practice 15
Which of the following is the formula to determine the return on investment for an advertisement?
(Net sales - Advertising cost)/Advertising cost
What is a brand?
A brand is "a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers."
How can having strong brands benefit a retailer?
A brand with good equity, also known as a strong brand name, influences customers' decision processes, often by encouraging their repeat visits, which in turn leads to greater loyalty. In addition, strong brand names enable retailers to increase their margins because customers will tolerate higher prices. When retailers have high customer loyalty, they can engage in premium pricing and reduce their reliance on price promotions to attract customers. Brands with weaker images instead must offer lower prices and have frequent sales to maintain their market share.
_____ entails the placement of announcements and persuasive messages purchased by retailers and other organizations that seek to inform and/or persuade members of a particular target market or audience about their products, services, organizations, or ideas.
Advertising
Why is it problematic for retailers to spend about the same on communication programs for each geographic region?
An easy way to make allocation decisions is to spend about the same in each geographic region or for each merchandise category. But this allocation rule probably won't maximize profits, because it ignores the possibility that communication programs might be more effective for some merchandise categories or for some regions than for others.
Which among the following is the largest group of national advertisers in the United States?
Automobile industry
_____ refers to a potential customer's ability to recognize or recall that the brand name is a particular type of retailer or product/service.
Brand awareness
How can brands benefit the consumer?
Brands provide information in advance about the shopping experience that they are likely to face when they patronize this retailer. They also affect customers' confidence in their decisions to buy merchandise from a retailer. Finally, brands can enhance customers' satisfaction with merchandise and services. Consumers feel different when wearing jewelry bought from Tiffany & Co. rather than Zales or when staying at a Ritz-Carlton hotel rather than a Fairfield Inn.
Which of the following is a reason why retailers tend to use magazines for image advertising?
Customer relationship management programs
What can a retailer do to keep customers from being confused about the retailer's image?
Develop an integrated marketing communication program to deliver a consistent message
A retailer has to confirm the receipt of an online shipping order to its customer. Which of the following mediums is best suited for this purpose?
Which of the following is typically the first step in developing a retail communication program?
Establish objectives.
Target Field in Minneapolis, Minnesota, "Home of the Twins" baseball team venue is an example of what type of communication method?
Event sponsorship
Aided recall is the highest level of brand awareness.
F
Brand association refers to a potential customer's ability to recognize or recall that the brand name is a particular type of retailer or product/service.
F
Spots have relatively large audiences, but they are expensive for local retailers.
F
The objective-and-task method uses past sales and communication activities to determine the present communication budget.
F
In the late 90s, Sears spent much of its communication budget advertising the "Softer Side of Sears" campaign since it felt the customer knew very little of Sears' apparel assortments and thus there would be a substantial return from advertising apparel versus advertising the more known appliances. What principle for budget allocation was Sears potentially using?
High-assay principle
Which of the following is typically the last step in developing a retail communication program?
Implement and evaluate programs.
What can a retailer do to build the brand equity of its firm or private-label merchandise?
In order for a retailer to build the brand equity of its firm or private-label merchandise, they need to (1) create a high level of brand awareness, (2) develop favorable associations with the brand name, and (3) consistently reinforce the image of the brand.
Which of the following is a well-stated communication program objective?
Increase brand awareness by 15% in the next 6 months.
Why is it necessary for retailers to develop and implement an integrated communication program?
It is necessary for retailers to develop and implement a communication program that is both comprehensive and consistent throughout all elements of their retail mix and across all delivery channels. Through this they can build appealing brand images, to attract customers to stores and Internet sites, to encourage them to buy merchandise, and to develop customer loyalty. Without a coordinated and integrated effort, there may be mixed messages to the customers causing customers to become confused about the retailer's image and therefore not patronizing the store.
Which of the following is an example of top-of-mind awareness?
Jason asks Shaun what his favorite brand of car is, and Shaun replies BMW.
Which of the following is an example of aided recall?
