Chapter 7
According to the criteria outlined in DAGMAR, which of the following is the best statement of a quantitative communications objective?
"Increase the number of customers mentioning the brand name when asked for brand preference from 40 percent to 50 percent in one year."
The DAGMAR approach to setting objectives:
. has focused advertisers' attention on the value of using communications objectives rather than sales objectives.
Which of the following is an example of a common criticism of DAGMAR?
It ignores communications objectives.
In January 2003, Philip-Morris Companies, Inc., and Kraft Foods became the Altria Group. The change in name reflected the fact the company has changed itself structurally, behaviorally, and culturally. The new name was designed to focus attention on the company's superior performance, financial strength, and its commitment to integrity and corporate responsibility. Which of the following statements about the communications objectives the company would have most likely used as part of this repositioning strategy is true?
A communications objective concerning the repositioning of the Altria Group would take longer to accomplish than an objective designed to create brand awareness.
For which of the following would an advertiser be most likely to use a sales-oriented objective?
A direct response ad for a record album
According to the DAGMAR model, which of the following is a characteristic of a good objective?
A good objective is based on sales results.
Which of the following statements describes a weakness inherent in the use of the marginal analysis model for establishing an advertising budget?
It is very illogical and virtually no theoretical base is used to determine the budgets.
Which of the following statements best describes the relationship between marketing and communications objectives?
Communications objectives are derived from marketing objectives.
Which of the following statements is true about communications objectives?
Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals.
To set an advertising budget, the marketer of filing cabinets examines advertising to sales ratios published in trade magazines, and then allocates a percentage of sales dollars to the advertising effort. Which two budgeting methods are being employed?
Competitive parity and percent of sales method.
Which of the following methods of determining a budget requires a marketing department manager to use input from a clipping service?
Competitive parity method
_____ is the difference between total revenue generated by a brand and its total variable costs.
Contribution margin
_____ is an approach to setting advertising goals and objectives which states that communication effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
DAGMAR
You are working in the advertising department of a large consumer products company. You have suggested that the company use the DAGMAR approach for setting advertising goals. Which of the following is an example of an argument that you are likely to hear against the use of the DAGMAR approach to setting advertising goals?
DAGMAR is too quantitative for most managers to understand.
In 2007, Cingular acquired AT&T but renamed itself as AT&T itself. The choice of the name reflected consumers' awareness and recognition of an established brand. To determine how successful it was in making consumers aware of its name change and its new positioning strategy, the firm could have used:
DAGMAR.
Which of the following statements is true about the communications objectives?
It can be difficult to determine the relationship between communications objectives and sales performance.
An airline company set the following objective for its new advertising campaign: "To increase the percentage of consumers who know our fares are lower than the competitors' to 75 percent over the next six months." Using the criteria associated DAGMAR approach to setting objective, what is wrong with this objective?
It does not contain a benchmark measure and statement of the degree of change sought.
Which of the following is an advantage of the competitive parity method?
It leads to stability in the marketplace by minimizing marketing warfare.
Which of the following statements provides a good rule of thumb for setting the advertising budget for a new product?
Its advertising budget should be twice the desired market share.
According to Robert Steiner, which of the following terms is synonymous with contribution margin?
Marginal analysis
_____ objectives are types of objectives that are usually stated in terms of specific, measurable outcomes such as sales volume, market share, or return on investment.
Marketing
_____ is a method for allocating budgets designed to determine the investment value of the advertising appropriation.
Payout planning
In the _____ method of budget determination advertising is considered an investment, similar to plant and equipment.
ROI budgeting
For which of the following advertising communication tasks should the specified time period be the longest?
Repositioning a brand
Which of following is a likely problem for a manager who uses sales as a measure of advertising effectiveness?
Sales results offer little guidance or direction to those responsible for planning and developing the advertising program.
Which of the following is an advantage of the arbitrary allocation method?
The arbitrary allocation approach has no obvious advantages.
Which of the following is a factor that influences the setting of the advertising budget?
The basis for product differentiation.
Which of the following statements is true regarding the relationship between advertising and promotion, and sales performance?
The repositioning of brands is often done with a goal of improving sales or market share.
_____ is an approach to integrated marketing communications planning that involves determining what tasks need to be done and which marketing communications planning functions should be used to accomplish them.
Zero-based communications planning
According to DAGMAR, advertising objectives should be written in measurable terms that specify:
a communications task, a target market, a benchmark starting point, a time period, and degree of change sought.
DAGMAR is:
a philosophy of advertising goal setting.
