TEST BANK for Advertising and Sales Promotion, 1st Edition. Ken Kaser

Advertising and Sales Promotion, 1e Ken Kaser (Test Bank All Chapters, 100% Original Verified, A+ Grade) Chapter 1 1. Advertising has been around since only the early 1800s. a. True *b. False 2. Advertisements in the 1950s typically focused on families and new technological advances. *a. True b. False

3. Beginning in the 1950s, television became the dominant form of advertising because commercials could be broadcast with sight, sound, and motion. *a. True b. False

4. The Internet has not yet become an important advertising medium for most businesses. a. True *b. False

5. One reason why print advertising is widely used today is because it does not negatively impact the environment. a. True *b. False

6. Businesses that use green marketing have an advantage when introducing their product or service in the marketplace. *a. True b. False

7. It is unethical for a business to advertise its social responsibility efforts; such efforts should always be conducted behind the scenes. a. True *b. False

8. Advertising is highly influenced by consumer needs and purchase patterns. *a. True b. False

Chapter 1 9. Understanding consumer motivation is the best way to learn how to increase buyer incentive through effective advertising. *a. True b. False

10. Blogs are a poor source of consumer information about products and services. a. True *b. False

11. All a successful ad requires is a strong understanding of the product or service being promoted. a. True *b. False

12. Brand advertising and product advertising sometimes overlap. *a. True b. False

13. Corporate advertising does not ask consumers to take a specific action, such as to buy a product. *a. True b. False

14. Account planners communicate the client’s objectives to other team members at the advertising agency to ensure that strategies are carried out on schedule and within budget. a. True *b. False

15. Outsourcing occurs when a small advertising agency assigns individual tasks to other companies that specialize in planning, designing, and creating advertisements. *a. True b. False

16. During the 1920s, advertising was typically a. no-nonsense and focused on practical goods *b. glamorous and promoted consumption during prosperous times

Chapter 1 c. oriented primarily toward families and children d. highly visual and included little text

17. Cable television impacted advertising because a. it forced advertising agencies to produce commercials that ran for only 30 or 60 seconds b. it strengthened the appeal of radio as an advertising medium *c. it allowed advertisers to narrow the demographics of their intended audiences d. all of the above are correct

18. When did Internet advertising come onto the scene? a. the 1970s b. the 1980s *c. the 1990s d. the 2000s

19. Businesses that use green business practices *a. are often favored by customers b. find ways to turn pollution into “green” cash c. are generally less profitable than companies that underestimate environmental influences d. have been losing market share for years

20. The MAIN focus of trade associations is a. shaping public opinion on various issues *b. collaboration between companies to develop industry standards c. producing advertising to influence public sentiment d. lobbying legislators to support or oppose particular legislation

21. When Monica visits Poppy’s Pizza, she gives her order to Martin, the server. Poppy makes the pizza in the kitchen and brings it to Monica’s table.

After Monica has enjoyed her meal, she pays the cash register clerk, Amber.

Who is the consumer in this scenario? a. Poppy b. Martin c. Amber *d. Monica

22. Which of the following terms refers to what a customer wants from a product. *a. direction

Chapter 1 b. passion c. intensity d. desire

23. Which of the following is an example of corporate advertising? *a. GE runs an advertisement about capturing and using wind energy through the use of windmills. b. Hyundai runs an advertisement emphasizing the low price and durability of its automobiles. c. Nike runs a series of advertisements featuring its “Just Do It” slogan to build a positive brand image. d. All of the above are examples of corporate advertising.

24. The PRIMARY role of an advertising agency is to a. reaffirm the brand image of its clients b. build ad campaigns to increase sales of a company’s products *c. analyze a company’s goals and help it achieve those goals through well-planned advertising strategies d. attract new customers and retain current customers for its clients

25. The words used in an advertisement are the responsibility of the a. editor b. media planner c. creative director *d. copywriter

26. In 1848, it was possible to print 10,000 sheets per hour on a printing press. If an advertiser wanted to print 100,000 sheets, how many hours would it take?

Correct Answer(s): a. 10

27. In 1880, total advertising dollars spent in the United States was $200 million. By 1920, that figure had grown to $3 billion. What percentage increase is that?

Correct Answer(s): a. 1400%

28. A popular radio program in the 1950s had an audience of 24 million listeners a week, airing on 1,600 radio stations. On average, how many people were listening on each of those radio stations?

Correct Answer(s):

Chapter 1 a. 15,000

29. Tipton Industries’ green marketing campaign has resulted in a 4 percent increase in sales over last year. If sales totaled $500,000 last year, what are sales this year?

Correct Answer(s): a. $520,000

30. A company spent its advertising dollars last year as indicated below: product advertising: $350,000 brand advertising: $250,000 corporate advertising: $200,000 What percentage of total advertising dollars did the company spend on corporate advertising?

Correct Answer(s): a. 25%

31. A paid form of communication intended to inform, persuade, and remind an audience to take some kind of action is called _____.

Correct Answer(s): a. advertising

32. New _____ techniques developed in the 1880s used assembly lines to create standardized products in large quantities, prompting manufacturers to develop brand names to help consumers clearly identify their products.

Correct Answer(s): a. mass production

33. A(n) _____ is a lengthy paid advertisement that showcases the benefits of a product.

Correct Answer(s): a. infomercial

34. The use of advertising to support and improve the environment is known as _____.

Correct Answer(s): a. green marketing

Chapter 1 35. Industry trade groups, often called _____, are founded and funded by businesses operating in a specific industry.

Correct Answer(s): a. trade associations

36. The end user of a product or service is a(n) _____.

Correct Answer(s): a. consumer

37. A(n) _____ is the combination of unique qualities of a company, product, or product line.

Correct Answer(s): a. brand

38. The _____ is the client that needs creative messages and advertising campaigns to reach target markets.

Correct Answer(s): a. advertiser

39. The production department at an advertising agency is led by a(n) _____, who manages everything that happens after an advertisement is developed.

Correct Answer(s): a. producer

40. _____ are consultants to advertising agencies and are used to identify what makes a company unique in a market flooded with consumer choices.

Correct Answer(s): a. Brand specialists

41. When were advertising agencies founded? How were they first used?

Correct Answer: Advertising agencies were founded in the late 19th century. They were first used to sell advertising space in local newspapers and a limited number of magazines.

42. Identify four inventions that have influenced advertising.

Correct Answer: Four inventions that have influenced advertising include the printing press,

Chapter 1 radio, television, and the Internet.

43. What is social responsibility?

Correct Answer: Social responsibility is the principle that businesses should contribute to the welfare of society.

44. Define the term consumer behavior.

Correct Answer: Consumer behavior describes how and why people make purchase decisions.

45. Name the three common types of advertising.

Correct Answer: The three common types of advertising are product advertising, brand advertising, and corporate advertising.

46. What is a media plan?

Correct Answer: A media plan outlines when and where advertisements will run and how often.

47. Describe the early origins of advertising.

Correct Answer: Advertising has been around practically since the beginning of time.

Advertisements appeared as inscriptions on Egyptian tombs around 3000 B.C. The Greeks engraved theater advertisements in stone around 500 B.C. The ancient ruins of cities like Pompeii and Rome showed evidence of message boards on the lime-whitened walls of buildings displaying political and commercial messages for the public to read. In many parts of South America, Asia, and Africa, stone carvings or paintings displaying commercial advertisements on old walls have been discovered.

48. What are negative campaign advertisements? What is the impact of such advertisements on the political process?

Correct Answer: Negative campaign advertisements involve criticism of a candidate, a policy position, or past performance. Some of the advertisements question the character of political candidates. Exposure to advertisements does influence public perceptions of the candidates. However, it is unclear as to whether negative political advertising is actually effective. Some critics of negative ads believe that they actually discourage people from going to the polls to vote and diminish confidence in the political system.

Chapter 1 49. Explain the various ways technology has given consumers greater control over how they get information about products and product brands.

Correct Answer: The latest technology has given consumers greater control over how they get information about products and product brands. For example, rather than relying on advertisements, consumers can visit websites to view product information or make purchases. Consumers are in control of the disbursement of product information when they use blogs, which are websites frequented by individuals with common interests. The facts, opinions, and personal experiences posted by individuals on blogs are emerging as new, sophisticated sources of product and brand information. Many consumers choose to receive targeted advertisements through text messaging.

Consumers also exert control over the messages they receive by using digital video recorders (DVRs) and controllers that have ad-skipping capabilities.

Because consumers now can easily ignore advertisements, advertisers must adapt to consumer control by using more entertaining and informative advertising. To counter the effects of DVRs, advertisers are now running advertising messages along the bottom of the screen during television programs. As new technology emerges, advertisers will need to continue to find new ways to get their messages to consumers.

50. What is a boutique advertising agency? Describe the objective of a boutique advertising agency and briefly explain how it operates.

Correct Answer: A boutique advertising agency is a small, specialized advertising company that outsources many of its services. The primary objective of a boutique advertising agency is to create brand identification for a product or service through the use of nontraditional creativity. Boutique advertising agencies typically serve one particular market exclusively. They focus on what they are good at—the creative aspect of advertising—and then outsource the other work, such as media planning and buying, to those with more expertise. By doing so, they are able to produce the best product at the most reasonable price.

Chapter 2 51. The product and service preferences of customers rarely change, making it relatively easy for businesses to understand what customers want. a. True *b. False

52. After people have a sense of physical and economic security, their attention turns to social needs. *a. True b. False

53. Good marketing and advertising create needs. a. True *b. False

54. All purchasing decisions require the same decision-making skills. a. True *b. False

55. Ways to evaluate alternative solutions include summarizing information, comparing the benefits of each choice, and ranking alternatives. *a. True b. False

56. All low-cost purchases involve routine decision making. a. True *b. False

57. New purchases tend to be infrequent. *a. True b. False

58. Repeat purchases are usually associated with low-cost products and services that involve low risk. *a. True b. False

59. When customers have not had a past experience with a product or service, there is usually a lower level of involvement in making the buying decision.

Chapter 2 a. True *b. False

60. Advertising for each of the various product categories (convenience, shopping, specialty, and unsought) is different because each one has a different target market. *a. True b. False

61. Advertising campaigns for specialty products must emphasize why consumers believe the product or service is unique. *a. True b. False

62. Emotional advertising spends more time describing product features than creating a special experience for the consumer. a. True *b. False

63. Rational buying motives apply only to very expensive purchases. a. True *b. False

64. Your social environment consists of other individuals or groups with whom you interact regularly. *a. True b. False

65. Promotional strategies can be used to match demand with supply. *a. True b. False

66. Which of the following is NOT one of the five areas of personal needs identified by Abraham Maslow? a. social b. security *c. wealth d. esteem

Chapter 2 67. Which of the following would be properly categorized as a capital resource? a. a shipment of lumber *b. a new delivery truck c. company employees d. all of the above

68. The first step in the consumer decision-making process is to a. evaluate alternatives b. search for information *c. recognize the problem d. compare prices

69. When you purchase your favorite candy bar at a convenience store, you are probably using which type of decision making? *a. routine b. narrow c. limited d. general

70. Limited decision making is often involved in _____ purchases. a. new *b. modified c. repeat d. original

71. Which of the following people is likely to be MOST involved in the buying decision described? a. Terri needs a new cell phone, but she has very little personal interest in the latest technology. b. Chris is thirsty and stops by the drug store to buy a bottle of his favorite soda. *c. Martina is picking out her wedding dress, as well as dresses for her bridesmaids. d. Denzell is shopping for a new toaster because his old one finally stopped working.

72. As he was paying for his groceries, Alex grabbed a celebrity gossip magazine that was on the rack at the checkout aisle. The magazine is an example of a(n) a. shopping product b. unsought product

Chapter 2 c. staple product *d. impulse product

73. Grandma always buys Martha White brand flour to do her baking. She wouldn’t think of ever trying a different brand of flour. In this case, Grandma’s purchasing decision is driven by _____ motives. *a. patronage b. rational c. environmental d. logical

74. The set of emotions, traits, and behaviors that define you is called your a. culture *b. personality c. lifestyle d. self-concept

75. When advertisers target messages to specific groups such as African Americans and Hispanic Americans, they are showing awareness of the importance of ____ on buying decisions. *a. ethnicity b. lifestyle c. values d. gender

76. Danielle wants a new iPad. Her parents told her that they will contribute $200 toward the purchase if she saves the rest herself. If an iPad costs $500 and Danielle is able to save $15 per week, how many weeks will it take for her to save her share of the cost?

Correct Answer(s): a. 20

77. Midori is shopping for a new washing machine. She has found one model that costs $450. A second model costs 7 percent less than the first model.

How much does the second model cost?

Correct Answer(s): a. $418.50

78. Before he redeemed his coupons, Jason’s grocery bill came to $140. After his coupons were applied, the bill was $131.60. Jason saved ___ percent on his groceries this week.

Chapter 2 Correct Answer(s): a. 6

79. Funeral planning is an unsought purchase for most people. But Clyde has purchased a preplanned funeral arrangement service. He will pay $150 per month for five years to purchase the service. What is the total cost of the service Clyde has purchased?

Correct Answer(s): a. $9,000

80. Dilton wants to be logical about his computer purchase. One system he is considering costs $500 plus an additional $80 per year for an extended warranty. Another system costs $790 but comes with a lifetime warranty at no extra cost. If Dilton expects to use the computer for four years and he wants to take the least expensive option, how much will he spend?

Correct Answer(s): a. $790

81. A(n) _____ is anything you require for survival.

Correct Answer(s): a. need

82. Personal needs and wants are never ending, but the resources used to produce goods and services are limited. This is the concept of _____.

Correct Answer(s): a. scarcity

83. _____ decision-making is used for frequently purchased, low-cost products that require little thought.

Correct Answer(s): a. Routine

84. Someone purchasing an automobile or a new home is likely using _____ decision making.

Correct Answer(s): a. extensive

85. A(n) _____ purchase occurs when consumers must make new decisions about a product or service that they have previously purchased.

Chapter 2 Correct Answer(s): a. modified

86. A(n) _____ product is purchased regularly without much planning.

Correct Answer(s): a. convenience

87. Vacation destinations, restaurants, luxury automobiles, and designer clothing are all examples of _____ products.

Correct Answer(s): a. specialty

88. The incentive or reason for doing something is called _____.

Correct Answer(s): a. motivation

89. Purchases that are based on facts or logic are influenced by _____ motives.

Correct Answer(s): a. rational

90. _____ is any form of communication that a company uses to create a favorable image of its products or services.

Correct Answer(s): a. Promotion

91. Define the term consumer behavior.

Correct Answer: Consumer behavior describes how consumers make buying decisions, choose among alternatives, and use products.

92. List the five steps in the consumer decision-making process.

Correct Answer: The five steps are (1) recognize the problem, (2) search for information, (3) evaluate alternatives, (4) make the purchase, and (5) evaluate the purchase.

93. Identify the three types of consumer purchases. Which is the most common

Chapter 2 type of purchase?

Correct Answer: The three types of consumer purchases are new purchases, modified purchases, and repeat purchases. Repeat purchases are most common.

