MKT 3540 CH 3

Identify a disadvantage of using the decentralized approach in promotion planning. Multiple choice question. Brand managers lack authority over the functions needed to implement the plans they develop. Brand managers cannot perceive the opportunities for brands or the threats to them. The system cannot adjust to the various aspects of the advertising and promotional program. The system does not allow managers to focus on short-run planning and administrative tasks.

Brand managers lack authority over the functions needed to implement the plans they develop.

What is the arrangement between advertising agencies and their clients under the fixed-fee method? Multiple choice question. Clients agree to pay the agencies a fee based on the costs of their work plus some agreed-on profit margin. Agencies add a markup of percentage charges to various services they purchase from outside providers. Clients and agencies agree on the amount the agencies will be paid for a specific amount of work. Agencies are compensated above their basic costs if they exceed results as measured by agreed-upon metrics.

Clients and agencies agree on the amount the agencies will be paid for a specific amount of work.

Which of the following are advantages of using in-house agencies over outside agencies for advertising? (Check all that apply.) Multiple select question. Easier coordination of promotions with overall marketing program Better objectivity in judging the market and ad campaign Lower turnover Closer ties to top management

Easier coordination of promotions with overall marketing program, Lower turnover, and Closer ties to top management

Identify the materials that an advertising department develops for the sales force to use when calling on customers. (Check all that apply.) Multiple select question. Employee profiles Sales promotion tools Point-of-purchase displays Advertising materials

Sales promotion tools, Point-of-purchase displays, and Advertising materials

Why is the practice of media rebates an issue? (Check all that apply.) Multiple select question. It is often uncertain whether the savings should be transferred to the clients. Large media buying firms are unable to extract cost savings for their clients. There is a strict definition of media rebates. It is unclear what constitutes a media rebate.

It is often uncertain whether the savings should be transferred to the clients and it is unclear what constitutes a media rebate

Identify a disadvantage of using in-house agencies in promotional processes. Multiple choice question. They cannot perceive threats to individual brands. They increase the flexibility of a company's advertising. They increase advertising and promotion costs. They cannot be dismissed if their performance is not satisfactory.

They cannot be dismissed if their performance is not satisfactory.

Which of the following are statements about outside advertising agencies are true? (Check all that apply.) Multiple select question. They employ creatives, such as writers, but not analysts or researchers. They rarely can provide the client with an objective viewpoint of the market. They have experience with marketing problems while the client may not. They can often provide insight into the client's industry and competitors.

They have experience with marketing problems while the client may not and They can often provide insight into the client's industry and competitors.

Identify an organization that offers a collateral service to an advertising agency. Multiple choice question. A full-service agency A package design firm A creative boutique A digital agency

a package design firm

Identify a primary research source used by the research department of an advertising agency. Multiple choice question. A paper published in a journal A magazine publication An article on the Internet A questionnaire filled out by a customer

a questionnaire filled out by a customer

A(n) ______ is responsible for interpreting an advertiser's marketing and promotions needs to the personnel of the advertising agency. Multiple choice question. category manager account executive brand manager media specialist

account executive

Employees of an advertising agency who gather information that is relevant to a client's product or service and can be used in the development of an integrated marketing communications campaign are called ______. Multiple choice question. account planners brand managers direct-marketing specialists category managers

account planners

______ are the links between advertising agencies and their clients. Multiple choice question. Research departments Finance departments Creative services Account services

account services

A(n) ______ is a service organization that specializes in planning and executing advertising programs for its clients. Multiple choice question. media company specialist boutique executive institution advertising agency

advertising agency

An external firm that specializes in the creation, production, and/or placement of a marketing communications message is known as a(n) ______. Multiple choice question. advertising agency client media organization advertiser

advertising agency

In a centralized organization, the responsibility for all promotions activities except sales is placed on a(n) ______. Multiple choice question. advertising manager brand manager product manager copyright manager

advertising manager

A qualitative audit of an advertising agency focuses on the ______. Multiple choice question. agency's efforts in developing an advertising program payments to media and outside suppliers verification of the agency's costs and expenses number of personnel hours charged to an account

agency's efforts in developing an advertising program

A centralized advertising system results in a more efficient operation because it ______. Multiple choice question. provides a quicker response to specific needs and problems of a product or brand increases the number of people who understand the overall marketing strategy allows fewer people to be involved in the program decisions handles multiple product lines with increased efficiency

allows fewer people to be involved in the program decisions

A public relations firm specializes in ______. Multiple choice question. developing various digital marketing tools such as websites for the Internet developing and managing contests, sweepstakes, and refunds and rebates providing mobile marketing and social media campaign services analyzing the relationships between the client and various publics

