IMC test 2 (ch.7)
For which of the following would an advertiser be most likely to use a sales-oriented objective?
A. A direct-response ad for a record album In the above scenario, an advertiser would most likely use a sales-oriented objective for a record album's direct-response ad. Direct-response advertising is one type of advertising that evaluates its effectiveness on the basis of sales. Certain types of promotion efforts are direct action in nature; they attempt to induce an immediate behavioral response from the prospective customer. A major objective of most sales promotion programs is to generate short-term increases in sales.
Which top-down budgeting method is being employed when the budget is determined based on what is felt to be necessary?
A. Arbitrary allocation A weaker method than the affordable method for establishing a budget is arbitrary allocation, in which virtually no theoretical basis is considered and the budgetary amount is often set by fiat. That is, the budget is determined by management solely on the basis of what is felt to be necessary.
Which of the following is at the top of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?
A. Awareness Awareness is at the top of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making.
Which of the following is at the base of the communication effects pyramid?
A. Awareness Awareness is at the base of the communications pyramid. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
To set an advertising budget, a 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?
A. Competitive parity and percentage-of-sales methods The above scenario exemplifies competitive parity and percentage of sales method. In case of the percentage of sales method, management determines the budget amount by taking a percentage of the sales dollars. In case of competitive parity method, marketing managers set their advertising and promotions budgets on the basis of what their competitors allocate.
Which of the following statements is true of communications objectives?
A. It is difficult to translate sales goals into communications objectives. Not all marketing and advertising managers accept communications objectives; some say it is too difficult to translate a sales goal into a specific communications objective. But at some point a sales goal must be transformed into a communications objective.
Which of the following is a major problem associated with the percentage-of-sales method?
A. It reverses the cause-and-effect relationship between advertising and sales. The percentage-of-sales method has some serious disadvantages; letting the level of sales determine the amount of advertising and promotions dollars to be spent reverses the cause-and-effect relationship between advertising and sales.
According to James O. Peckham, which of the following statements provides a good rule of thumb for a company setting the advertising budget for a new product?
A. Its advertising budget should be twice the desired market share. After studying more than 40 years of Nielsen figures, James O. Peckham estimated that the average share of advertising to sales ratio necessary to launch a new product successfully is approximately 1.5:2.0. This means that a new entry should be spending at approximately twice the desired market share.
In the social consumer decision journey, which of the following objectives involves the marketer being aware of what is being said online about the product or brand to gain insights into how it is being perceived in the marketplace, and then respond accordingly?
A. Monitor With respect to objectives and strategies in the social consumer decision journey, the first objective, monitor, deals with the marketer knowing what is being said online about the product or brand to gain insights as to how it is being perceived in the marketplace, and then respond accordingly. This process, according to the model, must take place continuously.
Which of the following problems is a manager most likely to face if he uses sales as a measure of advertising effectiveness?
A. Sales results offer little guidance or direction to those responsible for planning and developing the advertising program. One problem with sales objectives is that they offer little guidance to those responsible for planning and developing the promotional program. The creative and media people working on the account need some direction as to the nature of the advertising message the company hopes to communicate, the intended audience, and the particular effect or response sought.
According to DAGMAR, advertising objectives should be written in measurable terms that specify:
A. a communications task, a target market, a benchmark starting point, a time period, and the degree of change sought. Russell Colley, the founder of DAGMAR, argued that advertising objectives should be stated in terms of concrete and measurable communications tasks, specify a target audience, indicate a benchmark starting point and the degree of change sought, and specify a time period for accomplishing the objective(s).
DAGMAR is:
A. a model for setting advertising goals. Colley developed the DAGMAR model for setting advertising objectives and measuring the results of an ad campaign. The major thesis of this model is that communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
According to the IMC planning model, the flow between communications analysis and budget determination is _____.
A. a two-way interaction According to the IMC planning model, the flow between the communications analysis and budget determination is a two-way interaction.
The _____ stage in Russell Colley's hierarchical model of the communication process deals with getting the consumer to purchase the product.
A. action Colley proposed that the communications task be based on a hierarchical model of the communication process with four stages. With respect to the stages in Russell Colley's hierarchical model of the communication process, the action stage deals with getting the consumer to purchase the product.
We know that the _____ method of budgeting is being employed when an experienced marketing manager responds 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 about how much should be budgeted where."