94. Name the four basic categories of consumer products.

Correct Answer: The four basic categories of consumer products are convenience products, shopping products, specialty products, and unsought products.

95. What are buying motives? Identify the three categories of buying motives that influence consumer behavior.

Correct Answer: Buying motives are the driving forces that cause consumers to buy products and services. The three categories of buying motives are emotional motives, rational motives, and patronage motives.

96. What is an advertising campaign?

Correct Answer: An advertising campaign is a series of related advertisements with a common theme or idea that focuses on a specific product, service, brand, or message.

97. What is the final step in the consumer decision-making process? Describe it and explain how and why businesses are helping consumers with this step.

Correct Answer: The final step in the consumer decision-making process is the post-purchase evaluation. During this stage, the consumer decides whether the purchase met his or her expectations and satisfied the need. Marketers are paying more attention to post-purchase satisfaction. Many businesses now offer money-back guarantees to customers who are not fully satisfied with a product. They are also making an effort to communicate with customers after a sale to reinforce the buying decision and to ensure satisfaction.

Businesses that follow up with customers can learn how to improve customer relations and win repeat business.

98. Describe the factors that influence consumer involvement in buying decisions.

Correct Answer: When consumers have had a past experience with a product or service, there tends to be a lower level of involvement in making the buying decision.

Consumers’ specific interests can also impact the level of involvement in buying decisions. For example, consumers who are interested in a particular kind of product will spend more time shopping before purchasing items in this product category.

Chapter 2 When consumers perceive risk associated with a purchase, they will become more involved in the buying process. For example, high-priced items can result in financial risk. Thus, a higher level of consumer involvement is associated with higher-priced items.

Circumstances also can influence the level of consumer involvement in making a purchase. A consumer may put more thought into buying a product or service if it is for a special occasion.

Finally, higher consumer involvement is often associated with purchases that enhance self-image. If a consumer wants to make a statement or reinforce his or her image by purchasing a certain product, the buying decision becomes more relevant. Therefore, the consumer spends more time making the decision.

99. What is an unsought product? How are unsought products marketed and advertised?

Correct Answer: Unsought products are not actively sought out by consumers. This could be because the consumer is unaware of the product or service. Advertising is used to increase awareness of new products. The advertising must communicate how the new product will satisfy consumer needs and where it can be purchased.

Without awareness, there will be no demand, and the product will not succeed.

Marketing unsought products or services often requires personal selling and persuasive advertising. Salespeople seek out potential customers.

Advertisements may make an emotional claim to convince consumers of the need for this type of product or service.

99. What is an unsought product? How are unsought products marketed and advertised?

Correct Answer: Unsought products are not actively sought out by consumers. This could be because the consumer is unaware of the product or service. Advertising is used to increase awareness of new products. The advertising must communicate how the new product will satisfy consumer needs and where it can be purchased.

Without awareness, there will be no demand, and the product will not succeed.

Marketing unsought products or services often requires personal selling and persuasive advertising. Salespeople seek out potential customers.

Advertisements may make an emotional claim to convince consumers of the need for this type of product or service.

Chapter 3 101. Marketing is defined as advertising and selling to an appropriate audience. a. True *b. False

102. Marketing has always been viewed as an important business function. a. True *b. False

103. Market planning involves identifying target markets and developing an effective marketing strategy and marketing mix that will produce a satisfying exchange relationship. *a. True b. False

104. Selling is direct, personal communication with prospective customers that involves assessing needs, explaining how the business’s products and services can satisfy those needs, and following up to ensure satisfaction. *a. True b. False

105. A target market is a specific group of consumers to whom the business wants to sell its products and services. *a. True b. False

106. In selecting a target market, it’s important to consider factors such as geographical location, income level, and the specific needs or wants the product or service will satisfy. *a. True b. False

107. In an effective target market, needs and wants may vary greatly, but people can afford the product or service and there is adequate data available to create an effective marketing mix. a. True *b. False

108. In general, mass marketing is easier and more effective for smaller or more specialized businesses.

Chapter 3 a. True *b. False

109. When market segmentation is used, a customer profile can be helpful in building customer relationships and customer loyalty. *a. True b. False

110. Demographics such as consumer age, gender, and race are no longer considered to be important in determining consumer needs and wants. a. True *b. False

111. Geographic segmentation and psychographic segmentation are effective and commonly used examples of market segmentation. *a. True b. False

112. Psychographics focus attention on the way people spend their time and the motives behind their actions. *a. True b. False

113. The first important step in identifying an effective market segment is choosing a specific market or product category to study. *a. True b. False

114. Meaningful subgroups are based on identifiable and similar characteristics and needs, such as education level, occupation, and age. *a. True b. False

115. Market potential is based primarily on the size and income level of the market segment being studied. a. True *b. False

Chapter 3 116. Which of the following statements is NOT true about marketing? a. Marketing involves all of the processes used to identify, create, and maintain exchange relationships that satisfy individuals and organizations. b. The marketing concept focuses on identifying and satisfying the needs of customers. *c. Marketing has been recognized as an important business function since the early 1900s. d. The marketing concept becomes increasingly important in the face of competition and as the standard of living improves.

117. Which of the following is NOT a necessary marketing function? *a. production of a product with mass appeal b. appropriate pricing c. promotion and/or selling d. distribution

118. An advertisement describing the environmental benefits of driving a new hybrid car versus driving an older, gas-engine car, is an example of a. product and service management b. selling *c. promotion d. marketing-information management

119. Which of the following most accurately describes a target market? a. a group of consumers who have the income necessary to buy a company’s products or services *b. a group of consumers to whom the business wants to sell its products or services c. a group of consumers of similar age, gender, ethnicity and location d. a group of consumers with the greatest desire to buy a company’s products or services

120. In choosing a target market for a new, upscale restaurant featuring primarily pizza and sandwiches, which of these factors is LEAST likely to be an important consideration? a. Where do potential customers live? b. How much income do potential customers have? c. What price are potential customers willing to pay for this product and service? *d. What do potential customers do for a living?

121. Which of the following services or products would most likely be a candidate for a mass marketing strategy?

Chapter 3 a. in-home health care *b. cleaning and household repair services c. pet sitting d. gardening and landscaping

122. Which of the following products or services would be the most likely candidate for market segmentation? *a. automobiles b. soft drinks c. paper products d. computers

123. Which of the following is NOT an aspect of demographic segmentation? a. education level b. occupation *c. interests d. marital status

124. Which of the following is NOT an aspect of psychographic segmentation? a. attitudes *b. age c. lifestyle d. opinions

125. Which of the following factors determine whether a market segment has strong potential? a. The market segment is measurable and accessible. b. The market segment has many potential customers and the potential for growth. c. neither a or b *d. both a or b

126. A local electronics store has rolled back the price on its best-selling HDTV. The old price was $400. The new price is 6 percent less. What is the new price?

Correct Answer(s): a. $376

127. It has been estimated that each child in the United States is exposed to 40,000 television commercials each year. How many is that each day, on average? (Round to the nearest whole number.)

Chapter 3 Correct Answer(s): a. 110

128. A tablet computer costs $500. Creative marketing accounts for 3 percent of the price being charged for the tablet. How much money was spent to market the tablet?

Correct Answer(s): a. $15

129. A tablet computer costs $500. Creative marketing accounts for 3 percent of the price being charged for the tablet. What would the price of the tablet be if marketing costs were not applied to the final price?

Correct Answer(s): a. $485

130. Data indicate that total sales of pizza in Brownsville are $2 million each year. If Topper’s Pizza has captured 20 percent of the market, what is the amount of Topper’s annual sales?

Correct Answer(s): a. $400,000

131. The marketing concept focuses on identifying customer needs and wants; applying the concept to planning, production, _____, distribution, and promotion; and satisfying customer needs and wants while operating profitably.

Correct Answer(s): a. pricing

132. The _____is a combination of four marketing elements--product, price, distribution, and promotion.

Correct Answer(s): a. marketing mix

133. Budgeting resources to carry out marketing strategies and providing financial assistance to customers to enable them to buy are aspects of marketing known as _____.

Correct Answer(s): a. financing

134. A _____ market is a smaller, narrowly defined target market with a unique

Chapter 3 set of needs.

Correct Answer(s): a. niche

135. A(n) _____ is a description of the characteristics exhibited by an individual who is likely to buy a business’s products or services.

Correct Answer(s): a. customer profile

136. A company uses _____ in an attempt to appeal to a large, general group of consumers.

Correct Answer(s): a. mass marketing

137. One type of market segmentation is _____segmentation, in which consumers may be classified as first-time users, light users, or heavy users.

Correct Answer(s): a. product usage

138. Product brand and performance, as well as lifestyles and attitudes, are critical issues when considering _____segmentation.

Correct Answer(s): a. psychographic

139. Market potential is based on _____.

Correct Answer(s): a. profitability

140. _____ marketing defines consumers by age but also considers their social and economic backgrounds and lifestyles.

Correct Answer(s): a. Generational

141. Define the term marketing.

Correct Answer: Marketing involves all of the processes used to identify, create, and maintain exchange relationships that satisfy individuals and organizations.

Chapter 3 142. Name five basic questions to answer when selecting a target market.

Correct Answer: Answers will vary, but should include any five of the following eight questions: Are the target customers male or female? How old are the target market customers? Where do potential customers live? What do potential customers do for a living? How much money do they earn? What other aspects of their lives (lifestyles) matter? What needs or wants will the product or service satisfy? What price are they willing to pay for the product or service?

143. What are three common strategies used by businesses to reach and maintain one or more target markets?

Correct Answer: Three common strategies include the following: (1) an undifferentiated strategy, in which the target market is viewed as one big market, leading to the use of one marketing mix; (2) a concentrated strategy, which is used to establish and/or maintain niche markets; and (3) a multiple-segment strategy, used when a business chooses to serve two or more target markets.

144. Name a product, group of products, or a service in which mass marketing would likely be most appropriate and explain why.

Correct Answer: Answers will vary, but products or services named as suitable for mass marketing must satisfy the condition of appealing to a large, general group of consumers.

145. List five types of market segmentation based on customer profile information.

Correct Answer: Five types of market segmentation are geographic segmentation, demographic segmentation, psychographic segmentation, product usage segmentation, and benefit segmentation.

146. What are the five steps in identifying market segments?

Correct Answer: 1. Select a market or product category to study.

2. Choose a basis for segmenting the market.

3. Collect and analyze data.

4. Identify market segments.

5. Select the market segments with the most potential.

147. Explain the marketing concept. Include a basic definition of marketing, explain why the marketing concept has become more important within the last 60 years or so, and describe three steps to successful implementation of

Chapter 3 the marketing concept.

Correct Answer: Marketing is the process of identifying, creating, and maintaining exchange relationships that satisfy individuals and organizations. The marketing concept has become more important as consumers’ standard of living and income have increased, thus increasing demand for new and improved products. At the same time, more improved products and services were made available, so competition for customers increased.

Three steps toward the successful implementation of the marketing concept are: (1) focusing on customer needs and wants to develop and market products or services that are considered better than competitors’ products or services; (2) applying the marketing concept to the planning, production, pricing, distribution, and promotion of products and services; and (3) satisfying customer needs and wants while operating profitably.

148. Compare and contrast promotion and selling. How can pricing be seen as an important part of promotion?

Correct Answer: Selling is simply one part of promotion. Promotion includes any type of communication of information about products and services to potential customers. It can include a blend of advertising, sales promotions, publicity, and personal selling. Selling is direct, personal communication with prospective customers that involves assessing needs, explaining how the business’s products and services can satisfy those needs, and following up to ensure satisfaction. Well-qualified salespeople are good listeners and problem solvers.

Pricing is important to establish and communicate the value of products and services to customers. Customers often relate the price to the satisfaction they expect to receive from a product or service. Pricing should reflect consumer demand and expectations, which are influenced by many factors, including quality, perception, promotion, trends, and the economy.

149. Describe demographic segmentation and psychographic segmentation.

Using an example, explain how these two common types of market segmentation may overlap in practice.

Correct Answer: Demographics include consumer characteristics such as age, gender, race, marital status, income, education level, and occupation. Psychographics describe consumers based on their interests, attitudes, opinions, and lifestyles. In practice, there may be a lot of overlap, since certain demographic groups will tend to have many psychographic similarities.

Examples given will vary but could include Generation Y (young adults), which includes more single consumers just beginning careers, with lifestyles and attitudes that reflect a relative freedom from responsibilities. Generation X, as another example, tends to include more married consumers and parents, whose lifestyles, opinions, and attitudes will reflect on their commitments to children, parents, careers, etc.

Chapter 3 150. Explain how market potential is analyzed. Include at least four criteria that must be met when determining whether a market segment has strong potential for success.

Correct Answer: Answers will vary, but should include four of the five following criteria: (1) The market segment must be measurable. Geographic, demographic, and psychographic data must be available for analysis. (2) The business must be capable of producing a product or service at a price that meets customers’ wants and needs. (3) The market segment must have many potential customers and the potential for growth. (4) The market segment must be accessible through specific advertising media, such as magazines or websites, that the target audience likes to use. (5) The business can serve the market segment more effectively than competitors can.

Chapter 4 151. It is important to screen new product ideas for potential legal or safety issues, as well as for sales and profit potential, before preparing a business analysis. *a. True b. False

152. Typically, the most difficult stage of new product planning is generating ideas. *a. True b. False

153. After a new product has been developed and tested, the next step is to develop a marketing strategy. a. True *b. False

154. A small sample of moisturizer, tucked into a bar of soap, is an example of an extended product. *a. True b. False

155. A brand is the combination of the product, the package, and the label. a. True *b. False

156. Money spent on promotion and advertising decreases during the growth stage of a new product. a. True *b. False

157. The main goals during the maturity stage of a product are to maintain market share and extend the product life cycle. *a. True b. False

158. When a product is in the decline stage, a business may decide to broaden the market by adding new features or by finding new uses for the product. *a. True b. False

Chapter 4 159. The availability of flu shots at pharmacies, walk-in clinics, and at schools, as well as at doctors’ offices, is an example of intensive distribution, a strategy often used during the maturity stage of the product life cycle. *a. True b. False

160. Some businesses, such as BMW automobiles, use a strategy of pulling products from the market before they reach the maturity stage, which is characterized by a decreasing sales rate and a drop in profits. *a. True b. False

161. Return on investment (ROI) is a pricing objective that allows a business to compare its performance against the industry’s average performance. *a. True b. False

162. Sometimes a business may focus on increasing its sales or market share instead of maximizing profits. *a. True b. False

163. Price skimming involves setting a low price for new products to gain a larger market share rapidly. a. True *b. False

164. For many products, a nonprice competition strategy is usually more profitable than a price competition strategy by which products are sold at lower prices. *a. True b. False

165. If a product is priced above the equilibrium price, more people will buy it, meaning supply exceeds demand. a. True *b. False

Chapter 4 166. All of the following stages are typically completed before developing a marketing strategy, EXCEPT a. screening ideas for sales and profit potential *b. developing and testing the product c. preparing a business analysis d. screening ideas for production costs, time, and safety issues

167. Competition for a new product is usually considered during which stage of new product planning? a. development of the marketing strategy b. development and testing of the new product *c. screening of ideas d. preparation of a business analysis

168. Which of the following is an example of an enhanced product? *a. a hybrid car b. a cotton kitchen towel c. A new TV that comes with a free ten-year warranty d. scented shampoo

169. A product line that includes sheets, comforters, and bath towels is an example of a. a brand b. product line depth c. product line depth and width *d. product line width

170. Reducing inventory by selling the product at lower prices through secondary markets is a strategy often used during the _____ stage of the product life cycle. a. planned obsolescence b. maturity *c. decline d. growth

171. Recycled paper products are beginning to appear in new forms, such as Post-it notes of various colors. These products are being heavily advertised and sales are increasing. This would tend to indicate that recycled paper products are in the _____stage. a. maturity *b. growth c. decline

Chapter 4 d. introduction

172. Which of these is NOT an example of technical obsolescence? *a. a 12-year-old car is not repaired because parts can no longer be found b. a VCR is replaced by a Blu-ray player c. a more energy-efficient washing machine replaces an older version d. a working flip-top cell phone is discarded in favor of a smartphone

173. All of the following are potential ways to maximize profits, EXCEPT a. using prestige pricing *b. maximizing sales by selling products below profit c. providing excellent customer service d. building strong customer relationships

174. Which of the following factors is most relevant when using supply and demand to determine price? a. whether to use price or nonprice competition *b. whether demand for the product is elastic or inelastic c. whether consumers are willing to pay a premium for a high-quality product d. whether most consumers will be purchasing the product on credit

175. In which of these situations might penetration pricing be a useful strategy? a. Demand for a new product is determined to be very inelastic. b. A new upscale perfume is introduced. c. Advertising has already created a strong demand for a product. *d. A new soft drink brand is introduced.