analyzing the relationships between the client and various publics

A feature of brand managers under a decentralized system is that they _____. Multiple choice question. cannot interact with marketing communications specialists are responsible for planning, budgeting, sales, and profit performance cannot use external advertising agencies

are responsible for planning, budgeting, sales, and profit performance

______ refer to the amount of client money that agencies spend on media purchases. Multiple choice question. Incentives Billings Commissions Fixed fees

billings

One of the most effective ways in which an advertising agency can gain new business is by ______. Multiple choice question. using ad agency review consultants to pitch its sales breaking ties with existing clients hiring a completely new creative team building a reputation for doing excellent work

building a reputation for doing excellent work

Bell & Price Inc., an advertising agency, wins the Cannes Lions Awards and gains two new clients as a result. In this scenario, Bell & Price has gained new clients by ______. Multiple choice question. making solicitations building a reputation for outstanding creative work seeking referrals conducting public relations activities

building a reputation for outstanding creative work

Under the ________________ system, companies have an additional layer of management above the brand managers to coordinate their efforts in handling a related group of products.

category management

In an integrated marketing communications process, ______ have the goods, services, or causes to be marketed. Multiple choice question. advertising agencies public relations firms media organizations clients

clients

The support functions used by advertisers, agencies, media organizations, and specialized marketing communication firms are known as _______________ services.

collateral

A disadvantage of using the decentralized approach in promotion planning is that brand managers ______. Multiple choice question. cannot handle multiple product lines compete with each other for resources only concentrate on some individual brands take a long time to respond to threats faced by brands

compete with each other for resources

Identify an advantage of using decentralized systems in organizations. Multiple choice question. Low requirement of personnel as one manager looks after all brands High degree of cooperation between brand managers Focus on long-term rather than short-term programs Concentrated managerial attention on brands

concentrated managerial attention on brands

A client pays an advertising agency a fee based on the costs of its work in addition to some agreed-on profit margin. This is known as the ______ method of compensation. Multiple choice question. incentive-based fixed-fee cost-plus value-based

cost-plus

Small advertising agencies that provide only creative services are known as ________________.

creative boutiques

The document that an advertising agency's creative department uses to guide the development of advertising ideas and concepts is known as the ____________________.

creative brief

Companies with separate manufacturing, research and development, sales, and marketing departments for various divisions, product lines, or businesses have a(n) _____ system. Multiple choice question. decentralized consolidated authoritarian centralized

decentralized

As marketers move deeper into the domain of interactive media, ______ agencies are being retained to develop Internet websites. Multiple choice question. collateral service direct-response digital sales promotion

digital

Which of the following specialize in the development and strategic use of various digital marketing tools such as website design? Multiple choice question. Sales promotion agencies Package design firms Public relations firms Digital agencies

digital agencies

Brandon Communications, an advertising agency, provides only database analytics and management services. Brandon Communications is a ______. Multiple choice question. sales promotion agency direct-marketing agency public relations firm creative boutique

direct-marketing agency

A disadvantage of using in-house agencies for developing promotional programs is that they ______. Multiple choice question. do not have any understanding of target markets do not provide advertisers with an objective point of view increase advertising and promotion costs increase the time spent on planning advertisements

do not provide advertisers with an objective point of view

Identify a characteristic of an advertising agency under a group organizational structure. Multiple choice question. Each group is comprised of individuals who specialize in one agency function. Each of the agency functions is set up as a separate department. Each group is supervised by an account executive. Each group remains constant in size and composition.

each group is supervised by an account executive

A factor that helps media organizations attract clients and their advertising agencies is ______. Multiple choice question. sufficient funds to pay for the promotion of products specialization in direct-marketing content their ability to develop contests and sweepstakes editorial or program content that appeals to consumers

editorial or program content that appeals to consumers

An advantage of using the commission system to compensate advertising agencies is that it ______. Multiple choice question. emphasizes nonprice factors such as the quality of the advertising developed for clients encourages them to recommend noncommissionable tools to clients discourages them from recommending high-priced media to their clients keeps their compensation independent of media costs

emphasizes nonprice factors such as the quality of the advertising developed for clients

True or false: Advertisers cannot use more than one agency of record to create advertisements for their products.

false

True or false: An organization cannot use an external advertising agency if it has an advertising department.

false

True or false: The administrative functions of an advertising agency exclude generating new business.

false

True or false: The production department of an advertising agency always produces finished advertisements.