A. arbitrary allocation The above scenario is an example of the arbitrary allocation method. It is a weaker method than the affordable method for establishing a budget; virtually no theoretical basis is considered and the budgetary amount is often set by fiat. That is, the budget is determined by management solely on the basis of what is felt to be necessary.
As a result of economies of scale, large advertisers:
A. are likely to enjoy more favorable advertising time and space than smaller advertisers. Due to economies of scale, large advertisers are likely to enjoy more favorable time and space positions, cooperation of middle people, and favorable publicity.
Determining a target market's present level of awareness and knowledge of, and liking for, a product often requires _____ measures.
A. benchmark Determining the target market's present position regarding the various response stages requires benchmark measures.
As a tool for budget allocation, multiple regression analysis is most often employed in budget models using:
A. computer simulations. Computer simulation models involve statistical techniques such as multiple regression analysis to determine the relative contribution of the advertising budget to sales.
The two models that are commonly used to explain the relationship between advertising and sales are the:
A. concave-downward function and the S-shaped response function. The relationship between advertising and sales has been the topic of much research and discussion designed to determine the shape of the response curve. Almost all advertisers subscribe to one of two models of the advertising/sales response function: the concave-downward function or the S-shaped response curve.
Before setting objectives for advertising and promotion, an organization should:
A. conduct a situation analysis to identify marketing and promotional issues facing the firm. Integrated marketing communications objectives should be based on a thorough situation analysis that identifies the marketing and promotional issues facing the company or a brand. The situation analysis is the foundation on which marketing objectives are determined and the marketing plan is developed.
The more specific the firm's advertising objectives, the:
A. easier it becomes to measure advertising effectiveness. By setting specific and meaningful objectives, the promotional planner provides a measure(s) that can be used to evaluate the effectiveness of the marketing communications program.
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.
A. economies of scale Larger advertisers can maintain advertising shares that are smaller than their market shares because they get better advertising rates, have declining average costs of production, and accrue the advantages of advertising several products jointly. These advantages are known as economies of scale.
According to Professor Don Schultz, inside-out planning:
A. focuses on what the marketer wants to say, when he wants to say it, and the media he wants to use. Inside-out planning focuses on what the marketer wants to say, when the marketer wants to say it, things the marketer believes are important about his or her brand, and in the media forms the marketer wants to use.
The S-shaped response function implies that:
A. initial advertising expenditures will have little impact on sales. As per the S-shaped response function, initial outlays of the advertising budget have little impact. After a certain budget level has been reached, advertising and promotional efforts begin to have an effect as additional increments of expenditures result in increased sales.
When using the competitive parity method to budgeting, the firm:
A. matches its percentage-of-sales expenditures with those of others in the market/industry. In the competitive parity method, managers establish budget amounts by matching the competition's percentage-of-sales expenditures. The argument is that setting budgets in this fashion takes advantage of the collective wisdom of the industry.
A(n) _____ is a method for allocating budgets that is designed to determine the investment value of the advertising appropriation.
A. payout plan To determine how much to spend, marketers often develop a payout plan that determines the investment value of the advertising and promotion appropriation.
One important purpose of setting specific advertising goals and objectives is to:
A. provide a benchmark against which performance can be measured. An important reason for setting specific objectives is that they provide a benchmark against which the success or failure of the promotional campaign can be measured. Without specific objectives, it is extremely difficult to determine what the firm's advertising and promotion efforts accomplished.
Creative executives from the advertising industry might oppose the DAGMAR approach to setting objectives because it:
A. puts too much emphasis on the quantitative assessment of an advertising campaign. Many creative personnel think the DAGMAR approach is too concerned with quantitative assessment of a campaign's impact on awareness, brand-name recall, or specific persuasion measures. The emphasis is on passing the numbers test rather than developing a message that is truly creative and contributes to brand equity.
To be effective, marketing objectives need to be:
A. realistic and attainable. Good marketing objectives are quantifiable; they delineate the target market and note the time frame for accomplishing the goal (often one year). To be effective, objectives must also be realistic and attainable.
Encouraging current buyers of Spirit, an energy drink, to drink more of the beverage would be an example of a _____ objective.
A. sales-oriented The above scenario is an example of a sales-oriented objective. Sales oriented objectives include: 1) Increasing the percentage of consumers in the target market who associate specific features, benefits, or advantages with our brand, 2) Encouraging current users of the product to use it more frequently or in more situations etc.