176. Shine! household cleaner has been used to clean countertops for years.

But last year, Shine! began promoting its product as a window cleaner as well. As a result, sales have risen 25 percent this year. If last year’s sales were $3.5 million, what are sales this year?

Correct Answer(s): a. $4,375,000

177. The economy size bottle of Silky Shampoo contains 15 ounces of product.

The jumbo bottle contains 40 percent more. How many ounces of shampoo is in the jumbo bottle?

Correct Answer(s): a. 21 ounces

Chapter 4 178. Thanks to the introduction of eco-friendly packaging, a company has cut its production costs from $250,000 per month to $230,000 per month. What percentage reduction is that?

Correct Answer(s): a. 8 percent

179. At its peak, Gizmo -- a talking toy -- sold 50,000 units per month.

Now that the toy is in its decline stage, however, it sells 95 percent fewer units per month. How many units are sold each month?

Correct Answer(s): a. 2,500

180. If a business invests $50,000 in its product and wants a 15 percent ROI, it will need to price its product so that it earns what total profit?

Correct Answer(s): a. $7,500

181. When generating ideas for a new product or service, one good source of information is _____ because they often get ideas through their interactions with customers.

Correct Answer(s): a. salespeople

182. The business analysis is used to determine the size of the market, costs of production and marketing, and sales and _____ projections.

Correct Answer(s): a. profit

183. The two main functions of a product package are protection and _____.

Correct Answer(s): a. promotion

184. A _____brand is a well-known brand owned by one company that is sold for use by another company.

Correct Answer(s): a. licensed

Chapter 4 185. Two goals during the growth stage of a new product include increasing sales and gaining consumer _____.

Correct Answer(s): a. preference

186. Generally, during the _____ stage of the product life cycle, the price of a product is high in order to recover research and development costs.

Correct Answer(s): a. introduction

187. Advertising and promotion emphasize product differentiation and try to build brand loyalty during the _____ stage of the product life cycle.

Correct Answer(s): a. maturity

188. To create a high-quality image of a product, businesses may use _____ pricing for items such as furniture, designer clothing, or perfume.

Correct Answer(s): a. prestige

189. The _____ competition strategy is used to distinguish a product from competing products based on design, quality, and workmanship.

Correct Answer(s): a. nonprice

190. The use of a _____ pricing strategy for a new product may result in lower profits for a time, but it discourages competition.

Correct Answer(s): a. penetration

191. List the six stages of new product development.

Correct Answer: The six stages of new product development are (1) generate ideas, (2) screen ideas, (3) prepare a business analysis, (4) develop a marketing strategy, (5) develop and test the product, and (6) market the product.

192. Define the term product line.

Correct Answer:

Chapter 4 A product line is a group of closely related products with slight variations developed by the same business.

193. Why would intensive distribution typically be inappropriate during the introduction stage of a new product?

Correct Answer: Intensive distribution is usually inappropriate when introducing a new product, because consumers typically have low awareness of the product and sales will not be high at first. With relatively high promotion costs and low-sale projections, intensive distribution is too expensive.

194. The maturity stage is difficult for many businesses. Give one strategy that PepsiCo used to compete effectively in the soft drink business.

Correct Answer: Answers will vary, but may include (1) PepsiCo entered into agreements with restaurants, schools, and the NFL to distribute Pepsi products exclusively, (2) Pepsi commercials were used to openly promote their product as better than the competition (the “cola wars”), and (3) Pepsi positioned itself as “the choice of a new generation.”

195. In addition to maximizing profits, name three other objectives that businesses may choose when setting prices.

Correct Answer: Three other pricing objectives could include (1) earning a return on investment (ROI), (2) increasing sales or market share, or (3) creating a price-quality image.

196. What is meant by elastic demand and inelastic demand?

Correct Answer: Elastic demand refers to products in which demand for the product is affected by its price. As price rises for products with elastic demand, consumers will buy less of the product; as prices fall, they will buy more of the product. Inelastic demand refers to products in which price has very little effect on demand.

197. Development of a good marketing strategy is an important stage in planning a new product. Describe the steps taken in developing the marketing strategy.

Correct Answer: Research is done to identify the target market and to ensure there is a demand for the product. Next, marketers should decide on the product’s packaging, branding, and labeling. Strategies should also be developed for the other marketing mix components--promotion, price, and distribution. The entire marketing mix should be evaluated to see if it meets the needs of the proposed target market and if the company can implement the mix effectively.

Chapter 4 198. Describe the four stages of the product life cycle, including one or two marketing strategies for each stage.

Correct Answer: The first stage is the introduction stage, when a new product is first launched. Typical strategies at this stage include building consumer awareness through advertising and distributing to selective markets where consumers are more likely to buy the product.

During the growth stage, there are two main goals: gaining consumer preference and increasing sales. Multiple sizes, new models, different flavors, or other options may be offered to enhance the basic product. One of two opposite pricing strategies may be used: keeping prices high while demand is high, or reducing prices to capture additional customers. Spending on promotion and advertising continues, and may be increased to convince consumers that the product is superior to the products offered by competitors. Additional market segments may also be targeted.

The third stage, maturity, is usually the longest stage in the product life cycle and is typically defined by sales that continue to increase, but at a slower pace than sales in the growth stage. The main goals are to maintain market share and extend the product life span. With increasing competition, marketing strategies may focus on style modifications or functional modifications, such as technology upgrades. Another strategy is intensive distribution, or selling the product in as many locations as possible.

Businesses may also start offering discounted or sale prices.

Finally, in the decline stage, sales drop--often rapidly. Marketing strategies at this stage include deciding whether to keep or eliminate weak products, reducing promotional efforts, finding new uses for an old product, or reducing inventory by selling the product at lower prices through secondary markets.

199. Maximizing profits is the most obvious pricing objective. Discuss three other pricing objectives, including when and why these different objectives may be used.

Correct Answer: Three other pricing objectives include earning a return on investment (ROI), increasing sales or market share, and creating a price-quality (high-quality) image. The first of these three objectives, return on investment, may be used to determine whether a particular price will help achieve a profit. In addition, businesses can compare their ROI to the industry average ROI to see how they are performing.

The second objective, increasing sales or market share, can be used to encourage customers to buy. Businesses with excess inventory, such as holiday or seasonal items, may temporarily use low prices to maximize sales.

This is not a good long-term objective, since little or no profit will be earned.

The third objective, creating a price-quality or high-quality image, is done by using prestige pricing to convince consumers that the product is made

Chapter 4 with better materials or better workmanship, or that they are purchasing a superior service.

200. Compare and contrast price skimming versus penetration pricing.

Correct Answer: Both price skimming and penetration pricing refer to strategies that are commonly used during the introduction stage of the product life cycle. Since new products have a high rate of failure during the introduction stage, the pricing strategy is very important.

Price skimming involves setting a high price to emphasize the uniqueness of a product and to recover the product development costs quickly. The target market must be analyzed carefully, however, to determine if it is willing to pay high prices. Businesses earn higher profits when using price skimming, but they also attract more competition to the market. Penetration pricing involves setting a low price for new products to gain a larger market share more quickly. This strategy might also be used if a business determines its target market is more price-conscious. Penetration pricing results in lower profits, but it discourages competition.

Chapter 5 201. Distribution channels are used to help meet consumer needs and demand in a more timely way and may reduce marketing costs for both businesses and consumers. *a. True b. False

202. When a direct distribution channel is used, either the producer or the consumer is responsible for all marketing functions, including product and service management, distribution, pricing, promotion, selling, financing, and risk management. *a. True b. False

203. Indirect channels of distribution are typically used for the distribution of industrial products, including raw materials, equipment, and supplies used in manufacturing. a. True *b. False

204. Vending machines and kiosks are becoming somewhat less popular as channels of distribution for consumer products. a. True *b. False

205. A purchasing agent may be responsible for creating a buying plan, identifying and selecting suppliers, communicating specifications, and managing all related paperwork. *a. True b. False

206. A computerized point-of-sale (POS) system is used to update inventory records on an hourly or daily basis. a. True *b. False

207. A common threat to the supply chain is inventory theft by burglars, customers, and employees. *a. True b. False

Chapter 5 208. The necessity of obtaining permits, licenses, and registrations for imported products, as well as the existence of quotas on imported products, have all served to slow the rate of international trade. a. True *b. False

209. As consumer demand for eco-friendly practices has grown, these practices have become a significant factor in determining supply chain decisions. *a. True b. False

210. Outsourcing is becoming a somewhat less important part of the distribution process because it tends to decrease overall efficiency and weaken customer service. a. True *b. False

211. With the many modes of transportation available today, few products rely on using a combination of methods to get to the consumer. a. True *b. False

212. Although the cost of air transportation is relatively high, the speedy delivery it provides may reduce other costs, such as storage and handling. *a. True b. False

212. Although the cost of air transportation is relatively high, the speedy delivery it provides may reduce other costs, such as storage and handling. *a. True b. False

214. Warehouses today are typically multistory buildings, conveniently located near the center of a city to be close to retail businesses that need storage space. a. True *b. False

215. Products are often shipped, stored, and handled many times between

Chapter 5 production and consumption, so packages must be designed for protection as well as promotion. *a. True b. False

216. In a channel of distribution, which of the following roles would a realtor play a. producer *b. agent or broker c. retailer d. consumer

217. Which of these functions would most likely NOT be performed by a wholesaler? a. storing excess product b. buying from multiple producers and distributing to multiple retailers *c. pricing and promoting products d. helping manufacturers analyze sales data

218. Which of the following purchases demonstrates the use of an indirect channel of distribution? a. buying produce from a farmer at a farmer’s market b. ordering jewelry online c. calling L.L. Bean to buy a sweater *d. buying produce from a grocery store

219. With direct channels of distribution, the producer or consumer will be responsible for all marketing functions. Which of the following products is the LEAST likely candidate for a direct channel of distribution? *a. designer clothing b. hand-made jewelry c. homemade cookies d. fresh fruit

220. Which of the following market conditions makes a direct channel of distribution a better choice? a. the market consists of a small number of customers b. all of the customers are located in a small geographic area c. the product is customized to meet specific customer needs *d. all of these make a direct channel of distribution a better choice

Chapter 5 221. After a purchase order is processed, the _____ department usually prepares the invoice. a. shipping b. sales *c. accounting d. marketing

222. A purchase order is a form listing products a buyer needs. It must contain all of the following EXCEPT a. item number and/or description *b. delivery date of each item c. prices of products ordered d. quantities of each item ordered

223. Many businesses outsource the shipping function to delivery companies like FedEx and UPS because of the _____ they offer. a. cost savings *b. tracking systems c. special deals d. eco-friendly packaging

224. Logistics is the physical distribution process that involves transporting, _____, and _____ products throughout the supply chain. a. storing, improving b. delivering, repricing *c. storing, delivering d. storing, promoting

225. For a small, fragile product that must travel over a short distance, the best mode of transportation is *a. truck b. railroad c. airplane d. boat

226. Tina purchased three quarts of fresh strawberries directly from the grower at a local farmer’s market. She paid $2.00 per quart for the strawberries. If she’d purchased the same amount of berries at the grocery store, she would have paid $3.50 per quart. How much did Tina save by buying directly from the grower?

Correct Answer(s): a. $4.50

Chapter 5 227. The R.J. Patton Company received an invoice from a supplier for $4,500.

If Patton pays the invoice within 10 days, however, the company can take a 3 percent discount. How much will Patton save if it pays the invoice within 10 days?

Correct Answer(s): a. $135

228. A company recently filed an insurance claim for damage to shipped products valued at $75,000. The insurance company paid 80 percent of the claim. How much did the company receive?

Correct Answer(s): a. $60,000

229. In a recent year, UPS delivered 15 million packages worldwide. How many packages, on average, did UPS deliver each week? (Round your answer to the nearest whole number.)

Correct Answer(s): a. 288,462

230. Because its sales are seasonal, the Snow-Go snowmobile company rents warehouse space to store inventory for only six months each year. If rent on the warehouse costs $26,500 per month, how much does Snow-Go pay each year for warehouse space?

Correct Answer(s): a. $159,000

231. _____ involves the methods used by businesses to get their products to customers.

Correct Answer(s): a. Distribution

232. Businesses that buy products from producers and then sell the products to other businesses, often retailers, are called _____.

Correct Answer(s): a. wholesalers

233. A(n) _____ is a small, free-standing booth containing a computer or display screen that distributes product information.

Correct Answer(s):

Chapter 5 a. kiosk

234. An inventory control system should include information about the types of products on hand, the _____ of each product, and the length of time each product has been in inventory.

Correct Answer(s): a. quantity

235. Purchasing insurance, training employees, and using computer security features to help protect products from damage or theft are all examples of managing _____ that affect the supply chain.

Correct Answer(s): a. risks

236. In pursuing international trade, a business must account for such factors as quotas, which are limits on the amount of a product that can be imported into a country, and _____, which are taxes placed on imported products.

Correct Answer(s): a. tariffs

237. _____ occurs when the manufacturer or supplier hires a third party (another company) to perform specific supply chain management functions.

Correct Answer(s): a. Outsourcing

238. When products must be moved from the nearest rail site to a final destination, manufacturers can use a _____ service by packing products into large containers or truck trailers, which are then shipped on flatbed rail cars.

