353 chapter 3

Organizations that use a standardized approach to marketing and advertising in all countries in which they do business are called: foreign marketers multinational corporations global corporations international exporters transnational corporations

global corporations

If the Hunt-Thomson Agency were to buy an ad in Marie Claire magazine for a company that sells designer turquoise jewelry, the ad would cost $5,000. How much money would the agency send the publication to pay for the ad? (1 point) $4,250 $4,850 $5,000 $5,150 $5,750

$4,250

If the Hunt-Thomson Agency were to buy an ad in Marie Claire magazine for a company that sells designer turquoise jewelry, the ad would cost $5,000. How much money would the advertising agency bill the jewelry manufacturer? (1 point) $4,250 $4,850 $5,000 $5,150 $5,750

$5,000

Hudson Pool and Spa, owned by Jill and Joel Hudson, sells and installs above-ground swimming pools and Beachcomber brand hot tubs. The manufacturer of the Beachcomber hot tub has sent the Hudsons a letter in which it offers to pay 50 percent of the advertising cost if the Hudsons will run a newspaper ad featuring the Beachcomber hot tubs. What type of advertising is the Beachcomber manufacturer suggesting they use? A. Cooperative advertising B. Horizontal advertising C. Vertical advertising D. A franchise promotion E. A strategic promotion

A. Cooperative advertising

_____ advertising attempts to create a favorable long-term perception of the business as a whole, not just of a particular good or service. A. Institutional B. Interactive C. Organizational D. Product E. Relationship

A. Institutional

Advertisers use _____ advertising in the newspaper to locate and recruit new employees, to offer services or to sell or lease new and used merchandise. A. classified B. product C. generic D. relationship E. media

A. classified

When the Ace Hardware Store located in Franklin mails an advertising flyer to all the residents in the community, it is an example of _____ advertising. A. local B. institutional C. interactive D. interregional E. dealer

A. local

Ericsson is an international telecommunications supplier based in Sweden. It has six product lines: public switches, private branch exchanges, radio communications, defense system, components and cable and network television systems. If a media representative wanted to sell ad space to the company, he or she must meet with representatives from each of the product lines. Its ad department is organized by: A. product or brand. B. sub-function of advertising. C. end user. D. media. E. geography.

A. product or brand.

Because few agencies have the capability to produce television ads in-house, most rely on independent: A. production houses. B. ad intermediaries. C. art agencies. D. Internet boutiques. E. art studios.

A. production houses.

Some advertisers ask for or imply that they want to see what the agency will do before they sign on. The agencies thus must create a: A. speculative presentation. B. provisional showing. C. portfolio of previous ad campaigns. D. storyboard. E. three-dimensional advertising plan.

A. speculative presentation.

A full-service advertising agency: A. supplies both advertising and non-advertising services in all areas of communications and promotion. B. should not be expected to produce annual reports, trade show exhibits or sales-training material. C. is normally classified as one of three basic types—generic, specialist, or entrepreneurial. D. works on a contractual basis and does not accept commissions. E. supplies advertising and non-advertising services in certain, not all, areas of communications and promotion.

A. supplies both advertising and non-advertising services in all areas of communications and promotion.

In advertising, a retainer is: A. the same as a straight fee. B. a commission that is paid on a monthly rate. C. a form of markup paid by nonprofit organizations. D. the cost for reserving TV and radio time. E. the commission paid to media-buying services.

A. the same as a straight fee.

_____ supply agencies with artwork and illustrations for advertisements. A. Ad intermediaries B. Art studios C. Art agencies D. Production houses E. Art directors

B. Art studios

Which of the following statements is true about account planning? A. It is a method used to benchmark competitors. B. It is a hybrid discipline that bridges the gap between the traditional agency research, account management and creative departments. C. It does not include any consumer research. D. It is the reorganization of an advertiser for the purpose of improving its image. E. It is a service provided by creative boutiques, which allow the advertiser to choose generic ads that can be customized.

B. It is a hybrid discipline that bridges the gap between the traditional agency research, account management and creative departments.

Which of the following is a current trend in advertising? A. Increased use of commissions by large advertisers. B. The development of small specialty advertising agencies. C. The combining of the small agencies into a few large agencies. D. A decline in viable media options. E. Decreased of audience empowerment.

B. The development of small specialty advertising agencies.

At one time Parker Pens were advertised in 30 different countries with 30 different ad themes in 30 different languages. At that time, Parker Pens would have been a user of: A. multitask advertising. B. foreign media. C. global advertising. D. standardized advertising. E. international media.