false

In which method of compensation are the media commissions received by an agency credited against their fee? Multiple choice question. Cost-plus system Percentage charge method Fee-commission combination method Incentive-based system

fee-commisson combination method

An advertising agency that charges a basic monthly compensation for all of its services is using the ______ method. Multiple choice question. incentive-based negotiated commission percentage charge fixed-fee

fixed-fee

A(n) _____________ agency is an advertising agency that offers its clients a complete range of marketing, communications, and promotions services.

full-service

Speculative presentations made by advertising agencies to clients do not ______. Multiple choice question. guarantee the gain of the client account cost the agency any money require much time to prepare require much creative talent

guarantee the gain of the client account

An advertising agency that is established, owned, and operated by an advertiser is known as a(n) ___________________ agency.

in-house

he value-based compensation is a form of the ______ system of compensation. Multiple choice question. incentive-based fee-commission combination cost-plus fixed-fee

incentive-based

One significant trend that has occurred in agency compensation is the increased ______. Multiple choice question. advertising and promotion budgets across all marketing programs involvement of senior management in negotiation reliance on traditional media advertising

involvement of senior management in negotiation

What is an advantage of using integrated marketing communications services? Multiple choice question. It increases the business of firms that offer specialized services. It allows clients to easily coordinate all their marketing efforts. It eliminates the need for media in advertising. It eliminates political wrangling over budgets.

it allows clients to easily coordinate all their marketing efforts

An advantage of using a centralized organizational system in companies is that ______. Multiple choice question. more people in the advertising department take part in program decisions it results in a rapid response to the specific needs of brands and products it allows for more top management involvement in decision-making the advertising department can easily handle multiple product lines

it allows for more top management involvement in decision-making

Identify an advantage of using integrated marketing communications services. Multiple choice question. It creates a single image for the product and addresses everyone with one voice. It eliminates all disagreements related to budgets. It increases the business of firms that offer specialized services. It eliminates the need for public relations.

it created a single image for the product and addresses everyone with one voice

What is a disadvantage of using integrated marketing communications services? Multiple choice question. It increases the business of firms that offer specialized services. It cannot create a single image for a product or service. It increases the inconsistency in messages to clients' customers. It creates competition and conflict among agency subsidiaries.

it creates competition and conflict among agency subsidiaries

An advantage of using decentralized systems in organizations is that _____. Multiple choice question. it allows for more top management involvement in decision making brand managers develop an expert understanding of what advertising can and cannot do brand managers are highly cooperative with each other it facilitates rapid response to problems faced by brands

it facilitates rapid response to problems faced by brands

Identify an advantage of using the commission system to compensate advertising agencies. Multiple choice question. It avoids the tying of agency compensation to media costs. It discourages agencies from recommending high-priced media to clients. It is more flexible than it appears. It recommends the use of noncommissionable tools to clients.

it is more flexible than it appears

The drawings that show what an advertisement will look like and from which the final artwork will be produced are known as ________________.

layouts

Identify the operating and administrative functions of an advertising agency. (Check all that apply.) Multiple select question. Maintaining financial records Developing the headlines of advertisements Recruiting personnel Buying time and space in media

maintaining financial records and recruiting personnel

When advertising agencies try to gain new clients through direct solicitations, they ______. Multiple choice question. make cold calls to prospective clients work with charitable organizations pro bono to earn respect in the community pitch their services to prospective clients gained through referrals avoid those advertisers who have not put their accounts up for review

make cold calls to perspective clients

The advertising department of an organization must communicate with the ______ department to determine which product features are needed by customers. Multiple choice question. finance marketing research operations and logistics human resources

marketing research

Which of the following collateral services helps companies gather information for designing and evaluating their advertising and promotions programs? Multiple choice question. Package design Photography Marketing research Video production

marketing research

In an advertising agency, the ______ department analyzes, selects, and contracts for space or time in the media that will be used to deliver a client's advertising message. Multiple choice question. production media finance human resources

media

In the promotion of products and services, ______ provide an environment for a firm's marketing communications messages. Multiple choice question. media organizations interactive agencies collateral agencies clients

media organizations

Name the companies that specialize in the buying of radio and television time. Multiple choice question. Public relations firms Media specialist companies Creative boutiques Interactive agencies

media specialist companies

In an advertising agency, knowing what audiences the media reach, their rates, and how well they match a client's target market is the responsibility of ______. Multiple choice question. media specialists finance directors brand managers category managers

media specialists

In contrast to the traditional 15% commission that companies used to pay advertisers, most advertisers today work under a(n) ______ commission system in which commissions are based on a sliding scale. Multiple choice question. blind arbitration negotiated legislated

negotiated

In a(n) ______ system, advertising agencies are paid on the basis of a sliding scale that becomes lower as clients' media expenditures increase. Multiple choice question. cost-plus incentive-based negotiated commission percentage charge