Correct Answer(s): a. piggyback

239. _____ is defined as the transporter’s record of making on-time deliveries in acceptable condition.

Correct Answer(s): a. Reliability

240. In addition to storage of products, a _____ center offers a variety of supply chain services to help move a product to the marketplace more

Chapter 5 efficiently, including order processing and fulfillment, packaging and labeling, and shipping and receiving.

Correct Answer(s): a. distribution

241. Describe the role of an agent or a broker as a member of the distribution channel.

Correct Answer: An agent or a broker is an individual or a business that works to bring producers and buyers together in exchange for a fee.

242. List three direct channels of distribution.

Correct Answer: Answers will vary somewhat, but should include three of the following direct channels of distribution: telemarketing, mail-order and catalog shopping, online shopping, television home-shopping networks, factory outlets, and farmers’ markets.

243. What five basic activities are involved in supply chain management?

Correct Answer: Five basic activities involved in supply chain management are (1) purchasing materials, (2) processing orders, (3) managing and controlling inventory, (4) warehousing and shipping, and (5) managing supply chain risks.

244. Changes in the business environment are having an effect on supply chain management. Name four factors that have an important influence in supply chain decisions.

Correct Answer: Four factors that have an influence on supply chain decisions are (1) international markets, (2) outsourcing, (3) digital distribution, and (4) eco-friendly practices.

245. Define the term logistics.

Correct Answer: Logistics is the physical distribution process that involves transporting, storing, and delivering products throughout the supply chain.

246. Describe the difference between a warehouse and a distribution center.

Correct Answer: A warehouse is simply any building designed to store large quantities of a product safely. A distribution center is a large facility that offers a variety of supply chain services to help move a product to the marketplace

Chapter 5 more efficiently. In addition to storage, a distribution center may offer order processing and fulfillment, packaging and labeling, and shipping and receiving. As is true of a warehouse, cost effectiveness is an important consideration, but the main focus of a distribution center is on providing excellent customer service.

247. Consider and describe the pros and cons of the following distribution channels for fresh produce: grocery store, wholesale distributor, and farmers’ market.

Correct Answer: Answers will vary but should include one or two points pro and con for each option. Some potential pros and cons might include the following: Grocery Store Pros: opportunity to sell many kinds of produce year-round to meet consumer demand for variety and easy to maintain freshness due to high turnover Cons: not as fresh as produce from a farmers’ market and not as easy to supply organic produce at a competitive price Wholesaler Pros: ability to sell a larger quantity and reach larger markets at various retailers and adequate storage Cons: harder to maintain freshness of produce and loss of contact with the final consumer, including immediate consumer feedback Farmers’ market Pros: fruits and vegetables will be at the peak of freshness and, without a “middle man,” it will be easier to supply organic produce at a competitive price Cons: all distribution functions must be handled by the farmer/producer, such as storage, handling, pricing, and promotion at point of sale; and less of a variety of produce based on what is in season

248. Describe in detail the following supply chain activities: purchasing materials, processing orders, managing and controlling inventory, and warehousing and shipping.

Correct Answer: Purchasing materials and services is the first activity required to start production. Business-to-business marketing is typically necessary, as the business purchases products and services from others, such as office furniture, computers, raw materials and component parts, and even services, such as legal help and/or advertising through advertising agencies.

Processing customer orders typically involves many departments within the business, including the sales department, warehouse and shipping departments, and the accounting department. The sales department communicates the order to the warehouse to see if the product is in stock.

If it is, the product is packaged and prepared for shipment. Before the order is shipped, it must be checked for accuracy, and shipping methods and costs must be determined. The accounting department prepares a customer invoice, and the customer is notified that the order has been processed.

Chapter 5 Several types of information must be maintained in an inventory control system, including the types of products in inventory, the quantity of each product on hand, and the length of time each product has been in inventory.

Inventory systems must have a method of determining what to order, when, and in what quantity.

Warehousing and shipping is the final activity to consider. Many businesses need to store products until the buyer wants or needs them, or may simply have excess products that need to be stored. Businesses may also store raw materials or components that are used in the production of their products.

249. Discuss the role of eco-friendly practices in the supply chain.

Correct Answer: As consumer demand for eco-friendly products and practices continues to increase, efforts to protect the environment are evident throughout the supply chain. Recyclable or reusable packages and packing materials are designed to prevent excess pollution and waste. These efforts are often made into points of awareness in product promotion and have become a selling point for many consumers. In addition to promoting product awareness, some businesses have incorporated efforts to make recycling easy for customers, which increases the amount of post-consumer recycling and further reduces the cost to businesses. One example of this is seen in the recycling efforts made by Hewlett-Packard. HP provides postage-paid shipping labels in printer cartridge boxes and offers an online ordering tool so customers can request recycling services.

250. Discuss the importance of, and appropriate logistics for, transporting, storing, handling, and delivering perishable or otherwise valuable products.

Correct Answer: Perishable products must be handled carefully throughout the distribution process. In the case of food, special medicines, or even internal organs used in medical emergencies, choosing the mode of transportation and handling the product throughout the channel of distribution is utterly crucial, and may even mean the difference between life and death. Airplanes are often used for rapid delivery of such products, although alternative methods may be more appropriate if the distance to be traveled is short.

Pipelines may be the only appropriate means of transportation for some of the most valuable goods on the planet, such as water, oil, and gas.

Once the delivery method or methods have been chosen, the particular supplier of these methods should be evaluated for reliability, capability, and traceability first. In the case of perishable products, initial costs must be considered against potential costs if the delivery process fails.

Chapter 6 251. Most consumers are bombarded with thousands of promotional messages daily, and the majority of the messages make an impact with the target market. a. True *b. False

252. A business that sells a product that is used by more than one target market may use different promotional mixes for each target market. *a. True b. False

253. The first step in creating a promotional plan is to determine the promotional mix. a. True *b. False

254. In most cases, the best method of budgeting is to estimate and match what competitors are spending for promotion. a. True *b. False

255. When a product hits the maturity stage, advertising is a useful way to remind customers about the product and to help maintain market share. *a. True b. False

256. One disadvantage of television advertising is the expense; running a 30-second advertisement on television during popular primetime shows cost tens of thousands of dollars. a. True *b. False

257. Responding to unfavorable publicity or a negative event is a part of the public relations function, and businesses have been known to spend millions of dollars to counteract negative publicity. *a. True b. False

258. The cost of public relations is relatively inexpensive compared to advertising.

Chapter 6 *a. True b. False

259. A preapproach, which involves researching prospective customers before making any contact, is often used by effective salespeople. *a. True b. False

260. During the approach, the salesperson’s top priority is to present an appropriate product and communicate the features and benefits that are most likely to close the sale. a. True *b. False

261. Sales promotions are often used to get consumers to try new products and can more directly influence consumer behavior by providing an immediate incentive. *a. True b. False

262. Sales promotions rarely strengthen sales and brand loyalty in the long run. a. True *b. False

263. An endorsement, which is a public expression of support for a product or a service, is only effective when given by well-known celebrities. a. True *b. False

264. Catalogs, telemarketing, door-to-door sales, and e-mail are all best described as direct marketing techniques. *a. True b. False

265. Consumers who can see, taste, or feel the merchandise, especially in a retail setting, are more likely to make a purchase. *a. True b. False

Chapter 6 266. Many marketers use the AIDA concept when developing the promotional mix. AIDA is an acronym that stands for all of the following EXCEPT a. attention b. interest c. desire *d. attitude

267. Which of the following is the first step in developing a promotional plan? a. identify the promotional objectives *b. determine the target market c. test a variety of promotional mixes d. set the promotional budget

268. After a promotional mix is determined, the _____ will be spread among the promotional mix activities. *a. budget b. sales personnel c. timeline d. potential customers

269. TV advertisements are often ignored. The MOST common reason for this is because of a. unpopular celebrities b. competing needs *c. advertising clutter d. low-budget special effects

270. Which of the following is NOT true about publicity? a. it is less expensive than advertising *b. advertisers have more control over the content c. it is often perceived to be more credible than advertising d. it can reach a large audience

271. Good salespeople will often view objections from customers as an opportunity to _____. a. restate the value of the product b. demonstrate the product *c. supply more information d. suggest related products to enhance the value of the product to be purchased

Chapter 6 272. Referrals, networking, and joining professional and civic organizations are all great ways to a. determine the customer’s needs b. follow up after a sale c. present a product *d. generate sales leads

273. Sales promotions are an especially effective way to *a. influence consumers’ behavior b. enhance the image of a product c. generate long-term sales d. retain customers

274. Karen is shopping at the mall for a new outfit. As she passes one store, she notices the window display showing the latest spring fashions. She enters the store to try on the clothes displayed. This is an example of _____ at work. a. sampling *b. visual merchandising c. product placement d. word-of-mouth

275. All of the following components are examples of effective visual merchandising EXCEPT a. colors, lights, and space used to highlight the products *b. many types of merchandise used in a single display c. a display that creates a lifestyle or a mood d. interior displays and signs

276. A business that sold $3.4 million in goods last year allocated 8 percent of sales to promotion. What was the dollar amount of the promotional budget?

Correct Answer(s): a. $272,000

276. A business that sold $3.4 million in goods last year allocated 8 percent of sales to promotion. What was the dollar amount of the promotional budget?

Correct Answer(s): a. $272,000

278. Your company has decided to budget 5 percent of its net sales for promotion. Net sales for the year totaled $4 million. The promotional budget

Chapter 6 will be allocated as follows: 50 percent for advertising, 30 percent for sales promotion, 16 percent for public relations, and 4 percent for personal selling. How much money will be spent on sales promotion?

Correct Answer(s): a. $60,000

279. Assume that 100,000 people watch the Channel 9 evening news in Centerville. If Centerville Fine Furniture spends $5,000 to run one commercial during the broadcast, what was the advertising cost per person reached by the commercial?

Correct Answer(s): a. $0.05

280. A local coffee shop earns 25 percent profit on all lattes. The lattes normally sell for $3, but the coffee shop is offering 20 percent off the price of the lattes this week only. If the shop typically sells 500 lattes a week, how many discounted lattes will the shop need to sell during the promotion to match the profit normally earned?

Correct Answer(s): a. 625

281. To sell a product or service, a business must first capture the consumer’s _____ and create awareness.

Correct Answer(s): a. attention

282. After identifying promotional objectives and setting the promotional budget, the next step in creating the promotional plan is determining an appropriate promotional _____.

Correct Answer(s): a. mix

283. One way to create a promotional budget is to base it on a percentage of _____.

Correct Answer(s): a. sales

284. The ability to make an emotional connection with the target market is one of the biggest advantages of using _____ as part of the promotional mix.

Correct Answer(s):

Chapter 6 a. advertising

285. A business may use _____ to gain greater visibility, publicize its growth, promote recent product innovations, or to respond to negative publicity.

Correct Answer(s): a. public relations

286. If a buyer is hesitant, the salesperson might make trade-offs in an attempt to close the sale; this process is known as a(n) _____.

Correct Answer(s): a. negotiation

287. One of the most important steps in the sales process is the _____, which involves contacting the customer after the sale to ensure satisfaction.

Correct Answer(s): a. follow-up

288. Consumer sales may increase and consumers may actually change their buying habits when offered _____, which may include rebates, free samples, or contests.

Correct Answer(s): a. sales promotions

289. Showing a product or a brand name as a part of a movie, video game, or other form of entertainment is known as product _____.

Correct Answer(s): a. placement

290. _____ merchandising allows the consumer to see the product in an appealing way that makes a purchase more likely.

Correct Answer(s): a. Visual

291. What are the five steps in developing a promotional plan?

Correct Answer: The five steps in developing a promotional plan are (1) determine the target market, (2) identify the promotional objectives, (3) set the promotional budget, (4) determine the promotional mix, and (5) implement and evaluate

Chapter 6 the promotional plan.

292. Name two advantages to advertising and two disadvantages.

Correct Answer: Answers will vary, but two of these four advantages should be included: (1) Consumers’ opinions about a product’s legitimacy and quality are more favorable when the product is advertised. (2) Advertisements can be repeated many times, reinforcing the advertising message. (3) Advertising reaches a large audience. (4) Advertising can be used to make an emotional connection with the target market.

Two of these four disadvantages should be included: (1) Advertising is expensive. (2) Advertising is impersonal because it doesn’t allow for face-to-face communication or provide ways for the consumer to give feedback. (3) Advertising can become stale over time, causing consumers to block it out. (4) Due to the sheer volume of advertisements, consumers have developed a tendency to tune out.

293. Despite being heavily advertised, and even promoted with free doctors’ samples, the sales of a new medicine begin to decline. The reason for this decline is suspected to be negative publicity. What steps can the business take?

Correct Answer: Answers will vary but should emphasize the importance of a public relations campaign. This may include running large advertisements countering the negative publicity, issuing a press release about a special cause the business is sponsoring, or even something more subtle, such as a campaign that reinforces the caring, pro-health philosophies of the business.

294. What are the seven steps in the sales process?

Correct Answer: The seven steps in the sales process are (1) generate sales leads, (2) approach customers, (3) determine customer needs, (4) present the product, (5) overcome objections, (6) close the sale, and (7) follow up to ensure consumer satisfaction.

295. What are four common uses of sales promotions?

Correct Answer: Sales promotions are commonly used to (1) encourage consumers to try a new product, (2) increase short-term consumer demand, (3) strengthen brand loyalty, and (4) influence consumer behavior by encouraging new or different patterns of consumption.

296. Name one target market more likely to be influenced by celebrity endorsements and one target market less likely to be influenced by such endorsements.

Chapter 6 Correct Answer: Target markets more likely to be influenced by celebrity endorsement include teenagers and less-educated consumers; target markets less likely to be influenced by celebrity endorsements are older, more educated consumers.

297. Define promotional mix and explain its importance.

Correct Answer: The promotional mix is a combination of advertising, public relations, personal selling, and sales promotion, all used to create a favorable impression of a business’s products and/or services. Promotion is important because consumers don’t automatically buy products. They must have information before they make a purchase.

In addition, consumers today are bombarded with thousands of messages trying to convince them to buy various products and services. Only a few of the messages actually make an impact with the target market, and even a smaller percentage of the messages persuade consumers to take action and make a purchase. While different types of promotions are better suited to different products and different target markets, any well-planned promotional mix should deliver a consistent message about the product. When more than one type of promotion is used, the various promotional efforts must complement each other.

298. Why is advertising the most common form of promotion for new products?

Correct Answer: Advertising is a great way to introduce new products to the market for several reasons. First, advertising is a cost-effective way to reach a large audience. The cost-per-viewer is relatively low compared to other promotional methods. Second, the widespread product awareness generated through advertising can start to influence consumers’ needs and wants, and ultimately their purchasing decisions. Third, when businesses advertise, they bring a sense of credibility to their products. Consumer opinions about a product’s legitimacy and quality are actually more favorable when the product is advertised.

Finally, one of the biggest advantages of advertising, particularly television advertising, is the ability to make an emotional connection with the target market through the use of actors, music, images, and other production factors. Emotional connections help build strong brands.