B. foreign media.

In medium- and large-sized advertising agencies, the organization is generally formal and is structured according to the: A. industry served. B. group or departmental system. C. media availability. D. size of client companies served. E. geographical location.

B. group or departmental system.

A manufacturer of _____ would be most likely to use a business-to-business agency. A. greeting cards B. hydrocracker machinery used in an oil refinery C. personal laptops D. designer apparel E. monogrammed towels

B. hydrocracker machinery used in an oil refinery

Retailers like The Home Depot use television, catalogs, the Internet and magazines to transmit its advertising message to consumers. In terms of the four distinct groups around which advertising is organized, The Home Depot uses: A. message channels. B. media. C. message handlers. D. transmission channels. E. communication channels.

B. media.

The primary reason that some advertisers set up a wholly owned in-house ad agency is to: A. increase their overhead. B. save money and tighten control over their advertising. C. stimulate external creative efforts on the part of the marketing staff. D. meet the challenge of ad agencies and mass media with respect to creative incentives. E. increase the size of the markup they pay.

B. save money and tighten control over their advertising.

Helen Jackson operates a retail store that specializes in children's clothing in a local strip mall. She faces many promotional and advertising decisions on a daily basis. For example, what kind of a sale should she conduct after the Christmas holidays? For how many days should the sale be held? What kind of items should be placed on sale? Jackson's advertising focus is on _____ because of its short-term nature. A. strategy B. tactics C. narrowcasting D. broadcasting E. relationships

B. tactics

Account executives are: A. brokers of advertising services to small companies that have limited advertising budgets. B. the liaisons between the agency and the client. C. typically employed by non-profit organizations as fund raisers. D. agents that handle multiple small non-competing advertising accounts. E. the sole media buyers at most large agencies.

B. the liaisons between the agency and the client.

If the Tomlinson Agency were to buy an ad in Western Horseman magazine for the manufacturer of Reins man saddles, the ad would cost $3,000. How much money would the advertising agency bill the saddle manufacturer? A. $2,250 B. $2,850 C. $3,000 D. $3,150 E. $3,750

C. $3,000

Which of the following is an example of product advertising? A. An ad for Circuit City explaining how to help the environment by recycling printer cartridges. B. An ad for American Express explaining how important small businesses are to national economic health. C. An ad describing why you should buy Glen Muir organic coups. D. An ad announcing Westinghouse provides appliances for homes built by Habitat for Humanity. E. An ad for Avon cosmetics announcing that it will donate $100,000 to breast cancer research.

C. An ad describing why you should buy Glen Muir organic coups.

Which of the following is an example of institutional advertising? A. A magazine ad containing recipes using Swanson's chicken broth. B. An ad announcing a sale at Macy's department store. C. An ad sponsored by Avon promoting breast cancer prevention. D. A radio ad for Linda's Restaurant. E. A coupon to save $1 on the price of a box of Pampers disposable diapers.

C. An ad sponsored by Avon promoting breast cancer prevention.

Which of the following statements about local advertising is true? A. Retail advertising is always local. B. Local advertising refers to advertising done by stores like Pets Mart, J C Penney and Dollar General. C. Because most consumer sales are made or lost locally, local advertising is critically important. D. There are only two categories of local advertisers. E. Ninety percent of the money advertisers spend each year is spent on local advertising.

C. Because most consumer sales are made or lost locally, local advertising is critically important.

_____ must have the skill to condense all that can be said about a product into a few salient and pertinent points. A. Account directors B. Advertising supervisors C. Copywriters D. Communication specialists E. Advertising planners

C. Copywriters

_____ advertising promotes a specific good or service and stimulates short-term action while building awareness of the business. A. Interactive B. For-profit C. Product D. Institutional E. Agency

C. Product

Which of the following statements about the speculative presentation is true? A. Agencies often ask prospective customers if they would like to see a speculative presentation. B. The speculative presentation is the preferred method for acquiring new clients. C. The speculative presentation process allows the agency and the advertiser to get to know each other they agree to work together. D. Agencies never spend more than $100,000 on creating speculative presentations. E. Speculative presentations are required by law in three states of U.S.

C. The speculative presentation process allows the agency and the advertiser to get to know each other they agree to work together.