negotiated commission

A financial audit of an advertising agency focuses on the ______. Multiple choice question. results achieved by an advertising program for a client agency's efforts in planning an advertising program number of personnel hours charged to an account implementation of a client's advertising program

number of personnel hours charged to an account

Which of the following sources can be used by advertising agencies to obtain referrals for new clients? (Check all that apply.) Multiple select question. Other advertising agencies The new clients themselves Media representatives Existing clients

other advertising agencies, media representatives, and existing clients

Identify a public relations activity that an advertising agency can use to gain clients. Multiple choice question. Making speculative presentations to clients Hiring new creative talent Participating in civic and social groups Using ad agency review consultants to pitch the agency to clients

participating in civic and social groups

Brooms Advertising purchases photography services from an external provider. When billing clients, Brooms adds a markup of 18 percent of costs to its initial costs. This is an example of the ______ method of compensation. Multiple choice question. fixed-fee cost-plus negotiated commission percentage charges

percentage charges

Organizations that provide collateral services contribute to a promotional process by ______. Multiple choice question. specializing in the creation, production, and placement of advertisements performing specialized functions for the other participants of a promotional process creating the products, services, or causes to be marketed providing the funds that pay for advertising and promotions

performing specialized functions for the other participants of a promotional process

A characteristic of an advertising agency with a departmental organizational structure is that each department ______. Multiple choice question. varies in size depending on clients' billings is comprised of individuals from different divisions performs different agency functions is headed by an account executive

performs different agency functions

Centralized organizations that develop their advertising programs in-house commonly employ media buying services to ______. Multiple choice question. place their advertisements develop point-of-purchase materials plan their advertising budgets add features to their products

place their advertisements

A characteristic of superagencies is that they _____. Multiple choice question. provide clients with integrated marketing communications services worldwide do not have access to a network of agencies around the world are more flexible and more responsive than smaller agencies pose a threat to advertisers' businesses by attacking their core competencies

provide clients with integrated marketing communications services worldwide

The role of clients in a promotional process is to ______. Multiple choice question. provide the monetary resources for advertising provide an environment for advertisements remain uninvolved in developing marketing plans create advertisements

provide the monetary resources for advertising

Notions Ads, an advertising agency, works with a few charitable organizations pro bono to earn respect in the community. In this case, Notions Ads is trying to gain clients through ______. Multiple choice question. sponsorship events public relations efforts solicitations referrals

public relations efforts

Advertising agencies often obtain new clients when existing clients recommend the agency to them. This method of gaining clients is known as ______. Multiple choice question. solicitations publicity stunts referrals presentations

referrals

In full-service advertising agencies, ______ departments collect, analyze, and interpret information that is useful in developing advertising for clients. Multiple choice question. research publicity merchandising finance

research

Identify a disadvantage of using a centralized advertising system. Multiple choice question. Response time to address specific problems with a product is high. Top management has a harder time participating in the promotions program. Centralized systems are only practical for very large companies. There is no central place to facilitate communication.

response time to address specific problems with a product is high

A disadvantage of using integrated marketing communications services is that it ______. Multiple choice question. creates multiple images for a single product or service results in political wrangling over budgets increases inconsistency in the messages delivered to clients' customers reduces the coordination of the client's marketing efforts

results in political wrangling over budgets

What must an advertising department do if an external agency is used to develop the promotions program of an organization? Multiple choice question. Keep marketing research results a secret from the agency. Review and approve the agency's plans. Compete with the agency for management resources. Deny the agency access to the top management.

review and approve the agency's plans

Which specialized service agencies are used to develop and administer programs such as contests and sampling programs? Multiple choice question. Advertisers Creative boutiques Sales promotion agencies Media specialists

sales promotion agencies

Zane Communications, an advertising agency, develops and manages sweepstakes, refunds, and rebates. However, it does not offer any other services. Zane Communications is an example of a(n) ______. Multiple choice question. sales promotion agency direct-marketing agency public relations firm interactive agency

sales promotion agency

what is the specialized marketing communication service that sales promotion agencies provide?

the develop programs such as contests and sweepstakes

Clients may change their advertising agencies when ______. Multiple choice question. the sales of the clients' products start increasing there is a general consensus on the creative strategies the agencies increase their integrated marketing capabilities there is a conflict in their compensation philosophies

there is a conflict in their compensation philosophies

what is the specialized marketing communication service that direct-response agencies provide?

they create and implement direct-marketing programs

what is the specialized marketing communication service that public relations firms provide?

they handle publicity for the products and services of a company

Identify a true statement about in-house agencies. Multiple choice question. They are operated solely by advertising agencies. They are set up by advertisers but not owned by them. They inflate advertising and promotion costs. They help companies control advertising activities.