Kelvin asks Mark if he knows Harley Davidson, and Mark answers yes.
Target uses a Shopkick app to award points to customers who walk around a store and scan products; they can redeem these points for various rewards. Which of the following technologies will best suit this sales promotion?
M-commerce
In most cases, which of the following is a reason why it is very hard to perform a marginal analysis?
Managers don't know the relationship between communication and sales.
_____ is based on the economic principle that firms should increase communication expenditures as long as each additional dollar spent generates more than a dollar of additional contribution.
Marginal analysis
Why is marginal analysis the most economically correct method for setting communication budgets? Why is it still a challenge for retailers to use this method?
Marginal analysis is based on the economic principle that firms should increase communication expenditures so long as each additional dollar spent generates more than a dollar of additional contribution. Marginal analysis is not widely used because managers do not know the precise relationship between communication expenses and sales.
Luke was interested in developing a communication budget for his holistic vitamin shop which he will be opening in thirty days. He is planning a few promotional sales and will advertise through local newspapers. With the available information, what method would be best for Luke to pursue to develop his communication program?
Objective-and-task method
Which method for determining a communication method helps to ensure that the retailer will not spend beyond its means?
Percentage-of-sales method
_____ is a communication process in which sales associates help customers satisfy their needs through face-to-face exchanges of information
Personal selling
David visits a supermarket to buy milk and eggs. At the checkout counter, waiting to pay, he impulsively picks up a magazine from one of the display shelves. Which of the following terms best reflects the supermarket's strategy?
Point-of-purchase display
Janessa prefers high-end cosmetics, but she also likes a good deal. She only purchases her make-up at department stores when they have a gift with purchase. Today she saw at Macy's that if she buys $35 worth of Lancôme cosmetics she would receive a gift with purchase. This gift with purchase is a form of what kind of sales promotion?
Premium
_____ are advertisements printed at the retailer's expense and distributed as an insert in the newspaper.
Preprints
Michael, an actor, plays the protagonist in a sitcom. As per his contractual obligations, he is required to be seen drinking Fizzy Cola, a brand of soda pop, at least once in every episode. Which of the following terms best reflects this situation?
Product placement
Which of the following forms of communication is the most expensive?
Salespeople
Peter visits a local supermarket to buy groceries. While shopping, a sales executive approached him and enquires if he would be willing to try out a new brand of cookies. Which of the following terms best reflects the supermarket's strategy?
Sample
Which of the following is classified as in-store marketing?
Sample
The famous designer, Isaac Mizrahi, made a scheduled appearance at Borders bookstore in Mall of America to sign copies of his book "How to Have Style". This is an example of what type of communication method?
Special event
A co-op (cooperative) program is a promotional program undertaken by a vendor and a retailer working together.
T
A premium offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing.
T
Communication objectives are specific goals related to the retail communication mix's effect on the customer's decision-making process.
T
M-commerce is the buying and selling of goods and services through wireless handheld devices.
T
On a blog, an individual blogger or a group of users regularly record their opinions and various topical information on a web page.
T
Sentiment mining is a process whereby retailers can tap into a variety of online chat formats to collect consumer comments and then analyze these data to identify customers' overall attitudes and preferences for products and advertising campaigns.
T
List the four steps involved in developing a retail communication program.
The four steps involved in developing a retail communication program are: (1) Setting communication objectives that are specific and related to the retail communication mix's effect on the customer's decision-making process (2) Determining a budget through a method, the best method being the marginal analysis method (3) Allocating the budget deciding how much of the budget should go into what communication element, merchandise category, geographic regions, etc. (4) Implementing and evaluating (then planning again for the next period
A retailer's magazine advertising campaign builds an image of elegance and high fashion, yet the store's sales promotions emphasize low prices. Because of the inconsistencies, consumers are left confused about the retailer's image and tend to shop elsewhere. What should the store manager do to resolve the problem of inconsistency with the communication mix?
The manager should develop an integrated marketing communication program.
What is the major disadvantage associated with using the competitive parity method of determining a retail communication budget?