The concept of advertising expenditures producing long-term, rather than immediate, results is known as:
A. the carryover effect. Many experts recognize that advertising has a lagged or carryover effect; monies spent on advertising do not necessarily have an immediate impact on sales. Advertising may create awareness, interest, and/or favorable attitudes toward a brand, but these feelings will not result in an actual purchase until the consumer enters the market for the product, which may occur later.
ccording to the concave-downward model:
A. the effects of advertising quickly begin to diminish. According to the concave-downward function model, the effects of advertising quickly begin to diminish. The logic is that those with the greatest potential to buy will likely act on the first (or earliest) exposures, while those less likely to buy are not likely to change as a result of the advertising.
The concave-downward function model is based on:
A. the microeconomics law of diminishing returns. According to the concave-downward function model, the effects of advertising budgets follow the microeconomic law of diminishing returns. That is, as the amount of advertising increases, its incremental value decreases.
Many marketing managers prefer sales-oriented objectives for advertising because they believe that:
A. the reason a company spends money on advertising and promotion is to sell its products or service. To many managers, the only meaningful objective for their promotional program is sales. They take the position that the basic reason a firm spends money on advertising and promotion is to sell its product or service.
DAGMAR MOD II was developed to alleviate problems with:
A. the response hierarchy used in the original DAGMAR model. A major criticism of the DAGMAR approach is its reliance on the hierarchy of effects model. DAGMAR MOD II recognizes that the appropriate response model depends on the situation and emphasizes identifying the sequence of decision-making steps that apply in a buying situation.
According to the DAGMAR model, which of the following is a characteristic of a good objective?
B. A good objective specifies the target audience. Russell Colley, the founder of DAGMAR, argued that advertising objectives should be stated in terms of concrete and measurable communications tasks, specify a target audience, indicate a benchmark starting point and the degree of change sought, and specify a time period for accomplishing the objective(s).
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 outlined by the DAGMAR approach to setting objectives, identify what is wrong with this objective.
B. It does not contain a benchmark starting point and the degree of change sought. Colley argued that advertising objectives should be stated in terms of concrete and measurable communications tasks, specify a target audience, indicate a benchmark starting point and the degree of change sought, and specify a time period for accomplishing the objective(s). In the above scenario, the objective does not contain a benchmark starting point and the degree of change sought.
Which of the following is an advantage of the competitive parity method?
B. It leads to stability in the marketplace by minimizing marketing warfare. The competitive parity method takes the competition into consideration, which leads to stability in the marketplace by minimizing marketing warfare.
product lifecycle negatively influences the advertising budget?
B. Maturity The product life cycle generally involves four stages which are introduction, growth, maturity, and decline. The maturity and decline stages of the product life cycle negatively influence the setting of the advertising budget.
While moving from the base to the tip of the communication effects pyramid, which of the following comes just before trial of a product?
B. Preference While moving from the base to the tip of the communication effects pyramid, preference comes just before trial of a product. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
Which of the following is at the base of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?
B. Purchase Purchase is at the base of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making.
In the social consumer decision journey, which of the following objectives deals with marketers reacting to specific issues regarding the product or brand at a personal level?
B. Respond With respect to the objectives and strategies in the social consumer decision journey, the second objective, respond, deals with marketers responding to specific issues at a personal level. Responses may be positive in nature (customer service or sales leads) or (more likely) be part of crisis management, dealing with negative issues regarding the product or brand.
Which of the following is true of marketing objectives?
B. They are usually defined in terms of specific outcomes such as sales volume, market share, profits, or return on investment. Marketing objectives are generally stated in the firm's marketing plan and are statements of what is to be accomplished by the overall marketing program within a given time period. Marketing objectives are usually defined in terms of specific, measurable outcomes such as sales volume, market share, profits, or return on investment.
According to DAGMAR, the basic function of advertising is to:
B. communicate. The major thesis of the DAGMAR model is that communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
With respect to the stages in Russell Colley's hierarchical model of the communication process, the _____ stage deals with developing an understanding of what the product is and what it will do for the consumer.
B. comprehension Colley proposed that the communications task be based on a hierarchical model of the communication process with four stages. With respect to the stages in Russell Colley's hierarchical model of the communication process, the comprehension stage deals with developing an understanding of what the product is and what it will do for the consumer.
The S-shaped response curve suggests that
B. extremely low advertising budgets will not work. The S-shaped response model suggests a small advertising budget is likely to have no impact beyond the sales that may have been generated through other means such as word of mouth.