The _____ method of budgeting is being employed when expenditure is allocated by an analysis of expenditure for all aspects of producing and marketing the product. The ad budget is determined by making sure a certain amount is not exceeded.
affordable
A marketing firm decides to purchase media time in an attempt to sell its new product. After purchasing approximately $1 million dollars of time, it has noticed no impact on the sales of the product. However, at $3 million, a substantial increase is shown. This might best be explained by:
an S-shaped response function.
Which top-down budgeting method is being employed when expenditure is allocated by assigning a budget based on gut feelings?
arbitrary allocation
You know the _____ method of budgeting is being employed after hearing an experienced marketing department manager respond to a new employee's question, "How was the ad budget established last year?" by saying, "The same way it's always been done. I just have an instinct for how much should be budgeted where."
arbitrary allocation
Determining a target market's present level of awareness, knowledge and liking towards a product often requires _____ measures.
benchmark
According to Duncan's zero-based marketing communications planning approach,
big ideas for a promotional campaign can be based on public relations, advertising, sales promotion or media advertising
The task and objective method of budgeting as well as the payout plan are both examples of the _____ approach.
build-up
As a result of economies of scale, large advertisers:
can spend more money on advertising and realize a better return.
According to DAGMAR, the basic function of advertising is to:
communicate.
In 2007, Cingular acquired AT&T but renamed itself using AT&T. The choice of the name reflected consumers' awareness and recognition of an established brand. Advertising to make consumers aware of new combined firm would more than likely have _____ objectives.
communications
Many marketing managers approach promotion from a(n) _____ perspective and believe the objective of advertising and other promotional mix elements is to relay
communications
Various response hierarchy variables such as awareness, knowledge, interest, attitudes, and intention are the basis for:
communications objectives.
Under the DAGMAR model, a(n) _____ can be performed by, and attributed to advertising rather than a combination of marketing factors.
communications task
A stereo speaker manufacturer developed advertising objectives, which stated that the goal of the company's new ad campaign is "To communicate our ability to create an environment of total audio ambience in the home." This statement could serve as an example of a:
communications task.
A disadvantage associated with the _____ method is its assumption that because firms have similar promotional expenditures their programs will be equally effective.
competitive parity
The _____ budgetary allocation method is designed to promote stability and minimize marketing warfare as well as take advantage of the collective wisdom of the
competitive parity
The _____ method of budgeting is being employed when expenditures are allocated based on information about industry averages for advertising. The budget is set to maintain a level consistent with industry spending.
competitive parity
As a tool for budget allocation, multiple regression analysis is most often employed in budget models using:
computer simulation
The _____ function model is based on the microeconomics law of diminishing returns.
concave-downward
The two models that are commonly used to explain the relationship between advertising and sales are the:
concave-downward function and the S-shaped response function.
Before setting objectives for advertising and promotion, an organization should:
conduct a situation analysis to identify marketing and promotional issues facing the firm.
The more specific the firm's advertising objectives, the:
easier it becomes to measure advertising effectiveness.
As a result of ____, large advertisers can maintain advertising expenditure shares that are smaller than their market shares because they get lower advertising rates and accrue the advantages of advertising several products jointly.
economies of scale
Before beginning its new advertising campaign, Landmark Bank conducted a study to determine consumers' level of awareness and knowledge of the bank and its services as well as consumers' perceptions of the bank's image. This was done to:
establish benchmark measures.
Inside-out planning:
focuses on what the marketer wants to say, when the marketer wants to say it, things the marketer believes are important to his or her brand, and the media form the marketer wants to use.
Many marketers are uncertain as to what the integrated marketing communications should contribute to the marketing program. The only goal of their company's advertising and promotional program is to:
generate sales.
As a result of economies of scale, smaller advertisers:
get higher advertising rates than large advertisers.
In the case of marginal analysis approach, profits are shown to be a result of:
gross margin minus advertising expenditures.
Arden's task is to determine what was accomplished by his company's advertising and promotional program for a vinyl siding cleanser. You can tell him that:
his task could be made easier by setting specific communication objectives.
Creative executives from the advertising industry might oppose the DAGMAR approach to setting objectives because it:
inhibits their creativity by putting too much emphasis on numbers and the quantitative assessment of an advertising campaign.
The S-shaped response function implies that:
initial advertising expenditures will have little impact on sales.
According to the S-shaped response curve,
initial outlays of the advertising budget have little impact on sales.
To more fully appreciate the value of advertising and promotion, managers should treat the communications budget as a(n):
investment.
The carryover effect:
is particularly apparent with mature, low-priced, and frequently purchased products.
