 13. Consumer sales promotion seeks to reach new users, keep current users, and entice users to stock up. It can also be used to reinforce advertising for the good or service. Name and define five consumer sales promotional tools. Answer: COUPONS are certificates given to consumers entitling them to an immediate price reduction when they purchase the item. REBATES are similar to coupons in that a rebate offers the purchaser a price reduction; however, because the purchaser must mail in a rebate form and usually some proof of purchase, the reward is not as immediate. PREMIUMS are extra items offered to the consumer, usually in exchange for some proof that the promoted product has been purchased. LOYALTY MARKETING PROGRAMS or FREQUENT BUYER PROGRAMS reward loyal consumers for making multiple purchases of a particular good or service. CONTESTS are promotions in which participants compete for prizes based on some skill or ability. SWEEPSTAKES allow anyone to participate and are characterized by chance drawings for prizes. SAMPLING allows consumers to try products risk-free. Trial sizes reduce the risk of trying new products. They also eliminate the problem of being stuck with a large quantity of a disliked product. POINT-OF-PURCHASE PROMOTIONS are special displays set up at retail locations to build traffic, advertise the product, or induce impulse buying. ONLINE SALES PROMOTIONS are a way to boost Web site traffic by giving away free services and/or equipment. Also, these promotions include sites that distribute coupons online as a way to counter the high cost and low redemption rate of coupons in print media. Some Internet sites are also using loyalty programs—users are rewarded with points, which can be redeemed later. Sampling is also possible at some Web sites. 14. You are the sales promotion manager for Vita-Balls, a new children’s vitamin that is designed to be chewed like gum. Your company uses a pull strategy, and you are responsible for recommending sales promotion tools to accomplish this strategy. Describe three specific sales promotion activities you would recommend for Vita-Balls. Answer: Because Vita-Balls uses a pull strategy, consumer sales promotion tools should be used. COUPONS for discounts on Vita-Balls could be mailed directly to parents or could be placed in parenting magazines. PREMIUMS could be offered to purchasers of Vita-Balls, with proof of purchase required. The premium should be related to the product, such as books on common parenting problems, a subscription to a nutrition magazine, or other children’s healthcare products. LOYALTY MARKETING PROGRAMS or FREQUENT BUYER PROGRAMS could also be offered such as offering a free container of Vita-Balls after 12 containers are purchased. CONTESTS could be offered to parents. Entrants could write an ESSAY about Vita-Balls or send in a photograph of their child, with the winning picture appearing on the new package of Vita-Balls. A SWEEPSTAKES could allow anyone to enter a random drawing for a free year’s supply of Vita-Balls. SAMPLING would allow parents to try the product without risk. Free small sizes could be mailed to parents. POINT-OF-PURCHASE PROMOTIONS could be set up at drugstores or grocery stores to attract new customers and encourage current customers to try Vita-Balls. ONLINE SALES PROMOTIONS. The manufacturer of Vita-Balls could set up a Web site where it provided online coupons for the vitamin, which could be redeemed at retail stores, as well as hints on how to get children to eat more nutritiously. It could award points for visiting this site and have the points redeemable for Vita-Balls. 15. Compare and contrast contests and sweepstakes. Answer: Contests and sweepstakes are both types of sales promotions generally designed to create interest in a good or service, often to encourage brand switching. Contests are promotions in which participants use some skill or ability to compete for prizes. A consumer contest usually requires entrants to answer questions, complete sentences, or write a paragraph about the product and submit proof of purchase. Winning a sweepstakes, on the other hand, depends on chance or luck and participation is free. Sweepstakes usually draw about ten times more entries than contests do. Test Bank for MKTG Charles W. Lamb, Jr. Hair, Joseph F., Carl McDaniel 9781285091860

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