The DAGMAR approach to setting objectives has:
B. focused advertisers' attention on the value of using communications objectives rather than sales objectives. DAGMAR focused advertisers' attention on the value of using communications-based rather than sales-based objectives to measure advertising effectiveness and encouraged the measurement of stages in the response hierarchy to assess a campaign's impact.
The _____ method of budgeting is being employed when expenditures are allocated by assigning a fixed amount of the unit product cost to promotion and multiplying this amount by the number of units sold.
B. percentage of sales In case of the percentage of sales method, management determines the budget amount by either (1) taking a percentage of the sales dollars or (2) assigning a fixed amount of the unit product cost to promotion and multiplying this amount by the number of units sold.
Sales-oriented objectives are appropriate for:
B. retail advertising promoting special events. Retail advertising, which accounts for a significant percentage of all advertising expenditures, is one area where the advertiser often seeks an immediate response, particularly when sales or special events are being promoted.
Managers who use the communications effects pyramid to set objectives believe that:
B. the foundation of the communications program is set by accomplishing lower-level objectives such as awareness, knowledge, and comprehension. Advertising and promotion perform communications tasks in the same way that a pyramid is built, by first accomplishing lower-level objectives such as awareness and knowledge or comprehension.
Top-down budgeting methods are commonly used because of:
B. the upper management's desire for control. Tradition and top management's desire for control are probably the major reasons why top-down methods continue to be popular.
According to the criteria outlined in DAGMAR, which of the following makes the best quantitative communications objective?
C. "Increase the number of customers mentioning the brand name when asked for brand preference from 40 percent to 50 percent in one year." Increasing the number of customers mentioning the brand name when asked for brand preference from 40 percent to 50 percent in one year is the best example of a quantitative communications objective. Russell Colley, the founder of DAGMAR, argued that advertising objectives should be stated in terms of concrete and measurable communications tasks, specify a target audience, indicate a benchmark starting point and the degree of change sought, and specify a time period for accomplishing the objective(s).
Which of the following statements best describes the relationship between marketing and communications objectives?
C. Communications objectives are derived from marketing objectives. must be able to translate general marketing goals into communications goals and specific promotional objectives. Sometimes companies do not have a formal marketing plan, and the information needed may not be readily available. In this case, the promotional planner must attempt to gather as much information as possible about the product and its markets from sources both inside and outside the company.
Which of the following is a quantitative model to budgeting advertising expenditures?
C. Computer simulation model Attempts to apply quantitative models to budgeting have met with limited success. For the most part, these methods employ computer simulation models involving statistical techniques such as multiple regression analysis to determine the relative contribution of the advertising budget to sales.
According to the factors influencing advertising budgets, which of the following stages of a product lifecycle leads to a positive effect of advertising on sales?
C. Introduction The product life cycle generally involves four stages: introduction, growth, maturity, and decline. The introductory and growth stages of the product life cycle positively influence the setting of the advertising budget
Which of the following strategy factors leads to a positive effect of advertising on sales?
C. Long channels of distribution Long channels of distribution are one of the strategy factors that lead to a positive effect of advertising on sales.
According to Don Schultz, in which type of communications planning process do the promotional planners study the various media customers and prospects use, when the marketer's messages might be most relevant to customers, and when customers are likely to be most receptive to the message?
C. Outside-planning Don Schultz advocates an outside-in planning process for IMC that starts with the customer and builds backward to the brand. This means that promotional planners study the various media customers and prospects use, when the marketer's messages might be most relevant to customers, and when they are likely to be most receptive to the message.
Which of the following budgeting procedures would be used if a firm wanted a method that is simple to understand, easy to implement, financially safe, and keeps the spending within reasonable limits?
C. Percentage of sales Proponents of the percentage-of-sales method cite a number of advantages. It is financially safe and keeps ad spending within reasonable limits. The percentage-of-sales method is simple, straightforward, and easy to implement.
In the _____ method of budget determination, advertising is considered an investment, similar to plant and equipment.
C. ROI budgeting In the ROI budgeting method, advertising and promotions are considered investments, like plant and equipment.
Which of the following factors creates a positive relationship between advertising and sales?
C. The basis for product differentiation The basis for product differentiation creates a positive relationship between advertising and sales.
According to the promotional budgeting approaches, which of the following is an example of a top-down approach?
C. The competitive parity method Top-down methods include the affordable method, arbitrary allocation, percentage of sales, competitive parity, and return on investment (ROI).
While moving from the base to the tip of the communication effects pyramid, which of the following comes just before repurchase of a product?