they help companies control advertising activities

Why do companies have in-house agencies for their advertising needs? Multiple choice question. They provide a wider range of services than advertising agencies. They provide outside perspectives on customers. They provide more flexibility than advertising agencies. They help reduce the expenditure on advertising.

they help reduce the expenditure on advertising

In the context of presentations, how do advertising agencies gain clients? Multiple choice question. They pitch their services to clients on an unsolicited basis. They propose tentative communications campaigns for the clients. They make cold calls to clients and follow up on leads. They hire ad agency review consultants to pitch their services to clients.

they propose tentative communications campaigns for the clients

Why do companies use external advertising agencies? Multiple choice question. They allow companies complete control over the advertisement development. They are subject to the internal policies of the companies. They provide clients with the services of highly skilled individuals. They are cheaper to use than in-house agencies.

they provide clients with the services of highly skilled individuals

Identify a characteristic of direct-marketing agencies. Multiple choice question. They provide direct mail, research, and media services. They can only operate as subsidiaries of large agencies. They cannot offer database analytics and management as a service. They cannot be compensated on a fee basis.

they provide direct mail, research, and media services

Identify a true statement about category managers. Multiple choice question. They report to advertising managers. They report to brand managers. They supervise the management of only one brand. They supervise the management of an entire product category.

they supervise the management of an entire product category

Identify a true statement about creative boutiques. Multiple choice question. They work on a contract basis and not directly for full-service agencies. They turn out creative work quickly due to a lack of red tape. They cannot be compensated on a project or hourly fee basis. They have media, research, and account planning capabilities.

they turn out creative work quickly due to a lack of red tape

In an advertising agency, the department that coordinates all phases of production in order to ensure that advertisements are completed on time is called the ______ department. Multiple choice question. traffic finance printing merchandising

traffic

One disadvantage of using a centralized advertising system is that it may be difficult for advertising department staff to ______. Multiple choice question. create an efficient operation understand the overall marketing strategy for the brand facilitate communication with top management

understand the overall marketing strategy for the brand

In the ______ system of compensation, clients pay advertising agencies more than their basic costs if they achieve or exceed results as measured by agreed-upon metrics. Multiple choice question. percentage charge value-based fixed-fee negotiated commission

value-based

In the ______ system of compensation, clients pay advertising agencies more than their basic costs if they achieve or exceed results as measured by agreed-upon metrics. Multiple choice question. value-based fixed-fee negotiated commission percentage charge

value-based

Which of the following statements are true about the application of integrated marketing communications? Multiple choice question. Agency executives believe that integrated marketing is a threat to their current business. Most marketing executives of larger firms are turning over their IMC campaigns to agencies. Advertisers believe that IMC is important to the present success of their organizations. Advertisers and agency executives believe that IMC will soon lose its importance.

Advertisers believe that IMC is important to the present success of their organizations.

Identify the activities in which a public relations firm specializes. (Check all that apply.) Multiple select question. Preparing news releases for clients Generating publicity for a client Conducting lobbying and public affairs efforts Developing creative content for advertisements

Preparing news releases for clients, Generating publicity for a client, and Conducting lobbying and public affairs efforts

Identify a characteristic of the fee-commission combination method through which a client pays an advertising agency. Multiple choice question. The client pays the agency a fee based on the costs of its work plus an agreed upon percentage of the profits. The client makes up the difference if the commissions are less than the agreed-on fee. The agency adds a markup to various services it purchases from outside providers. The agency can never charge a fee over and above the commissions received.

The client makes up the difference if the commissions are less than the agreed-on fee.

Under a cost-plus method of compensation, which of the following determine the amount an agency bills a client? (Check all that apply.) Multiple select question. usage royalties a markup for profits an allocation for overhead personnel time

a markup for profits, an allocation for overhead, and personnel time

Advertising agencies establish contact with new clients, write letters to them, and follow up on leads. This method of gaining clients refers to ______. Multiple choice question. solicitations publicity events referrals presentations

solicitations

A sequence of frames or panels that depicts a television commercial in still form is known as a ________________.

storyboard

Large advertising agencies merge with or acquire other agencies and support systems to form large advertising organizations called ________________.

superagencies

An advertising manager is responsible for ______. Multiple choice question. supervising the activities of the advertising department keeping the advertising department isolated from other marketing departments recruiting and training employees in an organization managing the sales department in an organization

supervising the activities of the advertising department

Media specialist companies are primarily involved in the buying of media for ______ advertising. Multiple choice question. television and radio television and digital print and digital digital and radio

television and digital