Businesses can establish a competitive advantage when consumers associate favorable images with a brand name.

299. Explain the seven steps involved in the sales process. Why is the last step so important?

Correct Answer: The first step in the sales process, at least in some types of businesses, is for salespeople to generate sales leads by identifying prospective customers. This may be accomplished through referrals, in which a previous customer or business makes a recommendation, or through networking with

Chapter 6 friends, business contacts, coworkers, and other groups.

The second step is to approach customers by making initial contact with them, either in person, or with a telephone call, letter of introduction, or other promotional materials. The third step, determining customer needs, is closely related; when approaching customers, it is crucial to first assess the customer’s needs. Only when the customer’s wants and needs are accurately assessed can the product or service be presented in a favorable way.

The fourth and fifth steps are to present the product and overcome objections. Salespeople should be very familiar with the products and services they are selling. After the presentation, salespeople should review the benefits that are most important to the customer and answer any questions they may have. Even objections can be viewed as an opportunity to supply more information.

The sixth step is to close the sale. When a customer is ready to buy, the salesperson may be able to pick up on cues, and that’s the time to ask for the sale and reinforce the customer’s decision. Finally, as the last step, a good salesperson will follow up on the sale to be sure the customer is satisfied. Was the product delivered on time? Did the product meet the customer’s expectations? Following up is important to help build loyal customer relationships and repeat business.

Chapter 7 301. Magazine advertising, in most cases, is superior to newspaper advertising in reaching a specific target market. *a. True b. False

302. Although the cost per viewer is high, the overall cost of television advertising is quite low. a. True *b. False

303. The average American encounters 37 minutes of television advertising and promotions each day. a. True *b. False

304. Reach is defined as the total number of people who will be exposed to an advertisement multiplied by the number of times they will see it. a. True *b. False

305. In a very competitive business field, continuous advertising may be used to frequently remind consumers of a product or service. *a. True b. False

306. E-mail advertising is one of the quickest and easiest ways to reach customers online. *a. True b. False

307. If you do an online search for “coffee cake” and a link for “Cake of the Month Club” appears next to your search engine results, this is an example of a banner ad or a display ad. a. True *b. False

308. Popular blogs may attract thousands of visitors every month and are a great place for advertisements targeted to specific markets. *a. True

Chapter 7 b. False

309. Cost-per-action (CPA) advertising may be the best option for small companies with tight budgets, since the business pays only for specified actions defined in the ad. *a. True b. False

310. Hits do not represent the number of people visiting a website. *a. True b. False

311. Cinema advertising is becoming more popular, with over $600 million invested in this outlet every year. *a. True b. False

312. Young males between the ages of 12 and 24 are the primary target market for video games. a. True *b. False

313. One advantage shared by television advertising and product placement is the opportunity to create an emotional connection with the target market. *a. True b. False

314. Advertisements which completely encase a public vehicle, such as a bus or a taxi, are known as vehicle wraps. *a. True b. False

315. Ads for banks, real estate agencies, and auto dealerships are typically banned from use on school buses. a. True *b. False

316. All of the following are disadvantages of television advertising EXCEPT

Chapter 7 a. technology now allows consumers to record shows and skip commercials b. the production process is lengthy c. the overall cost is quite high *d. there is very little opportunity to have an emotional impact

317. The target market for a new brand of jeans is young girls between the ages of 12 and 19. A good choice for advertising might be a. direct mail b. television advertising during SpongeBob SquarePants c. radio advertising on a country music station *d. a print ad in a teen magazine

318. If a business estimates that 1.5 million people will be exposed to an advertisement which has run a total of ten times, 15 million is an estimate of the advertisement’s a. reach b. frequency *c. gross impression d. pass-along rate

319. With a(n) _____ strategy, advertising is heavier during certain times of the year, such as holidays. a. pinpoint b. intermittent *c. pulsing d. continuous

320. An effective business website is LEAST likely to make use of *a. pop-up ads b. attention-grabbing headlines c. an option to sign up for newsletters d. testimonials

321. Research firm eMarketer estimates that Facebook’s worldwide advertising revenue will grow to $7 billion in 2013, which would make Facebook a. the second-largest seller of online display ads, behind only YouTube *b. the largest seller of online display ads c. the most popular social media website d. a better advertising choice than television for most products

Chapter 7 322. All of the following are advantages to online advertising EXCEPT a. it provides an interactive platform for communication between businesses and consumers *b. e-mails may be hard to distinguish from spam, or phishing e-mails c. it is flexible and easy to keep current d. it is easy to reach specific target markets

323. The movie Iron Man 2 featured more than 64 brands. This is an example of *a. product placement b. cinema advertising c. trailer advertising d. a brand wrap

324. Aerial advertising is a great way to a. convey new information to potential consumers b. get an emotional reaction from potential consumers *c. capture the attention of potential consumers d. target a specific market of potential consumers

325. The latest advertising media trends currently include all of the following EXCEPT a. webisodes *b. aerial advertising c. mobile advertising d. viral videos

326. If the average American sees 61 minutes of television advertising and promotions each day, how many minutes of TV ads and promotions does the average American see in one week?

Correct Answer(s): a. 427

327. Benny’s Carpet runs a 30-second radio ad ten times every day on Springfield’s most popular talk radio station. The ad runs for three weeks.

Monday through Friday, Benny’s Carpet pays $100 each time the ad runs; on weekends, Benny’s pays only $50 each time the ad runs. What is the total amount Benny’s Carpet spends on the radio ad over the three-week period?

Correct Answer(s): a. $18,000

328. It costs $50,000 for an advertisement to run in a magazine with a

Chapter 7 circulation of 1 million people. Find the CPM. Correct Answer(s): a. $50

329. By 2015, $46.08 billion will be spent on online advertising. This will account for 24 percent of all advertising spending. Find the total dollar amount of all advertising spending in 2015.

Correct Answer(s): a. $192 billion

330. A company sells digital cameras for $200. It advertises them online, paying $2.50 CPM. The company has determined that it takes 2,000 impressions to sell one camera. What is the online advertising cost to sell one camera?

Correct Answer(s): a. $5

331. A short, catchy tune used in advertising is known as a _____.

Correct Answer(s): a. jingle

332. The average length of a television commercial is _____seconds long; long enough to make an emotional impression, but a short time to include relevant information.

Correct Answer(s): a. 30

333. Four main criteria in selecting advertising media are cost, lead time, frequency and _____.

Correct Answer(s): a. reach

334. _____ is a common way to measure advertising cost efficiency per audience member.

Correct Answer(s): a. Cost-per-thousand b. CPM

335. A small, typically rectangular ad that may appear at the top or side of a web page and contains a link to an advertiser’s website is known as

Chapter 7 a(n) _____ ad.

Correct Answer(s): a. banner b. display

336. There are a variety of methods used to determine the cost of online advertising. One method that is growing in popularity permits advertisers to pay only when a website visitor takes a specifically defined action in response to an ad; this is known as _____ advertising.

Correct Answer(s): a. cost-per-action b. CPA

337. _____ advertising features brands on billboards, storefronts, and racecars that appear in popular video games.

Correct Answer(s): a. Video game

338. _____ advertising includes ads that appear on the interior or exterior of public transportation and other vehicles.

Correct Answer(s): a. Transit

339. Video advertisements that run as a series of episodes on a website are known as _____.

Correct Answer(s): a. webisodes

340. Sending promotional messages to smartphones, iPads, and other handheld digital devices is known as _____ advertising.

Correct Answer(s): a. mobile

341. Name four types of traditional advertising media. Which of these is currently the dominant media for advertising?

Correct Answer: Four types of traditional advertising media include television, radio, print, and outdoor advertising. As of this writing, television is the dominant advertising medium, although online advertising is quickly gaining in popularity.

Chapter 7 342. What four main criteria are used to help select advertising media? Give a brief description of each one.

Correct Answer: The four main criteria used to help select advertising media are (1) reach, or total number of people who will be exposed to an ad over time; (2) frequency, or the number of times a person is exposed to the ad; (3) lead time, or how long it will take to produce and place an ad; and (4) cost, which considers total cost and cost per person.

343. Name five types of online advertising.

Correct Answer: Answers will vary, but should include five of the following: e-mail advertising, banner (or display) and pop-up advertising, search engine advertising (also known as a paid search), website advertising, blogs, social media advertising, and Twitter.

344. Describe three common ways to determine the cost of online advertising.

Correct Answer: Three common ways to determine the cost of online advertising are (1) cost-per-click (CPC) advertising, in which advertisers literally pay for every click their ad receives; (2) cost-per-thousand impressions (CPM) advertising, which allows a company to pay for a certain number of impressions on a per-thousand basis, instead of paying per click; and (3) cost-per-action (CPA) advertising, in which the advertiser pays only when a website visitor takes specific actions, such as completing a survey, subscribing to a newsletter, or placing an order.

345. Name two kinds of cinema advertising.

Correct Answer: Answers will vary, but should include two of the following: (1) ads shown on the big screen before the movie starts, including trailers (or previews) of upcoming movies, (2) ads on popcorn boxes, cups, and/or ads in the lobby or other ads at the concession stands, and (3) product samples given out at the concession stands.

346. What are some ways that a video can go viral?

Correct Answer: Videos typically start on a video-sharing website like YouTube but can quickly be distributed by anyone who thinks a particular video is funny, cool, or informative. With the number of social networking sites now available, including Facebook in particular, videos can very quickly reach an audience of hundreds of thousands, or even millions, of viewers.

347. What are four kinds of traditional print media? What are some of the

Chapter 7 advantages and disadvantages of print media in general and some advantages and disadvantages of each of the four types?

Correct Answer: Four kinds of traditional print media are newspapers, magazines, direct mail, and flyers and brochures. In general, print media is still one of the best ways to promote a business and its products. Print ads can be relatively inexpensive but can easily be used to reach either a mass audience or a specific target audience. In addition, with several forms of print ads, the lead time is very short and appropriate for time-sensitive material. The biggest drawback may be that print ads have to work harder to get the consumer’s attention compared to television or online ads. Creative headlines, use of color, and appealing visual images are often necessary.

In general, newspapers are relatively inexpensive (as compared to magazine advertising or television) and can reach a large audience quickly. Drawbacks include the short life span of each ad, clutter from competing ads, and a dwindling newspaper readership. Magazine ads, unlike newspaper ads, provide the ability to target specific markets. Magazines also have a longer life span and are more likely than newspapers to be passed along to other readers.

The disadvantages are that magazine ads are more expensive than newspaper ads and suffer from the “clutter” effect, which may cause readers to skip over ads. They also take more time to produce.

Direct mail can be a highly segmented advertising strategy. Also, with the use of mailing lists, the advertising message can be personalized, which will elicit a more positive response. Direct mail campaigns are also hidden from competitors, making it difficult for them to react quickly. Two disadvantages of direct mail are that consumers may treat it like junk mail without even reading it, and direct mail can be expensive depending on the size of the target market and the extent of the campaign.

Finally, brochures and flyers can be used. They are inexpensive, and brochures provide an easy-to-read, eye-catching format. When flyers are randomly mailed or placed on doorsteps, it is nearly impossible to measure their effectiveness. As with direct mail, flyers are often ignored. They are becoming less useful as use of the Internet increases.

348. Discuss the importance of frequency as a factor in media selection.

Compare continuous advertising with a pulsing strategy.

Correct Answer: Advertisers must consider the number of times the target market needs to be exposed to a message to meet its objectives. Although one exposure typically is not enough, too many exposures can cause the consumer to tune out. Higher frequency is more beneficial for new products or complex products than it is for well-known products.

Continuous advertising is a strategy in which advertisements are run steadily over an extended period of time to continuously remind consumers of a product or service. For example, the insurance field is very competitive, so insurance companies may use continuous advertising to remind consumers of their services and/or their differences from competitors. The soft drink market is a similar example, in that it’s a highly competitive field, with a need to remind consumers why one brand should be favored. With

Chapter 7 a pulsing strategy, advertising is heavier during certain times of the year, such as during the holidays. Although retailers may advertise year-round, they advertise more often during the Christmas season.

349. What are some advantages and disadvantages of online advertising in general?

Correct Answer: One of the biggest advantages of online advertising is flexibility.

Companies can quickly change the advertising message so that it is always current. In addition, the Internet provides an interactive platform for communication between businesses and consumers. Finally, online advertising has a broad reach, with the capability of reaching a global audience, but it can also be easily used to reach specific target markets.

One of the biggest disadvantages of online advertising is the lack of control a company has over the information posted by others. People can leave negative feedback directly on a company’s website or almost anywhere, including blogs and social networking sites. By the time these postings are addressed or removed, the company’s reputation may be damaged already.

Other threats to online advertising include spamming and phishing. Both of these can be used in ways that cause potential consumers to tune out. Phishing scams, some of which use an actual business name and logo, may make consumers wary of e-mail advertising that’s legitimate. Many phishing scams are very dangerous attempts to gather personal data to commit identity theft crimes.

350. Discuss product placement as an advertising strategy. Why might product placement be preferable to traditional television advertisements?

Correct Answer: Product placement has many of the advantages of television advertising, while eliminating some of the disadvantages. As with traditional television commercials, product placement is a great way to raise brand awareness, reach a large (sometimes global) audience, and encourage viewers to develop an emotional connection with the product through their emotional connection with a TV show, movie, or video game. When viewers do develop an emotional connection, either with a movie or its characters, they have a higher recall of the brands used in that setting.

Product placement also has an advantage that regular television commercials don’t: Consumers often skip over television commercials and flip to other channels. This doesn’t happen with product placement.