C. Trial While moving from the base to the tip of the communication effects pyramid, trial comes just before repurchase of a product. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
The _____ method of budgeting is being employed when expenditure is allocated by an analysis of expenditure in areas such as production and operations, and the amount left over is considered to be the advertising budget.
C. affordable In the affordable method, the firm determines the amount to be spent in various areas such as production and operations. Then it allocates what's left to advertising and promotion, considering this to be the amount it can afford.
In the social consumer decision journey, _____ deals with designing the communications program.
C. amplification In the social consumer decision journey, amplification deals with designing the communications program—particularly as it relates to social media—to foster engagement and sharing, as well as loyalty. The objective of amplifying is to get consumers more involved in the brand, extending the experience the brand has to offer, and have them communicate their positive experiences to others in the social network.
According to Duncan's zero-based marketing communications planning approach:
C. big ideas for a promotional campaign are typically based on public relations, advertising, sales promotion, or media advertising. Zero-based communications planning approach focuses on the task to be done and searches for the best ideas and media to accomplish it. The promotional planner should determine what role various sales promotion techniques, publicity and public relations, direct marketing, the Internet, and personal selling will play in the overall marketing program.
Under the DAGMAR model, a _____ can be performed by, and attributed to, advertising rather than to a combination of marketing factors.
C. communications task Under the DAGMAR approach, an advertising goal involves a communications task that is specific and measurable. A communications task, as opposed to a marketing task, can be performed by, and attributed to, advertising rather than to a combination of several marketing factors.
A disadvantage of the _____ method is its assumption that the programs of firms with similar promotional expenditures will be equally effective.
C. competitive parity The competitive parity method has a number of disadvantages. For one, it ignores the fact that advertising and promotions are designed to accomplish specific objectives by addressing certain problems and opportunities. Second, it assumes that because firms have similar expenditures, their programs will be equally effective.
Before beginning its new advertising campaign, Capital Bank conducted a study to determine its clients' levels of awareness and knowledge of the bank and its services, as well as their perceptions of the bank's image. This was done to:
C. establish benchmark measures. In the above scenario, Capital Bank was trying to establish benchmark measures. Determining the target market's present position regarding the various response stages requires benchmark measures. It often involves conducting a market research study to determine prevailing levels of the response hierarchy.
as a result of economies of scale, smaller advertisers:
C. get higher advertising rates than large advertisers. Due to economies of scale, firms and/or brands maintaining a large share of the market have an advantage over smaller competitors and thus can spend less money on advertising and realize a better return.
In the case of the marginal-analysis approach, profits are shown to be a result of:
C. gross margin minus advertising expenditures. According to the concept of marginal analysis, as advertising/promotional expenditures increase, sales and gross margins also increase to a point, but then they level off. Profits are shown to be a result of the 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. We can tell him that:
C. his task could be made easier by setting specific communication objectives. . In the above example, we can tell Arden that his task could be made easier by setting specific communication objectives. An important reason for setting specific objectives is that they provide a benchmark against which the success or failure of the promotional campaign can be measured. By setting specific and meaningful objectives, the promotional planner provides a measure(s) that can be used to evaluate the effectiveness of the marketing communications program.
The first task in the objective and task method of budgeting is to:
C. isolate advertising objectives. The first step in the objective and task method of budget setting is to isolate the objectives. When the promotional planning model is presented, a company will have two sets of objectives to accomplish—the marketing objectives for the product and the communications objectives. After the former are established, the task involves determining what specific communications objectives will be designed to accomplish these goals.
The most commonly utilized method of budget determination by large firms is the:
C. percentage of sales method. Perhaps the most commonly used method for budget setting (particularly in large firms) is the percentage-of-sales method, in which the advertising and promotions budget is based on sales of the product.
According to Professor Don Schultz, outside-in planning
C. starts with the customer and builds backward to the brand when developing an IMC program. Schultz advocates an outside-in planning process for IMC that starts with the customer and builds backward to the brand. This means that promotional planners study the various media customers and prospects use, when the marketer's messages might be most relevant to customers, and when they are likely to be most receptive to the message.
When higher-level executives determine the budget amounts to be allocated for each department's advertising expenditures, a _____ approach is being used.
C. top-down n case of top-down approaches, the budgetary amount is established (usually at an executive level) and then the monies are passed down to the various departments. These budgets are essentially predetermined and have no true theoretical basis. Top-down methods include the affordable method, arbitrary allocation, percentage of sales, competitive parity, and return on investment (ROI).