The first task in the objective and task method of budgeting is to:
isolate advertising objectives.
Ace Computer has an objective of increasing its share of the home personal computer market by 5 percent during the upcoming year. This is an example of a(n) _____ objective.
marketing
Pace Foods has a goal of expanding its business beyond its traditional Texas market base. This goal is an example of a _____ objective while the goal of establishing a position of authenticity and making Mexican food seem fun is an example of a(n) _____ objective.
marketing; communication
When using the competitive parity budgeting method, the firm:
matches its share of total industry advertising expenditures to its market share.
Generally, companies that develop Integrated Marketing Communications (IMC) programs which do not contain specific objectives:
may find it difficult to facilitate coordination of the efforts of various groups working on a promotional campaign since the various groups may not understand what goal they are working towards.
Defining the communications objectives to be accomplished and estimating the costs associated with the performance of the necessary strategies and activities are steps in the _____ method of budgeting.
objective and task
Which of the following is an example of a budgeting allocation method that uses a build-up approach?
objective and task
During the first months of a new product introduction, a useful budgeting technique to determine a ballpark figure for setting feasible objectives is the _____ method.
payout planning
The _____ method of budgeting uses advertising/sales ratio data.
percent of sales
The major problem associated with the _____ budgeting method is that it reverses the cause and effect relationship between advertising and sales.
percent of sales
The _____ method of budgeting is being employed when expenditures are allocated by assigning a part of the cost of the product to be allocated to advertising. The total budget is based on units sold.
percentage of sales
Which of the following budgeting procedures would be used if a firm wanted a method that is simple to understand and financially safe?
percentage of sales
The most commonly utilized method of budget determination by large firms is:
percentage of sales method.
One important purpose of setting specific advertising goals and objectives is to:
provide a standard against which performance can be measured.
Which of the following is at the top of the communication effects pyramid?
purchase/repurchase
To be effective, marketing objectives need to be:
realistic and attainable.
Sales-oriented objectives are appropriate for:
retail advertising promoting a sale or special event.
Direct-response advertisers generally set objectives and measure success in terms of:
sales response generated by an ad.
"Encouraging current drinkers of Coca-Cola to drink more of the beverage," would be an example of a(n) _____ objective.
sales-oriented
Financially oriented managers who view marketing communications as an expense rather than an investment are likely to prefer _____ objectives for advertising and other promotional areas.
sales-oriented
Heinz developed a sales promotion program called "All About Family." It offered a coupon of a free Halloween candy when one purchased any of five different participating Heinz brands. Cents-off coupons for the participating brands were placed in newspaper inserts. The campaign also featured a contest called the "Ultimate Family Night" sweepstakes. Heinz management most likely used _____ objectives to measure the effectiveness of this sales promotion.
short-term sales
Advocates of communication-based objectives for advertising propose using _____ as a basis for setting these objectives.
stages of a hierarchical response model.
Outside-in planning:
starts with the customer and builds backward to the brand when developing an IMC program.
In the _____ method to budgeting, sales are projected for the coming year based on the marketing manager's estimates.
straight-projected sales
The concept of advertising expenditures producing long term rather than immediate results is known as:
the carry-over effect.
According to the concave-downward model,
the effects of advertising quickly begin to diminish.
Managers who use the communications effects pyramid to set objectives believe that:
the foundation of the communications program is set by accomplishing lower-level objectives such as awareness, knowledge, and comprehension.
The concave-downward function model is based on:
the microeconomics law of diminishing returns.
The objective and task method is most difficult to use when:
the product to be promoted is new to the market.
Many marketing managers prefer sales-oriented objectives for advertising because they believe:
the reason a company spends money on advertising and promotion is to sell its products or service.
DAGMAR MOD II was developed to alleviate problems with:
the response hierarchy used in the original DAGMAR model.
When higher-level executives determine the budget amounts to be allocated for each department's advertising expenditures, a _____ approach is being used.
top-down
Top-down budgeting methods are commonly used because of:
upper management's desire for control.
Marketing goals defined in terms of sales, profits or market share increases are:
usually not appropriate for promotional objectives.
The S-shaped response curve suggests that:
very low advertising budgets will not work.
Assume the Greyhound Bus Company runs a six-month advertising campaign promoting its convenient bus routes and excellent on-time service without conducting any sort of marketing research. At the end of the six-month period, Greyhound conducts a study and finds 80 percent of its frequent travelers agree the bus company has convenient bus routes and excellent on-time service. Greyhound can conclude that:
without benchmark measures, it will never know if the campaign was a success or a failure.