Chapter 8 351. Storytelling is a creative element that can simultaneously create an emotional connection with the audience and emphasize important product features. *a. True b. False

352. Using troublemakers, tricks, or rebels in advertising is a risky creative strategy that often backfires or “falls flat.” a. True *b. False

353. It has been shown that teams come up with better ideas than individuals working alone, even when the idea generation process leads to clashing ideas. *a. True b. False

354. An advertising campaign for a new product will typically try to encourage trial purchases as the first step toward building sales. a. True *b. False

355. Once consumers have tried a new brand and developed a positive attitude toward it, advertisers have attained their ultimate goal. a. True *b. False

356. Researchers primarily use two different processes when collecting data--primary market research and secondary market research. *a. True b. False

357. Surveys, interviews, and focus groups are all examples of secondary market research sources. a. True *b. False

358. Accurate marketing research is rarely inexpensive. *a. True b. False

Chapter 8 359. Marketing research can help companies identify threats to the business as well as opportunities. *a. True b. False

360. It is the responsibility of marketing researchers to keep personal information confidential, only using the information for lawful and ethical purposes. *a. True b. False

361. Rebates and premiums are the two most common forms of sales promotion. a. True *b. False

362. Coupons are an effective way to encourage new-product use through trial purchases and can also be used to encourage repeat purchases. *a. True b. False

363. A bonus given to salespeople for selling a specific brand is known as a deal loader. a. True *b. False

364. Without careful management, push money programs may inadvertently encourage salespeople to ignore customers’ needs. *a. True b. False

365. A trade allowance can take several forms, including a buying allowance, an advertising allowance, and/or a slotting allowance. *a. True b. False

366. Creativity is probably best defined as having elements of a. unexpectedness, relevant product information, and/or a character

Chapter 8 that represents the brand *b. unexpectedness, storytelling, and/or emotional content c. factual information, statistics that are relevant to the target market, and/or storytelling d. mischief, unexpectedness, and/or ideas conceived as a team

367. Commercials featuring Ford trucks pulling heavy loads, in combination with the tagline, “Built Ford Tough,” best exemplifies the use of a. synergy b. an emotional connection *c. concrete images d. storytelling

368. Advertising objectives are set to move consumers all the way from brand _____ to brand loyalty. *a. awareness b. purchases c. interest d. benefits

369. Advertising a product’s benefits should focus on issues that are most relevant to consumers. If the target market is senior citizens, the MOST relevant issues might include *a. health and leisure time b. image and esteem c. family and the environment d. none of the above

370. All of the following are necessary steps in the marketing research process EXCEPT a. developing the research design *b. developing an appropriate questionnaire c. carefully identifying the problem d. analyzing the data

371. Researchers primarily use two different processes when collecting data.

These two basic processes are a. online market research and in-person market research b. primary market research and online market research *c. primary market research and secondary market research d. data collection research and intuitive, creative research

372. All of the following are generally benefits of marketing research EXCEPT

Chapter 8 *a. it is an easy task that anyone in the company can perform b. it reduces the risk of doing business c. it helps a company identify threats and opportunities d. it guides a company’s communication with consumers

373. To encourage the purchase of organic cotton clothing, a business decides to give away a free organic cotton T-shirt to the first one hundred customers who purchase any other item of organic cotton clothing. This best exemplifies a a. loyalty marketing program *b. premium c. risk-free sample d. point-of-purchase display

374. A certificate that can be redeemed for 25% off the price of any meal at a new, upscale restaurant best exemplifies the use of a a. sample b. rebate c. premium *d. coupon

375. A food manufacturer wants to place a new cereal at eye level on the grocery store shelves of a retailer. The manufacturer is likely to offer the retailer a(n) _____ allowance. a. buying *b. slotting c. advertising d. training

376. A company wants to conduct market research and hopes to survey 5 percent of the local population. The community has a total population of 200,000 people. How many total people will the company survey?

Correct Answer(s): a. 10,000

377. Java Joe’s is a popular coffee shop with two locations in Jacksonville.

To decide if there would be local interest in a third location, Java Joe’s decides to conduct market research. They want to survey 4 percent of Jacksonville’s population of 300,000. Java Joe’s wants to send 40 percent of those surveys to 18- to 30-year-olds, because this is an important market for the shop. How many people will be surveyed in this age group?

Correct Answer(s): a. 4,800

Chapter 8 378. Jackie purchased a cordless telephone for $40. She sent in a rebate form on her purchase and six weeks later received a check from the manufacturer for 15 percent of the purchase price. What was the dollar amount of the check?

Correct Answer(s): a. $6

379. A dishwasher manufacturer pays a bonus of $25 for each unit of Model XK-45 sold at Best Buy in the month of August. If 18,000 dishwashers are sold, how much push money does the manufacturer pay out in bonuses?

Correct Answer(s): a. $450,000

380. If Paula’s Petshop buys a minimum of 30 cases of cat food, the store will receive a buying allowance of $4 off each case. If cases sell for $50 each, what would be the price for a purchase of 40 cases?

Correct Answer(s): a. $1,840

381. _____ advertisements are generally more memorable and are more likely to influence consumers’ buying behavior.

Correct Answer(s): a. Creative

382. A really clever advertising campaign can get people talking, lead to news stories, and even make its way into everyday language. This is known as building _____.

Correct Answer(s): a. momentum b. buzz

383. The first objective of an advertising campaign for a new brand is to build brand _____.

Correct Answer(s): a. awareness

384. A(n) _____ is a list of questions used to obtain facts, opinions, and attitudes.

Chapter 8 Correct Answer(s): a. survey

385. A(n) _____ is an organized method of collecting, storing, processing, and reporting information that is needed to make marketing decisions.

Correct Answer(s): a. marketing-information system b. MKIS

386. A(n) _____ is an item offered to consumers for free or at a reduced price with the purchase of another item.

Correct Answer(s): a. premium

387. A refund of money after the purchase of a product, known as a _____, is often used for products such as automobiles, computers, and major appliances.

Correct Answer(s): a. rebate

388. A(n) _____ allows consumers to compete for a prize based on their skills or abilities.

Correct Answer(s): a. contest

389. A deal loader may be in the form of a(n) _____ loader, which is a gift given for making a specified order size.

Correct Answer(s): a. buying

390. A bonus given to salespeople for selling a specific brand is called _____ money.

Correct Answer(s): a. push

391. Explain the need for creativity in advertising.

Correct Answer: Creativity is a key element in effective advertising campaigns because it makes a product or service stand out from the crowd. By drawing attention

Chapter 8 to the brand, and/or creating an emotional connection with consumers, advertising can be memorable and should ultimately influence customers’ buying decisions.

392. Name three basic objectives of advertising campaigns.

Correct Answer: Answers may vary but should include three of the four following objectives: (1) build brand awareness, (2) communicate product benefits, (3) encourage trial or repeat purchases, and (4) move consumers from brand awareness to brand loyalty.

393. What is the difference between primary market research and secondary market research?

Correct Answer: Primary market research is the process of collecting data for the first time to solve a specific problem. Secondary market research is the process of collecting and analyzing data previously gathered for other purposes.

394. What are three limitations of marketing research?

Correct Answer: Answers will vary but should include three of the following: (1) marketing research isn’t easy and is best left to the experts; (2) marketing research can be very expensive and time-consuming; (3) the value of marketing research depends entirely on the accuracy and timeliness of the data collected; and (4) marketing research can identify opportunities and threats to a business, but is never a guarantee of success.

395. A bonus pack is a common type of price deal. What are two common ways to offer products sold as bonus packs?

Correct Answer: Two common ways to offer a bonus pack are (1) to provide a larger size at the same price as the standard size and (2) to band together two or more units of the same product (or a related product) and sell them at the regular single-unit price. For example, a toothbrush and toothpaste may be banded together.

396. One type of deal loader is the display loader. How does this work?

Correct Answer: A display loader gives the contents of a display to the retailer after the promotional campaign. For example, Black & Decker, a tool manufacturer, may have a display of power tools at a hardware store as part of a special promotion. When the program is over, the hardware store receives all of the tools on the display if a specified order size was achieved.

Chapter 8 397. Research has shown that creative teams come up with better ideas than individuals. What is brainstorming and what are some guidelines for brainstorming ideas as a team? What kinds of conflict might occur when brainstorming?

Correct Answer: Brainstorming is an organized approach to generating a large number of ideas in a group setting. During brainstorming sessions, team members generate lists of ideas to help achieve objectives. One rule is that ideas should not be judged or criticized during the meeting, because this will discourage participation.Even poor or completely unworkable ideas may lead to a breakthrough when ideas are combined, leading to new solutions inspired by the original ideas.

A clash of ideas is typical during the brainstorming process. On the other hand, a clash of ideas may lead to a clash of personalities. This is less desirable, and often leads to a shutdown in communication. Good team leaders will guide the group through both kinds of conflict.

398. Describe the six steps in the marketing research process.

Correct Answer: The six steps in the marketing research process are to (1) identify and define the problem, (2) develop the research design, (3) determine the method for collecting data, (4) collect the data, (5) analyze the data, and (6) report and present the data.

It is crucial that the research team clearly identifies, understands, and defines the problem because all subsequent activities in the process work toward solving the problem. The problem may be presented in the form of research questions such as, “Should the existing marketing mix be changed?

If so, how?” The second step is determining a research design, or a plan for how the marketing process will be implemented. It identifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.

The third and fourth steps are to determine the method for collecting data and then collecting it. In primary market research, data may be collected from surveys, questionnaires, or in focus groups. In secondary market research, data that already exists may be used. This data may come from company records, government reports, and other research studies.

The fifth and sixth steps are to analyze the data and then present it in a properly documented and meaningful way. For example, if numerical data are collected, researchers can calculate the percentage of responses or average responses to each question. Finally, researchers should prepare a written and oral report to present conclusions and recommendations to management.

399. Describe the benefits of primary market research as it relates to advertising.

Correct Answer: In advertising, primary market research is used to measure the effectiveness

Chapter 8 of an advertising message. Research can be conducted before and after an ad is released. Before the ad is released, focus groups can be used to get people’s opinions and thoughts about a brand or an advertising concept.

Observation can be used to gauge consumer reaction to proposed ads.

Advertisers can even use home videos recorded by consumers to learn about actual product usage. By observing consumers in real settings, advertisers gain a better understanding of the target market, enabling them to develop messages that are more meaningful. After an ad is released, researchers use focus groups to perform recall tests. Consumers are given questionnaires to see what they remember about the ad. This helps measure advertising effectiveness.

400. What makes contests and sweepstakes appealing? What is the goal for the business using one of these promotions?

Correct Answer: Contests and sweepstakes are appealing if the prizes are worthwhile and the game itself is interesting or entertaining. While sweepstakes are based purely on luck, and draw more consumers than contests, a contest can be useful in several ways. For one thing, it may draw a specific target market, and then the winner is rewarded for donating his skills. Doritos and Pepsi MAX sponsored a contest in which the contestants had to create a Super Bowl commercial for a top prize of $1 million. The main goal for the business is just to gain publicity in a way that’s positive and fun and to create interest in a product or brand.

Chapter 9 401. Marketers are always senders, never receivers, in the communication process. a. True *b. False

402. All communication begins with a sender. *a. True b. False

403. When marketers target global markets or other cultures, translation problems can lead to miscommunication. *a. True b. False

404. Tina has just informed Adam that she has been promoted to marketing manager. Adam made no verbal response but simply nodded and returned to his desk. In this scenario, Adam did not provide any feedback to Tina’s message. a. True *b. False

405. When a new product or service enters the market, advertising messages are used to inform consumers about it. *a. True b. False

406. Persuasive advertisements are commonly used during the decline stage of a product’s life cycle. a. True *b. False

407. One of the benefits of interpersonal communication is the ability to have a two-way conversation. *a. True b. False

408. All oral business presentations are planned well in advance. a. True *b. False

Chapter 9 409. The Internet is being used both for mass communication as well as for more targeted communications. *a. True b. False

410. One advantage of mass communication is that it is a two-way flow of information. a. True *b. False

411. It is important for today’s businesses to have a social media presence. *a. True b. False

412. According to the 4Cs Model, making a connection means that communication should be simple enough for the target audience to understand. a. True *b. False

413. If an audience believes who is delivering an advertising message and what is being said, the message has credibility. *a. True b. False

414. Involuntary attention is captured by the use of various attention-gaining techniques, such as colors, sounds, and unusual images. *a. True b. False

415. Repetition in advertisements hinders the decoding process. a. True *b. False

416. The originator of a message is called the *a. sender b. decoder c. encoder d. receiver

Chapter 9 417. Any distraction or interference that acts as a barrier to a message is called a. a roadblock b. a communication wall *c. noise d. feedback

418. During the maturity stage of a product, advertising and promotional communication is chiefly used to a. explain to consumers the benefits of the product b. persuade consumers to purchase the product c. tell consumers about special prices and free giveaways *d. remind consumers that the product exists and why they like it

419. Informative messages are very important for a. common products that consumers use every day *b. complex and technical products c. products that are in the growth stage of their life cycle d. all of the above

420. Being tired, happy, angry, or empathetic can have an effect on what the sender says and how the receiver interprets it. This is an example of *a. psychological context b. relational context c. historical context d. situational context

421. Before delivering a presentation, a speaker should ask all of the following questions about his or her audience EXCEPT a. To whom will I be speaking? b. What does the audience know about my topic already? *c. How quickly can I finish my presentation? d. What does the audience want to know about my topic?

422. Which of the following media would typically NOT be used for mass communication? a. newspapers b. television c. the Internet *d. telemarketing

Chapter 9 423. Businesses are using which of the following social media platforms to post business-related and product-related videos to inform and entertain consumers? *a. YouTube b. Twitter c. Groupon d. LinkedIn

424. Which of the following is NOT part of the 4Cs Model? a. connection *b. communication c. comprehension d. credibility

425. Effective advertising has all of the following characteristics EXCEPT *a. it is created from the advertiser’s perspective b. it never overpromises and underdelivers c. it finds a unique way to break through the clutter d. it does not allow creativity to overwhelm the marketing strategy

426. In a survey of 500 people who speak English as a second language, 57 percent said they had spotted advertising that was incorrectly translated from English into other languages. How many people spotted errors?

Correct Answer(s): a. 285

427. Research shows that the average worker spends the following amount of time each day on various communication activities: 9 percent writing 16 percent reading 30 percent speaking 45 percent listening If you spend six hours each day engaged in communication on the job, how many minutes (on average) do you spend writing?

Correct Answer(s): a. 32.4 minutes

428. Research shows that the average worker spends the following amount of time each day on various communication activities: 9 percent writing

Chapter 9 16 percent reading 30 percent speaking 45 percent listening If you spend six hours each day engaged in communication on the job, how many minutes (on average) do you spend listening?

Correct Answer(s): a. 162 minutes

429. Last year, ESPN magazine sold 450 ad pages. This year, it sold 20 percent more. How many ad pages did the magazine sell this year?

Correct Answer(s): a. 540

430. Last week, a business tracked 4,400 tweets about its products on Twitter. This week, the business tracked 3,652 tweets about its products.

What percentage decrease is that?

Correct Answer(s): a. 17 percent

431. The exchange of meaningful information between two or more people is called _____.

Correct Answer(s): a. communication

432. The _____ is what is being communicated.

Correct Answer(s): a. message

433. _____ is the conversion of ideas or thoughts into a message.

Correct Answer(s): a. Encoding

434. A receiver’s response to a message is called _____.

Correct Answer(s): a. feedback

435. A(n) _____ is a square, black-and-white bar code that can be scanned by smartphone users to access videos, coupons, maps, and other information

Chapter 9 about a product or service.

Correct Answer(s): a. QR b. quick response

436. _____ communication is communicating “one on one” with another person.

Correct Answer(s): a. Interpersonal

437. A(n) _____ is a written list of topics to be discussed at a meeting.

Correct Answer(s): a. agenda

438. _____ communication involves communicating a message to a large, diversified audience using mass media.

Correct Answer(s): a. Mass

439. _____ needs are needs that focus on enjoyment and pleasure.

Correct Answer(s): a. Hedonic

440. _____ attention is devoted to an advertising message that meets a consumer’s current purchasing goals.

Correct Answer(s): a. Voluntary

441. Identify the factors that influence a receiver’s level of comprehension of a message.

Correct Answer: Factors that influence a receiver’s level of comprehension include how much the receiver knows about the topic, his or her interest in the message, and the relationship and trust that exists between the sender and receiver.