Cooperative advertising serves two key purposes. One of those purposes is to help a manufacturer's distributors, dealers or retailers make more sales. The second purpose is to: A. reduce the probability that distributors, dealers or retailers will do no advertising at all. B. decrease the probability that distributors, dealers or retailers will present poor advertising to a manufacturer's customers. C. build the manufacturer's brand image. D. save the manufacturer money by reducing its variable costs. E. reduce dependence on institutional advertising.

C. build the manufacturer's brand image.

Advertising is organized around four distinct groups. One of these groups is the advertisers. This group is often referred to as the: A. senders. B. encoders. C. clients. D. customers. E. suppliers.

C. clients.

An ad agency's traffic department: A. maintains the agency's position as a facilitating intermediary. B. develops of the client's channel of distribution. C. coordinates all phases of ad production. D. negotiates media deals. E. makes sure there is no unplanned replication of the advertising effort.

C. coordinates all phases of ad production.

Interactive agencies: A. use customer relationship marketing to work with customers. B. create ads for nontraditional media like car bodies, supermarket carts and the back of airplane tickets. C. design Web pages and ads for the Internet. D. acts as a broker of advertising services to small companies that have limited advertising budgets. E. include among their services a fulfillment center for refunds and rebate offers.

C. design Web pages and ads for the Internet.

According to the text, local advertisers and national advertisers differ in terms of: A. credibility, autonomy and sources. B. ad penetration, focus and resources. C. focus, time orientation and resources. D. focus, promotional themes and advertising vehicles. E. credibility, resources and focus.

C. focus, time orientation and resources.

Organizations that use a standardized approach to marketing and advertising in all countries in which they do business are called: A. foreign marketers. B. multinational corporations. C. global marketers. D. international exporters. E. transnational corporations.

C. global marketers.

Pathmark Stores operate 142 supermarkets in the New York-New Jersey and Philadelphia metropolitan areas. Pathmark Stores only advertises in those states where it has stores. The form of advertising that best describes Pathmark's approach to advertising is: A. institutional. B. adjacency. C. regional. D. national. E. local.

C. regional.

General consumer agencies: A. provide advertising for products that are used in the manufacture of consumer products. B. concentrate on institutional advertising accounts. C. represent the widest variety of accounts. D. are not paid on a commission basis. E. do not operate internationally.

C. represent the widest variety of accounts.

Research is closely allied to advertising and an important tool for marketing professionals. Most f irms do not maintain a fully staffed research department. Instead, they use independent: A. Web data agencies. B. research production houses. C. research suppliers. D. research intermediaries. E. data boutiques.

C. research suppliers.

An advertiser who uses international media: A. typically uses a highly decentralized advertising department. B. has a flat organizational structure. C. serves several countries, usually without any change in the advertising. D. develops a different ad for the local media of each country. E. typically produces its ads in the language of each country in which it advertises.

C. serves several countries, usually without any change in the advertising.

JWT Agency has designed a quarter-page magazine ad for Promise vegetable-oil spray. The job required the services of a photographer to produce photographs of various foods that will "taste better with Promise". The invoice for the artwork from the photographer was for $200. If JWT uses the traditional markup, how much did the advertising agency bill Promise vegetable-oil spray company? A. $170 B. $200 C. $230 D. $235 E. $250

D. $235

An ad for Calvin Klein's Eternity fragrance for men and women contains a black-and-white full-size photograph of an attractive, young couple in a romantic embrace. Who is in charge of the photograph portion of the ad, its placement on the page and the location and appearance of the product and product name in the ad? A. Ad illustrator B. Advertising planner C. Media specialist D. Art director E. Communication specialist

D. Art director

What is probably the greatest disadvantage associated with in-house ad agencies? A. Loss of revenues B. Adherence to the organizational mission C. Reluctant acknowledgement by the mass media D. Loss of objectivity E. Staff-line relationships

D. Loss of objectivity

As defined by the American Association of Advertising Agencies, the _____ is an independent organization of creative people and business people that specialize in developing and preparing advertising plans, advertising and other promotional tools. A. creative boutique B. promotional facilitator C. facilitating intermediary D. advertising agency E. advertising supplier

D. advertising agency

A(n) _____ is an organization of creative specialists who works for advertisers and occasionally subcontracts to advertising agencies. Its mission is to develop exciting creative concepts and to produce fresh, distinctive advertising messages. A. promotional facilitator B. interactive agency C. entrepreneurial agency D. creative boutique E. IMC agency

D. creative boutique

DDB Needham, one of the world's largest ad agencies, formed a company with director Spike Lee called Spike DDB. The purpose of the new company is to develop ways to tap into urban trends and to increase minorities' use of its client's brands. The company is relying on the creative abilities of director Spike Lee to produce fresh, distinctive advertising messages. Spike DDB would be categorized as a(n): A. promotional facilitator. B. interactive agency. C. entrepreneurial agency. D. creative boutique. E. IMC agency.