Which of the following is true of the percentage-of-sales method?
C. It is simple and straightforward. Proponents of the percentage-of-sales method cite a number of advantages. It is financially safe and keeps ad spending within reasonable limits. The percentage-of-sales method is simple, straightforward, and easy to implement.
Which of the following statements is true of communications objectives?
D. Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals. Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals and objectives, which has become one of the most influential approaches to the advertising planning process.
Which of the following budgeting methods requires a marketing manager to use input from a clipping service?
D. Competitive parity method In case of competitive parity method, smaller companies often use a clipping service, which clips competitors' ads from local print media, allowing the company to work backward to determine the cumulative costs of the ads placed.
Robert is working in the advertising department of a large consumer-product company. He suggests that the company use the DAGMAR approach for setting advertising goals. Which of the following statements is Robert likely to hear as an argument against the use of the DAGMAR approach?
D. DAGMAR is too concerned with quantitative assessment of a campaign's impact on awareness. In the above scenario, Robert is likely to hear that DAGMAR is too quantitative for most managers to understand. Many creative personnel think the DAGMAR approach is too concerned with quantitative assessment of a campaign's impact on awareness, brand-name recall, or specific persuasion measures. The emphasis is on passing the numbers test rather than developing a message that is truly creative and contributes to brand equity.
Which of the following is considered a major criticism of the DAGMAR approach?
D. Its reliance on the hierarchy of effects model. A major criticism of the DAGMAR approach is its reliance on the hierarchy of effects model. The fact that consumers do not always go through this sequence of communications effects before making a purchase has been recognized, and alternative response models have been developed
n the social consumer decision journey, which of the following objectives is designed to take the consumer to long-term behavioral changes?
D. Lead With respect to objectives and strategies in the social consumer decision journey, the final objective, lead, is designed to take the consumer to long-term behavioral changes. At the early stages of the process, it may simply include creating more brand awareness. Later in the process, lead may be designed to create buzz or promote time-sensitive issues like sales or promotions.
According to Robert Steiner, which of the following terms is synonymous with contribution margin?
D. Marginal analysis Contribution margin is the difference between the total revenue generated by a brand and its total variable costs. Robert Steiner says that marginal analysis and contribution margin are essentially synonymous terms.
Which of the following allocation methods makes use of a buildup approach to setting budgets?
D. Objective and task The objective and task method of budget setting uses a buildup approach consisting of three steps: (1) defining the communications objectives to be accomplished, (2) determining the specific strategies and tasks needed to attain them, and (3) estimating the costs associated with performance of these strategies and tasks. The total budget is based on the accumulation of these costs.
_____ 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.
D. Zero-based communications planning Zero-based communications planning involves determining what tasks need to be done and which marketing communications functions should be used and to what extent. This approach focuses on the task to be done and searches for the best ideas and media to accomplish it.
According to the concave-downward function:
D. as the amount of advertising increases, its incremental value decreases. According to the concave-downward function, the effects of advertising budgets follow the microeconomic law of diminishing returns. That is, as the amount of advertising increases, its incremental value decreases.
The _____ budgetary allocation method is designed to promote stability and minimize marketing warfare as well as take advantage of the collective wisdom of the industry.
D. competitive parity In the competitive parity method, managers establish budget amounts by matching the competition's percentage-of-sales expenditures. The argument is that setting budgets in this fashion takes advantage of the collective wisdom of the industry. It also takes the competition into consideration, which leads to stability in the marketplace by minimizing marketing warfare
The carryover effect:
D. is particularly apparent with mature, low-priced, and frequently purchased products. A review of econometric studies that examined the duration of cumulative advertising effects found that for mature, frequently purchased, low-priced products, advertising's effect on sales lasts up to nine months. Models have been developed to account for the carryover effect of advertising and to help determine the long-term effect of advertising on sales. The carryover effect adds to the difficulty of determining the precise relationship between advertising and sales.
Direct-response advertisers generally set objectives and measure success in terms of:
D. sales response generated by an ad. Direct-response advertising is one type of advertising that evaluates its effectiveness on the basis of sales. The direct-response advertiser generally sets objectives and measures success in terms of the sales response generated by the ad.
n the _____ method to budgeting, sales are projected for the coming year based on the marketing manager's estimates.