442. Identify the three goals of advertising and promotional communication.

Correct Answer: The goals of advertising and promotional communication are to inform, persuade, and remind target audiences.

Chapter 9 443. What is an extemporaneous presentation?

Correct Answer: An extemporaneous presentation is an impromptu or unplanned oral presentation.

444. Name two advantages of mass communication.

Correct Answer: Two advantages of mass communication include its wide reach and its cost-efficiency.

445. What does it mean for an advertising message to “make a connection” with an audience? Why is it important for an advertising message to make a connection?

Correct Answer: Making a connection means that the message evokes some kind of reaction from the audience. When a message makes a connection, audience members are more likely to change their behavior or take some kind of action.

446. Define the term unique selling proposition.

Correct Answer: A unique selling proposition is an advertisement that emphasizes a unique quality or significant consumer benefit.

447. What is a communication channel? Name several common communication channels used for advertising and promotion and explain the factors that need to be considered when choosing a communication channel.

Correct Answer: To transmit the message, the sender uses a communication channel, or a medium, to distribute the message. Common communication channels for advertising and promotion include television, radio, newspapers, magazines, salespeople, direct mail, signage, and the Internet. Communication channels greatly affect the receiver’s level of understanding. Factors to consider when choosing a communication channel include the target audience, the urgency of the message, the need for feedback, the content of the message, and the size of the audience receiving the message. For example, when immediate feedback is necessary, salespeople may be more effective at conveying the message. For mass communications, television and the Internet may be the most effective channels. Selecting the appropriate communication channel will help ensure the message reaches the intended receiver.

448. Identify and define the three types of noise, as they relate to the communication process. Give examples of each.

Chapter 9 Correct Answer: The three types of noise are external, internal, and semantic. External noises include sights, sounds, smells, textures, and other environmental factors that distract attention away from the message being communicated.

Internal noise includes an individual’s thoughts or feelings that interfere with communication. Daydreaming and feeling tired or ill are internal noises that will diminish the understanding of the message being communicated.

Semantic noise occurs when there is no shared meaning in a communication.

Words or symbols mean different things to different individuals or elicit different reactions. For example, abstract words can be interpreted differently. Other sources of semantic noise include poorly developed speech, discriminatory remarks, highly emotional words, and controversial symbols. Language barriers in international markets can also result in semantic noise.

449. What is context? Identify and describe the six types of contexts.

Correct Answer: Context is the situation in which communication occurs. People communicate differently in different contexts. Psychological context, or mental context, describes the emotions, moods, needs, desires, and personalities of the participants in the communication process. Being tired, happy, angry, or empathetic can have an effect on what the sender says and how the receiver interprets it. Relational context, also called social context, involves the roles, responsibilities, and status of the participants. Historical context is based on previous or similar experiences. Environmental context refers to the physical location in which the communication takes place. Factors to consider include the place, time of day, noise level, lighting, temperature, and season. Situational context involves the social aspects of where the communication takes place. Cultural context includes learned behaviors and rules that affect interaction.

450. Explain how consumers’ existing knowledge about a product influences the advertising message that is created. How might the ways a message is presented to consumers who are familiar with a product differ from the ways it is presented to consumers who are unfamiliar with a product?

Correct Answer: To ensure that consumers will fully understand an advertising message, advertisers need to determine the consumers’ existing knowledge about the product or service. If consumers are already familiar with a product, advertisers can spend more time promoting the brand and less time explaining the product features. This advertising strategy would not work well for a new product that is unfamiliar to consumers. Without knowing about the product and its benefits, consumers would not fully comprehend such an advertisement.

If consumers are unfamiliar with a product or service, advertisers must communicate the message they want to convey about it. If advertisers are trying to communicate intangible concepts, they should clarify their meaning. Concepts such as fresh, strong, and healthy have different meanings to different people.

Chapter 10 451. Although the content of an advertising plan will vary based on the product and market, the general outline of the plan will be similar. *a. True b. False

452. After the advertising objectives have been identified, the next step is to develop the creative strategy. a. True *b. False

453. The historical method is the bet way to develop an advertising budget, because it takes into account changes in the market or in competition. a. True *b. False

454. An industry analysis is performed to learn more about current and potential users of a product or service. a. True *b. False

455. Even when similarities among cultures exist, businesses sometimes must tailor their advertising to each specific culture. *a. True b. False

456. An advertisement that shows a family sitting at the dinner table raving about the taste of the macaroni and cheese they’re eating is an example of a slice-of-life ad. *a. True b. False

457. Humorous ads work best for new, unknown, and/or expensive products. a. True *b. False

458. Using music in advertising increases brand awareness and recall of a product and its brand name. *a. True b. False

Chapter 10 459. The creative team plays the biggest role in the execution of the advertising plan. *a. True b. False

460. The actual drawing, photography, or other type of art used in an advertisement is called the storyboard. a. True *b. False

461. Digital advertising is best described as a cross between print and television advertising. *a. True b. False

462. A direct measure of advertising effectiveness looks at an actual target audience’s reaction to an advertisement, whereas an indirect measure simply looks at the relationship between advertising and sales. a. True *b. False

463. The main purpose of an advertising campaign is often to influence consumers’ behavior. *a. True b. False

464. Counting the number of people who enter your store after you begin an advertising campaign and comparing this to average store traffic is a poor way to determine advertising effectiveness. a. True *b. False

465. Measuring advertising effectiveness is one of the key components for a successful marketing campaign. *a. True b. False

466. An examination of a business’s strengths, weaknesses, opportunities,

Chapter 10 and threats is called a(n) a. situational analysis b. brainstorming session *c. SWOT analysis d. advertising plan

467. Once the creative strategy is in place, the next step in the advertising plan is to a. evaluate the advertising plan b. set advertising objectives *c. execute the advertising plan d. determine the budget

468. Which member of the advertising team determines when and where advertisements will be placed? a. marketing manager b. account executive c. director *d. media planner

469. A market analysis is performed to a. focus on developments and trends within an entire industry *b. learn more about current and potential users of a product or service c. help a business determine its competitive advantages and disadvantages relative to another business d. determine if a business can standardize advertisements in different markets around the world

470. A truck advertisement that shows the vehicle pulling a heavy load up a steep hill to demonstrate the truck’s towing capacity is an example of *a. product demonstration advertising b. scientific advertising c. slice-of-life advertising d. image advertising

471. Which of the following types of advertising is used to promote the superiority of one brand over a competitive brand. a. testimonial advertising b. cooperative advertising c. guerilla advertising *d. comparison advertising

Chapter 10 472. A short, memorable phrase that establishes an identity for a brand is called a a. headline *b. slogan c. catch phrase d. jingle

473. Which component of a print ad describes the product in great detail. a. headline b. subhead *c. body copy d. caption

474. Which type of test measures the extent to which an advertising message strikes a chord with the target audience. *a. resonance test b. behavioral test c. subliminal test d. recall test

475. Every week for the past three years, Sally’s Sandwich Shop has run an ad in the local newspaper. Two months ago, though, Sally decided to stop running the ad and she hasn’t seen any difference in her sales or store traffic. This probably means that a. Sally should continue running the ad b. the shop needs to advertise in the newspaper every day rather than every week *c. the business might be able to cut that form of advertising d. no one ever paid attention to the advertisements in the first place

476. A local clothing store decided to budget 7 percent of last year’s sales to this year’s advertising. If sales last year totaled $600,000, how much will the store be spending on advertising this year?

Correct Answer(s): a. $42,000

477. The advertising campaign for Jim’s Bike Shop cost $20,000 and generated $80,000 in additional sales. Find the ROI. Correct Answer(s): a. 300 percent

Chapter 10 478. The advertising campaign for Dilly Deli cost $10,000 and the return on investment was 500 percent. How much did the ad campaign generate in additional sales?

Correct Answer(s): a. $60,000

479. A comparison advertisement for a new brand of automobile tire claims that its tires last 20 percent longer than the leading brand. If the leading brand lasts for 30,000 miles, how many miles should you expect to get from the new brand?

Correct Answer(s): a. 36,000

480. A survey asked 700 consumers if they remembered seeing an ad for Ford trucks during Monday Night Football. Results indicated that 63 percent recognized the ad. How many consumers in the survey is that?

Correct Answer(s): a. 441

481. A(n) _____ analysis describes the environment in which a business is operating.

Correct Answer(s): a. situational

482. The _____ describes who the target market is, what the advertising message will be, and how the message will be communicated.

Correct Answer(s): a. creative strategy

483. The amount earned as a result of money invested is called the _____.

Correct Answer(s): a. return on investment b. ROI

484. When using _____ advertising, advertisers must understand the psychographic characteristics of their target audience.

Correct Answer(s): a. lifestyle

Chapter 10 485. _____ advertising promotes the general perception of a product or service rather than its function or purpose.

Correct Answer(s): a. Image

486. The process of using words to express creative ideas and concepts is called _____.

Correct Answer(s): a. copywriting

487. A(n) _____ is a component of a print advertisement that is used to capture the reader’s attention.

Correct Answer(s): a. headline

488. A(n) _____ is a drawing of the print advertisement showing where all the elements in the ad are positioned.

Correct Answer(s): a. layout

489. A _____ test measures a lower level of brand awareness by determining whether audience members remember seeing the ad.

Correct Answer(s): a. recognition

490. A(n) _____ study measures consumers’ feelings and beliefs about a brand before and after exposure to an advertisement.

Correct Answer(s): a. attitude

491. What is an advertising plan?

Correct Answer: An advertising plan describes the goals of an advertising campaign, methods to use to accomplish those goals, and ways to evaluate whether those goals are achieved.

492. Why might a business conduct an industry analysis?

Correct Answer:

Chapter 10 A business might conduct an industry analysis to determine the estimated size of an industry, the expected outlook of an industry, the product/service and sales trends in an industry, the leading businesses in an industry, and marketing strategies commonly used in an industry.

494. What is a creative brief? When is it developed?

Correct Answer: The creative brief is developed as part of the creative strategy process.

It is a description of what the advertising campaign is to accomplish.

495. Briefly explain how technology has improved the way consumers’ behavior can be tracked.

Correct Answer: Research companies can supply selected households with handheld scanners and electronic meters that are attached to TV sets. This equipment tracks brand purchases, coupon use, and advertising exposure. Advertisers use the data to measure the impact of their ads.

496. How can the use of different contact telephone numbers help a company determine the effectiveness of its advertising?

Correct Answer: When a company receives calls to a phone number that is listed only in an advertisement, it is easier to track results.

497. Why are advertising plans based on objectives? Name at least five common advertising objectives.

Correct Answer: Advertising plans are based on objectives that describe the desired results of the advertising campaign. Common advertising objectives include the following:

• • • • • • •

Build consumer awareness of a product or brand Communicate product or brand benefits Generate interest in a product or brand Create, change, or reinforce consumers’ attitudes about a brand Persuade consumers to switch brands Attain brand loyalty Increase sales

498. Under what circumstances is standardized advertising likely to be

Chapter 10 effective for companies that do business internationally? Identify two types of consumers who are good candidates for the standardized advertising approach.

Correct Answer: Standardized advertising is likely to be more effective among consumers who live in countries that have similar economic, technological, legal, social, and cultural environments. The two types of consumers who are good candidates for the standardized advertising approach are (1) affluent people who are “global citizens” and who come into contact with ideas from around the world through their travels, business contacts, and media experiences; and (2) young people whose tastes in music and fashion are strongly influenced by MTV and other media that broadcast many of the same images to multiple countries.

499. Identify and describe the three phases of the production stage for a television advertisement.

Correct Answer: The three phases are preproduction, production, and postproduction. During the preproduction stage, the creative team and the producer create a production schedule, hire a director, assemble a production crew, select a location, cast the actors, and hire music suppliers. In the production stage, the commercial is filmed. A well-laid plan and highly trained technicians help ensure this process goes smoothly, but unexpected events such as bad weather and intrusive noises can cause disruptions. After the commercial is filmed, it enters the postproduction stage. Editors, sound engineers, voice-over specialists, special effect artists, and others finish the commercial. It may go through several rounds of editing and assembly before the master copy is completed. Copies of the master are made and distributed to every TV station that is part of the media plan.

500. What is the final step in an advertising plan? Give some reasons why this step is so important.

Correct Answer: The final step in an advertising plan is to evaluate the effectiveness of the advertising campaign. There are many reasons why measuring the effectiveness of advertising is important. For one thing, it determines whether the advertising message made an impact on the target audience. It also identifies which strategies worked and which didn’t. Evaluating an ad’s effectiveness can provide useful information that advertisers can use to make future advertising messages more effective. Finally, it is used to justify the investment in advertising.

Chapter 11 501. Consumer-oriented advertising may use an approach that focuses on emotional connections in human relationships as well as business relationships. *a. True b. False

502. Current trends in advertising include a greater presence for youth, who will be the next generation of consumers. *a. True b. False

503. Using consumer-oriented advertising to promote products is relatively simple for advertisers because consumer values and attitudes remain consistent. a. True *b. False

504. A sponsorship is a company’s support of an issue, cause, or event that is consistent with company objectives. *a. True b. False

505. Successful sponsorships should have well-defined short-term and/or long-term objectives and should be aligned with the company’s values. *a. True b. False

506. Brand-building sales promotions are designed to create a short-term increase in sales. a. True *b. False

507. Brand-building sales promotions are less frequently related to price, may offer promotional rewards for repeat purchases, and are often valid for an extended period of time. *a. True b. False

508. In order to survive in a highly competitive environment, companies must create a brand preference that’s strong enough to lead to long-lasting

Chapter 11 relationships. *a. True b. False

509. Direct marketing does not work well in a niche market. a. True *b. False

510. Direct retailing allows consumers to see a product demonstrated in their own home. *a. True b. False

511. Brand equity can be either positive or negative, depending on the reputation a brand acquires. *a. True b. False

512. The extent to which a brand is recognized and associated with a specific product or service is known as brand equity. a. True *b. False

513. The idea behind a brand image is that the consumer is purchasing not only the product but also the image associated with that product. *a. True b. False

514. The most common positioning strategy is price and quality positioning. a. True *b. False

515. Benefit positioning is used to show consumers how a brand’s attributes or benefits are capable of solving the consumers’ problems or satisfying the consumers’ needs. *a. True b. False

Chapter 11 516. Advertising for high-involvement purchases is a. usually a strong influence in consumers’ buying decisions b. more effective than word-of-mouth advertising *c. helpful when consumers must narrow down their choices to a short list d. more important than consumers’ previous experience

517. Which of the following people is MOST likely to be receptive to the common consumer approach in advertising? a. Joshua is 18 years old and likes to dress in the latest fashions. *b. Bethany is a stay-at-home mother of three young children. c. Mark is retired, very physically active, and looking for a vacation home. d. Mary is the CEO of an investment company.