The method does not allow retailers to exploit the unique opportunities or problems they confront in a market.
Which of the following is the formula for calculating click-through rate?
The number of times a user clicks on an ad/Number of impressions
What are the disadvantages associated with using the percentage-of-sales method for establishing a retail communication budget?
The problem with the percentage-of-sales method is that it assumes that the same percentage used in the past, or used by competitors, is appropriate for the future. Also, it assumes that communication expenses don't stimulate sales and profit.
Which of the following is a reason for the decline in the growth of newspaper advertising by retailers?
The retailers have begun using other media
A retailer wants to announce up-to-date and fast changing information to excite customers. Which of the following platforms will best suit the retailer's needs?
Which of the following is classified as a microblog?
A retailer has developed a promotional video for his business. Which of the following new media platforms is best suited to host this video on the internet?
Youtube
The _____ method assumes that communication expenses are just a cost of business and do not promote sales and profit.
affordable budgeting
The _____ method uses the difference between the forecasted sales and the expenses plus the desire profit for the communication budget.
affordable budgeting
When retailers use the _____ method, it is easiest to cut communication program expenses if retail sales fail to meet the sales plan rather than increasing the communication expenses to try and generate additional sales.
affordable budgeting
A _____ is "a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers."
brand
Cinderella's castle would be an example of a(n) _____.
brand association of Walt Disney
The value a brand image provides retailers is referred to as _____.
brand equity
In a national print advertisement, Levi's was showcasing their new denim jean products. At the bottom of the ad, Macy's logo was found as a place where the new denim jeans could be purchased by customers. This is an example of _____.
co-op advertising
Sports Authority anticipates running a print advertisement campaign during the beginning of the year in support of customers' anticipated New Year's resolutions to get in physical shape. Sports Authority asks their key vendors to partner with them in covering the expenses of the ad campaign. Vendors agree to support the _____ as long as they are certain that their products will be featured in the advertisements.
co-op advertising
Similar to the other rule-of-thumb methods, the _____ doesn't allow retailers to exploit the unique opportunities or problems they confront in a market.
competitive parity method
A(n) _____ is a promotional program undertaken by a vendor and a retailer working together.
cooperative program
The Macy's Thanksgiving Day Parade is an example of _____.
event sponsorship
The retailer allocates the budget to areas that will yield the greatest return. This approach for allocating a budget is referred to as the _____.
high-assay principle
In new media, _____ refer to the number of times an ad appears in front of the user.
impressions
The _____ determines the budget required to undertake specific tasks to accomplish communication objectives.
objective-and-task method
When developing a retail communication program, communication objectives are set when the _____.
objectives are established
When developing a retail communication program, sales goals are set when the _____.
objectives are established
For a multi-chain's new store location, the most inappropriate communication program budget method would be _____.
percentage-of-sales
Retailers use _____ to determine the communication budget by forecasting sales during the budget period and then applying a predetermined percentage to set the budget.
percentage-of-sales method
A _____ offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing.
premium
A freestanding insert (FSI) is also called a(n) _____.
preprint
Target Corporation is planning to give $500 million by the end of 2015 to support education and help kids learn to read. Since 1962, Target has committed 5% of its income to support local communities. Target uses _____ to communicate their continued commitment to local communities.
public relations
When a retailer makes a generous contribution to a charity and the event is covered on the evening news, it would be a method of communicating through _____.
public relations
Andrea wants to build top-of-mind awareness for her nail shop. The best way for her to develop this awareness would be to _____.
repeatedly expose customers to the name of the shop through advertising
The _____ uses past sales and communication activities to determine the present communication budget.
rule-of-thumb method
Retailers are the _____ group of national advertisers in the United States.
second-largest
When developing a retail communication program, a marginal analysis takes place when _____.
the budget is determined
Under the competitive parity method, the communication budget is set so that _____.
the retailer's share of the communication expenses equals its share of the market
Retailers build top-of-mind awareness by _____.
using memorable symbols