D. straight-percentage In the straight-percentage method, sales are projected for the coming year based on the marketing manager's estimates. The budget is a percentage of these sales, often an industry standard percentage
A marketing firm decides to purchase some media time in an attempt to sell its new product. After purchasing approximately $1 million worth of time, it notices no impact on the sales of the product. However, when it increases the media time to the value of $3 million, a substantial increase in sales is observed. This change is best explained by
D. the S-shaped response function. The increase in sales in the above scenario is best explained by an S-shaped response function. As per the S-shaped response function, initial outlays of the advertising budget have little impact. After a certain budget level has been reached, advertising and promotional efforts begin to have an effect, as additional increments of expenditures result in increased sales.
The objective and task method is most difficult to use when:
D. the product to be promoted is new to the market. The objective and task method offers advantages over methods discussed earlier but is more difficult to implement when there is no track record for the product.
_____ 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.
E. DAGMAR The major thesis of the DAGMAR model is that communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
Which of the following statements describes an inherent weakness in the use of the marginal-analysis model for establishing an advertising budget?
E. It assumes that sales are determined solely by advertising and promotion. Marginal analysis approach assumes that sales are determined solely by advertising and promotion. However, it ignores the fact that environmental factors may also affect the promotional program, leading the marketing manager to assume the advertising was or was not effective when some other factor may have helped or hindered the accomplishment of the desired objectives.
For which of the following advertising communication tasks should the specified time period be the longest?
E. Repositioning a brand Awareness levels for a brand can be created or increased fairly quickly through an intensive media schedule of widespread, repetitive advertising to the target audience. Repositioning of a product requires a change in consumers' perceptions and takes much more time.
Which of the following is at the top of the communication effects pyramid?
E. Repurchase Repurchase is at the top of the communication effects pyramid. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
Which of the following is true of the arbitrary allocation method?
E. This method has no obvious advantages. The arbitrary allocation approach has no obvious advantages. No systematic thinking has occurred, no objectives have been budgeted for, and the concept and purpose of advertising and promotion have been largely ignored.
The _____ stage in Russell Colley's hierarchical model of the communication process deals with informing consumers of the existence of the brand or company.
E. awareness Colley proposed that the communications task be based on a hierarchical model of the communication process with four stages. The awareness stage deals with making the consumer aware of the existence of the brand or company.
The _____ method of budgeting is being employed when expenditures are allocated based on the industry averages of advertising expenditures. The budget is set to maintain a level consistent with industry spending.
E. competitive parity In the competitive parity method, managers establish budget amounts by matching the competition's percentage-of-sales expenditures. The argument is that setting budgets in this fashion takes advantage of the collective wisdom of the industry.
According to the _____ model, the effects of advertising budgets follow the microeconomics law of diminishing returns.
E. concave-downward According to the concave-downward function model, the effects of advertising budgets follow the microeconomic law of diminishing returns. That is, as the amount of advertising increases, its incremental value decreases.
Defining the communications goals to be accomplished and estimating the costs associated with the performance of the necessary strategies and activities are steps in the _____ method of budgeting.
E. objective and task The objective and task method of budget setting uses a buildup approach consisting of three steps: (1) defining the communications objectives to be accomplished, (2) determining the specific strategies and tasks needed to attain them, and (3) estimating the costs associated with performance of these strategies and tasks.
Repositioning of a product requires lesser time than creating or increasing the awareness levels for a brand.
FALSE Awareness levels for a brand can be created or increased fairly quickly through an intensive media schedule of widespread, repetitive advertising to the target audience. Repositioning of a product requires a change in consumers' perceptions and takes much more time.
In the top-down approach, the budgetary amount is established usually at the departmental level.
FALSE In top-down approaches, budgetary amount is established usually at an executive level and then the monies are passed down to the various departments. These budgets are essentially determined and have no true theoretical basis.
An inside-out planning process for integrated marketing communications (IMC) starts with the customer and builds backward to the brand.
FALSE Inside-out planning process begins with the marketer. It focuses on what the marketer wants to say, when the marketer wants to say it, and about things the marketer believes are important. An outside-in planning process for IMC starts with the customer and builds backward to the brand.
Planners who view promotion from a communications perspective believe that the objective of advertising is to increase market share through sales.
FALSE Many planners approach promotion from a communications perspective and believe that the objective of advertising and other promotional-mix elements is usually to communicate information or a selling message about a product or service. Other managers argue that sales or some related measure, such as market share, is the only meaningful goal for advertising and promotion and should be the basis for setting objectives.
When times get tough, managers who treat the communications budget as an investment instead of an expense tend to cut down the advertising and promotional budget first.