D. creative boutique.

A company that uses a(n) ____, sets up separate ad departments for different divisions, subsidiaries, regions, brands or other categories that suit the company's needs. A. centralized system B. pyramid system C. organizational development scheme D. decentralized system E. managerial hierarchy

D. decentralized system

The most commonly cited reason for changing agencies is: A. internal environmental changes. B. poor communication. C. loss of subjectivity. D. dissatisfaction with agency performance. E. a static competitive environment.

D. dissatisfaction with agency performance.

(p. 77) An agency that earns a _____ charges a basic monthly fee for all of its services to the client and retains any media commissions earned. A. retainer B. salary-plus-commission C. media markup D. fee-commission combination E. negotiated fee

D. fee-commission combination

The modern _____ advertising agency supplies both advertising and non-advertising services in all areas of communications and promotion for its clients. A. entrepreneurial B. institutional C. organizational D. full-service E. multi-tasking

D. full-service

One of the advantages that a company has when it uses a decentralized advertising department is: A. exceptionally good organizational communications flow. B. lack of measurable responses. C. rigid and compact structure. D. increased divisional flexibility. E. a narrow span of management.

D. increased divisional flexibility.

Recently, BP, the petroleum company, ran a series of commercials in which they asked consumers how they would improve and preserve the natural environment. After each individual's responses, an announcer explained how BP was doing more than its share to protect our environment. These commercials were examples of _____ advertising. A. organizational B. generic C. product D. institutional E. agency

D. institutional

Western International Media buys unsold television and radio media and resells the time and space to advertisers and agencies. Western International Media is an example of a(n): A. entrepreneurial agency. B. promotional facilitator. C. creative boutique. D. media-buying service. E. promotional broker.

D. media-buying service.

When compared to an in-house agency an independent advertising agency offers the advantage of a: A. better defined strategic plans B. stronger organizational mission statement. C. more complete control over all channels of distribution. D. more objective viewpoint to the advertiser's business. E. lower variable expenses.

D. more objective viewpoint to the advertiser's business.

Advertising is organized around four distinct groups. The _____ group includes the photographers, the illustrators, video production houses and digital service bureaus. A. encoders B. support staff C. account personnel D. suppliers E. creators

D. suppliers

In the advertising agency business, _____ are people and organizations that provide specialized services. A. ad distributors B. media agencies C. advertising brokers D. suppliers E. ad intermediaries

D. suppliers

Walgreen pharmacy ran an ad to announce it was selling all of its Easter candy and decorations at half their original prices. How should you classify this ad? A. As a regular price-line ad B. As an institutional ad C. As an ad of enticement D. As a clearance ad E. As a sale ad

E. As a sale ad

What is the most critical factor in the agency-client relationship? A. The competitive relationship between the in-house and the outside agencies. B. The level and type of communication between the client and the agency. C. The ethical conduct of the agency. D. The dynamic nature of the environment in which the client operates. E. The personal chemistry between the client's employees and the agency's staff.

E. The personal chemistry between the client's employees and the agency's staff.

Which of the following designs Web pages and ads which are both effective and efficient? A. Production house B. Art house C. Internet boutique D. Art agency E. Web design house

E. Web design house

Flexco manufactures rivets used on heavily loaded conveyor belts which carry ore in underground and surface mining operations. Flexco would most likely hire a(n) _____ agency to create the company's advertising. A. general consumer B. intermediary C. institutional D. non-commissioned E. business-to-business

E. business-to-business

Toys 'R' U.S. has divided its advertising department into two sections: Toys 'R' U.S. United States and Toys 'R' U.S. International. Toys 'R' U.S. International is further divided into individual overseas locations including Italy, Germany, France, Hong Kong, Singapore and Canada. Given these facts, it would appear that the Toys 'R' U.S. ad department is organized by: A. product or brand. B. sub-function of advertising. C. end user. D. media. E. geography.

E. geography.

The three primary types of ads placed in local media are product, classified, and: A. service. B. retail. C. governmental. D. corrective. E. institutional.