FALSE Most managers treat the communications budget as an expense rather than an investment. As a result, when times get tough, the advertising and promotional budget is the first to be cut—even though there is strong evidence that exactly the opposite should occur
An advantage of sales-oriented objectives is that they provide sufficient guidance to those responsible for planning and developing the promotional program.
FALSE One problem with sales objectives is that they offer little guidance to those responsible for planning and developing the promotional program. The creative and media people working on the account need some direction as to the nature of the advertising message the company hopes to communicate, the intended audience, and the particular effect or response sought
According to the concave-downward function model, as the amount of advertising decreases, its incremental value increases.
FALSE The effects of advertising budgets follow the microeconomic law of diminishing returns. As the amount of advertising increases, its incremental value decreases. The logic is that those with the greatest potential to buy will likely act on the first (or earliest) exposures, while those less likely to buy are not likely to change as a result of the advertising.
The initial stages, at the base of the communications effects pyramid, are harder to accomplish than those toward the top, such as trial and repurchase.
FALSE The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid (or down the funnel).
In the objective and task method to budget setting, managers closest to the marketing effort do not have specific strategies to achieve the objective.
FALSE The major advantage of the objective and task method is that the budget is driven by the objectives to be attained. The managers closest to the marketing effort will have specific strategies and input into the budget-setting process.
There is strong, consistent evidence that cutting back on advertising does not hurt sales during and after a recession.
FALSE There is strong, consistent evidence that cutting back on advertising can hurt sales during and after a recession.
If sales is used as a direct measure of response to advertising, products characterized as large-dollar purchases and those in the maturity or decline stages of the product would be less likely to benefit.
TRUE A weakness in attempting to use sales as a direct measure of response to advertising is that various situational factors may have an effect. Products characterized as large-dollar purchases and those in the maturity or decline stages of the product would be less likely to benefit.
In the integrated marketing communications (IMC) model, the flow between the communications analysis and budget determination is a two-way interaction
TRUE In the IMC planning model, flow of the processes is unidirectional, while the flow between the communications analysis and budget determination is a two-way interaction. What this means is that while establishing objectives is an important part of the planning process, the limitations of the budget are important too.
The competitive parity method takes advantage of the collective wisdom of the industry.
TRUE In the competitive parity method, managers establish budget amounts by matching the competition's percentage-of-sales expenditures. The argument is that setting budgets in this fashion takes advantage of the collective wisdom of the industry.
Critics of communications-oriented objectives argue that it is too difficult to translate a sales goal into a specific communications objective.
TRUE Not all marketing and advertising managers accept communications objectives; they say that it is too difficult to translate a sales goal into a specific communications objective
An objective is said to be measurable if it specifies a method and criteria for determining how well a program is working.
TRUE One characteristic of good objectives is that they are measurable; they specify a method and criteria for determining how well the promotional program is working. By setting specific and meaningful objectives, the promotional planner provides a measure(s) that can be used to evaluate the effectiveness of the marketing communications program.
Managers generally believe that promotional spending represents an investment of a firm's resources that requires an economic justification.
TRUE Promotional spending represents an investment of a firm's resources that requires an economic justification. Managers generally compare investment options on a common financial basis, such as return on investment (ROI).
In the arbitrary allocation approach, no systematic thinking occurs and no objectives are budgeted for.
TRUE The arbitrary allocation approach has no obvious advantages. No systematic thinking has occurred, no objectives have been budgeted for, and the concept and purpose of advertising and promotion have been largely ignored.
Under the Defining Advertising Goals for Measured Advertising Results (DAGMAR) approach, an advertising goal involves a communications task that is specific and measurable.
TRUE Under the DAGMAR approach, an advertising goal involves a communications task that is specific and measurable. A communications task, as opposed to a marketing task, can be performed by, and attributed to, advertising rather than to a combination of several marketing factors.
Marginal analysis assumes that sales are a direct result of advertising and promotional expenditures and that this effect can be measured.
TRUE While marginal analysis seems logical intuitively, certain weaknesses limit its usefulness. These weaknesses include the assumptions that (1) sales are a direct result of advertising and promotional expenditures and this effect can be measured and (2) advertising and promotion are solely responsible for sales
While the social consumer decision journey may differ from traditional response hierarchies, it is also similar in that it envisions going through stages in the purchase decision.
TRUE While the social consumer decision journey may differ from traditional response hierarchies, it is also similar in that it envisions going through stages in the purchase decision. Like traditional model, marketers need to take specific marketing actions to help the consumer along through the process.