E. institutional.

When the advertising agency of Lopez and White purchased several hours of television time for its customers' commercials from KLOX-TV, the agency received 15 percent of the gross amount charged by the station. The 15 percent: A. is a form of payment called a spiff. B. should have been paid to the advertiser as a negotiated fee. C. is not illegal but is believed to be unethical by most individuals in the advertising industry. D. is called a slotting allowance. E. is called a media commission.

E. is called a media commission.

Many experts believe the biggest difference between local advertisers and national advertisers is their: A. focus on sales. B. use of cooperative advertising. C. ability to act proactively. D. emphasis on feedback. E. relationships with customers.

E. relationships with customers.

Which of the following businesses is LEAST likely to use local advertising? a candidate for city commissioner Scottish Rite Hospital for children Paperback Corner, a store where customers can swap books Microsoft PetsMart in Chicago

Microsoft

One of the disadvantages that a company has when it uses a decentralized advertising department is: a focus on what is good for the department rather than what is good for the entire organization the absence of flexibility an inability to respond quickly to changes in the department's external environment inability to accurately measure the impact of advertising on sales a narrow span of management

a focus on what is good for the department rather than what is good for the entire organization

Business-to-business advertising agencies frequently charge their clients service fees because: ad rates in trade magazines are lower, and the standard agency commission does not generate enough revenue to cover agency costs business-to-business advertising is regulated by the Federal Trade Commission there are very few such agencies, and those they will take business-to-business clients are expensive the commission rate on industrial media is only 5 percent the job of creating persuasive communication is more difficult when the audience is concentrated

ad rates in trade magazines are lower, and the standard agency commission does not generate enough revenue to cover agency costs

The term media commonly describes: specialty advertising items interactive TV newspapers and magazines direct mail all of the above

all of the above

What advantage is associated with the use of an independent advertising agency? better defined strategic plans a stronger organizational mission statement more complete control over all channels of distribution an outside, objective viewpoint to the advertiser's business reduced variable expenses

an outside, objective viewpoint to the advertiser's business

The _____ is in charge of the nonverbal communication portion of an ad. ad illustrator advertising planner media specialist art director communication specialist

art director

Which of the following is NOT a commonly used method for organizing a centralized advertising department? by method of fee payment by subfunction of advertising by end user by media by product or brand

by method of fee payment

The advertising business has evolved into four distinct groups. Which of the following is NOT one of these groups? media customers advertising agencies suppliers advertisers

customers

Digital@JWT is a(n) _____ that designs Web pages, and creates fun, involving, and informational online advertising. interactive agency entrepreneurial agency creative boutique promotional facilitator Internet-media-services agency

interactive agency

Retailers like Victoria's Secret use television, catalogs, the Internet, and magazines to transmit its advertising message to consumers. In terms of the four distinct groups around which advertising is organized, Victoria's Secret uses: message channels media message handlers transmission channels communication channels

media

What is the most important job performed by an ad agency's traffic department? maintenance of the agency's position as a facilitating intermediary development of the client's channel of distribution analysis and selection of the best media vehicles on the basis of cost, availability, and logistics negotiating media deals making sure there is no unplanned replication of the advertising effort

negotiating media deals

Which of the following is NOT a type of local advertiser? dealers or local franchisees of national companies that specialize in one main product line or service like McDonald's stores that sell a variety or branded merchandise like department stores regional/national companies that specialize in segmentation marketing specialty businesses and services such as banks governmental, quasi-governmental, and nonprofit organizations such as a utility company

regional/national companies that specialize in segmentation marketing

A manufacturer of _____ would be most likely to use a business-to-business agency. greeting cards robotic equipment used on manufacturing assembly lines sailboats art supplies monogrammed towels

robotic equipment used on manufacturing assembly lines

Marie Tonsmiere operates a photography studio in Dunsbar County. She is faced with many promotion and advertising decisions on a daily basis. For example, should she offer a family photo discount during November? Tonsmiere's advertising focus is on _____ because of its short-term nature. (1 point) strategy tactics narrowcasting broadcasting relationships

tactics

An ad agency's _____ coordinates all phases of production and makes sure everything is completed before the client and/or media deadlines. (1 point) media department coordination specialist traffic department communications manager art director

traffic department

According to the Checklist for Creating Local Advertising, it would be unwise to: use a simple layout use a dominant element make the headline count don't use unusual or difficult words use a generalized message that can be reused

use a generalized message that can be reused