518. Expected benefits from a company’s well-planned, continuous sponsorship would include all of the following EXCEPT a. boost goodwill b. demonstrate brand values *c. increase short-term sales d. increase long-term sales

519. Sales promotions are popular because they allow consumers a. to save money b. buy higher-quality products for lower prices c. try a product they otherwise would not have tried *d. all of these

520. Which of these is an example of direct marketing? *a. infomercials b. coupons c. rebates d. tie-in promotions

521. The RFM analysis of a marketing database enables companies to evaluate the value of each customer based on three factors, which include a. recency, frequency, and marketing influence factors b. reliability, frequency, and marketing influence factors c. reliability, frequency, and marketing factors *d. recency, frequency, and monetary factors

522. _____ branding attempts to reach target customers by creating a lot

Chapter 11 of buzz, or positive or enthusiastic talk, about the brand through online word-of-mouth advertising. a. Social *b. Viral c. Consumer-led d. Emotional

523. Consumers’ high acceptance of _____ brands makes it even more important for companies with brand-name products to build brand loyalty among consumers. *a. generic b. emotional c. trustworthy d. inferior

524. BMW changed its advertising tagline from “The Ultimate Driving Machine” to “Sheer Driving Pleasure.” This shift in emphasis BEST represents a. competitor positioning b. user positioning *c. repositioning d. price and quality positioning

525. Promoting Jif peanut butter as the one “choosy moms choose” is an example of a. benefit positioning b. price and quality positioning c. application positioning *d. user positioning

526. A cell phone company invited visitors to its website to vote on which spokesperson should be in its next television commercial. The winning spokesperson got 43 percent of the votes. If 1.4 million total people voted, how many voted for the winner?

Correct Answer(s): a. 602,000

527. When Stan went to the grocery today, his bill originally came to $52.40.

But then Stan pulled out his frequent-shopper card. After the cashier swiped the card, Stan’s bill was reduced to $49.78. What percent reduction is that?

Correct Answer(s): a. 5 percent

Chapter 11 529. There are three burger joints in your town. The total market potential for burger joints in your town is $2,500,000. Because of its excellent product positioning strategies, Gut Busters has obtained 68 percent of the total market. What is the total market share in dollars for Gut Busters?

Correct Answer(s): a. $1,700,000

530. There are three burger joints in your town. The total market potential for burger joints in your town is $2,500,000. Because of its excellent product positioning strategies, Gut Busters has obtained 68 percent of the total market. What is the total market share in dollars for the two smaller burger joints?

Correct Answer(s): a. $800,000

531. Many advertisements now feature the _____ consumer, or someone who is easier to identify with and more believable than someone who appears to be perfect.

Correct Answer(s): a. common

532. Generalizing about “typical” characteristics of a specific group of individuals, or _____, is a risk in consumer-oriented advertising.

Correct Answer(s): a. stereotyping

533. A company’s _____ may involve supporting community events, national events, or nonprofit organizations and charities.

Correct Answer(s): a. sponsorship

534. Discounts, consisting of percentage markdowns, and bonus packages, consisting of larger-size products offered at the same price as standard-size products, are examples of _____ deals.

Correct Answer(s): a. price

535. _____ sales promotions are designed to create short-term increases in sales.

Correct Answer(s): a. Purchase-building

Chapter 11 535. _____ sales promotions are designed to create short-term increases in sales.

Correct Answer(s): a. Purchase-building

537. Having the opportunity to demonstrate products and explain special promotions in person are advantages of direct _____.

Correct Answer(s): a. retailing

538. A high level of brand _____ occurs when a consumer not only recognizes the brand but also understands the distinct qualities that make it better or different from the competition.

Correct Answer(s): a. awareness

539. Brand _____ is a consumer’s overall impression of a brand, including thoughts and emotions associated with the brand.

Correct Answer(s): a. image

541. Define consumer-oriented advertising.

Correct Answer: Consumer-oriented advertising is any advertising created from the customer’s perspective to make the message more appropriate and significant for customers.

542. What are four steps a company can take to ensure a successful sponsorship?

Correct Answer: Four steps a company can take to ensure a successful sponsorship are (1) define short-term and/or long-term objectives for the sponsorship, (2) align the sponsorship with the company’s values and the target market’s values, (3) budget the company’s time and money effectively, and (4) promote the sponsorship.

543. Name four types of sales promotion?

Correct Answer: Answers may vary but could include four of the following: coupons, rebates,

Chapter 11 price deals, loyalty marketing programs, sampling and free trial offers, premiums, contests and sweepstakes, and point-of-purchase (POP) displays.

544. What is the purpose of direct marketing, such as direct mail, catalogs, infomercials, and door-to-door sales?

Correct Answer: Direct marketing is used to get consumers to make purchases in nonretail settings, such as the consumer’s home or office.

545. What is brand equity?

Correct Answer: Brand equity is the value that a company realizes from having a product with a recognizable name.

546. Describe benefit positioning as a product positioning strategy.

Correct Answer: Benefit positioning is the most common positioning strategy and involves selecting one or more product attributes (features) or benefits that are important to consumers and are the basis for making their purchasing decisions.

547. Explain the importance of the human element and the voice of youth in consumer-oriented advertising.

Correct Answer: Many of today’s advertisements are based on emotional connections.

Advertisers aim to trigger emotions that will encourage consumers to become attached to a product or identify with a brand. These ads typically focus on human relationships, such as family and close friends, but there is a growing trend to use emotion when promoting business relationships. Bank advertisements or insurance advertisements, for example, may emphasize relationships with consumers based on the care a business shows its individual customers.

The voice of youth is increasingly portrayed in ads as well. These ads focus attention on such things as the environment, anti-drug campaigns, and youth leadership roles. Many brands depend on young people to be the next generation of consumers and hope to build brand awareness and loyalty among them now.

548. Compare the characteristics of purchase-building sales promotions with the characteristics of brand-building sales promotions.

Correct Answer: Purchase-building sales promotions include incentives such as coupons, rebates, discounts, and premiums, all aimed at creating an immediate demand for a product or a service. Purchase-building promotions typically have

Chapter 11 three general characteristics in common: they generally involve price in some way, they require minimal effort on the part of consumers, and they are offered for a limited time only. Purchase-building promotions can be very effective at influencing and speeding up the buyer’s decision; some consumers may make a purchase based solely on a sales promotion offer.

Brand-building sales promotions, on the other hand, aim to encourage long-term brand loyalty and brand value among consumers. This kind of promotion is important in a highly competitive market and may take the form of sampling and free trial offers, contests or sweepstakes, and loyalty marketing programs. Carefully selected premiums that reinforce the image of a brand are also effective. Brand-building sales promotions typically have these characteristics in common: they are less frequently related to price than purchase-building promotions, they tend to reinforce repeat purchases, and they are valid for extended periods of time.

549. A marketing database is a useful tool in direct marketing. Describe the contents of a typical marketing database. How is this information used in general, and how is it used when performing the RFM analysis?

Correct Answer: A marketing database is a collection of names, addresses, and behavioral information gathered from individual customers. Behavioral information could include customer characteristics, past purchases, and brand preferences. This information allows companies to connect with customers using personalized offers that are timely and relevant. For example, a customer’s date of birth is commonly collected and stored in marketing databases. Using this information, a company can send out personalized birthday cards containing special offers to its customers.

The RFM analysis calculates the value of each customer based on recency, frequency, and monetary factors. It measures how recently and how often a specific customer is buying from the business and how much money they are spending each time. The best customers can be identified and rewarded with special offers to help build customer loyalty.

Another use for marketing databases is cross-selling, which is a direct marketing program aimed at customers who already purchase other products from the company. For example, a food manufacturer may identify customers that already purchase its cereal and send them special offers to entice them to try its new breakfast bars.

550. What is brand image and why is it important?

Correct Answer: Consumers’ buying decisions are often influenced by brand image. Brand image is the consumer’s impression of a brand. It consists of the thoughts and feelings associated with a brand. These associations are created through the consumer’s experience and observations. The product’s quality, ease of use, functionality, price, prestige, and overall value affect brand image.

However, a brand image is also based on emotional connections. For example, a consumer may have a positive image of the Starbucks brand because of its reputation for great-tasting coffee but more importantly because of the “coffee experience” provided by the atmosphere and environment at the

Chapter 11 Starbucks’ stores. Linking a product’s image to emotions is known as emotional branding. The idea behind a brand image is that the consumer is purchasing not only the product but also the image associated with that product.

Some companies try to create a personality for their brand. They may present their brands as being wholesome and down-to-earth (Nature Valley) or daring and exciting (Harley-Davidson). Many jewelers and luxury automobile manufacturers, such as Rolex and Cadillac, try to make their products seem sophisticated. Brands like Lands End are thought of as rugged and outdoorsy.

A brand’s personality is conveyed in the company’s advertising.

Chapter 12 551. Disposable income is the income left after food, clothing, utilities, and housing costs are met. a. True *b. False

552. According to a recent U.S. census, four states in the Northeast had the highest annual median household incomes and the lowest poverty rates. *a. True b. False

553. Purchasing power is measured against the cost of living; as the cost of living goes up, purchasing power goes down. *a. True b. False

554. The gross domestic product, or GDP, is the total dollar value of basic goods and services produced by a country within a certain period of time; it is comprised of food, clothing, shelter, and health care. a. True *b. False

555. Advertising generates jobs that have a positive effect on economic growth. *a. True b. False

556. The market response model of advertising budgeting is the most accurate strategy for creating an advertising budget. a. True *b. False

557. The percentage-of-sales method may set an advertising budget as a fixed percentage of either past sales or projected sales. *a. True b. False

558. A company’s share of voice is its portion of overall advertising in a specific marketplace. a. True

Chapter 12 *b. False

559. The balance sheet summarizes a company’s assets, liabilities, and net worth as of a specific date. *a. True b. False

560. The balance sheet is also known as the profit and loss statement. a. True *b. False

561. When an advertising agency is used by a business, the agency may be compensated with a commission, which is based on the amount of money the business spends on advertising media. *a. True b. False

562. There are three important factors in determining the advertising budget: the media chosen, the geographical locations to be reached, and the current stage of the product in the product life cycle. a. True *b. False

563. When setting the advertising budget, businesses must know what media the target market uses and what motivates them to buy. *a. True b. False

564. One way to calculate the effectiveness of advertising is to measure the show of interest it generates in the form of product inquiries and increased customer traffic. *a. True b. False

565. Brand preference cannot always be measured by sales. *a. True b. False

566. Which of the following economic factors does NOT directly affect

Chapter 12 advertising and marketing? a. discretionary income *b. gross domestic product c. purchasing power d. disposable income

567. After income taxes are paid, the remaining money a consumer has is referred to as _____ income. *a. disposable b. discretionary c. cost of living d. gross

568. One way advertising stimulates the economy is by adding value to products. Value is defined as a. the consumer’s level of need for the product compared to the price paid for it b. the amount of product a consumer can purchase for a given price *c. the consumer’s perception of how much satisfaction a product provides beyond the price paid for it d. the ability of the consumer to purchase a better product for a lower price

569. The percentage-of-sales method sets the advertising budget as a fixed percentage of sales. This ratio varies by industry, but the average ratio for most industries is less than _____ percent. a. two *b. five c. ten d. fifteen

570. The objective-and-task method is an accurate way to create an advertising budget, because it relates spending to *a. the objectives to be achieved b. the tasks to be performed c. the sales goals to be reached d. the brand preference to be reached

571. The income statement shows all of the following information EXCEPT a. profit (or loss) *b. assets c. expenses d. revenue

Chapter 12 572. An advertising agency is hired to increase brand awareness by 30 percent over a period of six months. The agency may earn more or less depending on whether they meet this goal or fall short of it. This is an example of a(n) _____ system of payment. a. sales-based b. fee-based c. commission-based *d. incentive-based

573. Advertising costs would most likely increase in all of the following situations EXCEPT a. when a product targets more affluent consumers b. when a product is advertised in another country *c. when a product moves from the maturity stage to the decline stage d. when a product moves from magazine advertising to television advertising

574. When sales have not increased, businesses may use the _____ method to test out other promotional methods. a. readership/viewership b. show-of-interest *c. trial-and-error d. awareness/preference

575. Which of the following methods is NOT used as a way to measure brand awareness? a. sales method b. anecdotal method c. show-of-interest method *d. market response model

576. Darren lives in Pueblo, Colorado, and earns $50,000 a year. He would need to earn $127,000 in New York City to achieve the same standard of living.

Groceries cost 53 percent more in New York City than in Pueblo. If Darren’s average weekly grocery bill in Pueblo is $78, how much would the same groceries cost in New York City?

Correct Answer(s): a. $119.34

577. A new tablet computer cost $500 last year. This year the same tablet computer costs $530. Based on this information, find the inflation rate over

Chapter 12 the past year.

Correct Answer(s): a. 6 percent

578. If a company allocates 4 percent of its projected sales of $30,000,000 for advertising, what will the advertising budget be?

Correct Answer(s): a. $1,200,000

579. A local ad agency has revenue of $60,000, rent expenses of $10,500, salary expenses of $25,400, a building worth $275,000, accounts receivable of $13,000, trademarks valued at $25,000, and liabilities totaling $78,000.

What is the agency’s net worth?

Correct Answer(s): a. $235,000

580. A local ad agency has revenue of $60,000, rent expenses of $10,500, salary expenses of $25,400, a building worth $275,000, accounts receivable of $13,000, trademarks valued at $25,000, and liabilities totaling $78,000.

What is the agency’s net income (loss)?

Correct Answer(s): a. $24,100

581. _____ is an increase in the general level of prices for products and services and a decrease in purchasing power.

Correct Answer(s): a. Inflation

582. When income _____, the quality of the product may become less important to the consumer than the price.

Correct Answer(s): a. decreases

583. Advertising increases _____, which motivates companies to produce better products that benefit the economy as a whole.

Correct Answer(s): a. competition

584. A company’s percentage of overall advertising in a specific product

Chapter 12 category is known as share of _____.

Correct Answer(s): a. voice

585. The _____ model examines the number of sales generated in relation to the dollar amount spent on advertising.

Correct Answer(s): a. market response

586. Total assets equal _____ plus owner’s equity.

Correct Answer(s): a. liabilities

587. The income received from the sale of products and services is known as _____.

Correct Answer(s): a. revenue

588. Newspapers, billboards, magazines, and other forms of advertising will cost more in larger cities where the advertising _____ is higher, because more consumers will see the ad.

Correct Answer(s): a. reach

589. The ____ costs of advertising will be higher depending on whether print, radio, or TV is selected for the advertisement.

Correct Answer(s): a. media

590. When using the _____ method to measure brand awareness, advertisers keep their eyes and ears open for feedback about the advertising campaign.

Correct Answer(s): a. anecdotal

591. What are three basic economic factors that influence advertising decisions?

Correct Answer: Three economic factors that influence advertising decisions are consumers’

Chapter 12 incomes and/or their purchasing power, inflation, and periods of recession.

592. What is gross domestic product (GDP) and how is it affected by advertising?

Correct Answer: Gross domestic product (GDP) is the total dollar value of all products and services produced by a country within a certain time period. Advertising increases demand for products and services. As demand grows, more products and services are produced.

593. What are two disadvantages of using a percentage of past sales figures to set the advertising budget?

Correct Answer: Two disadvantages of using past sales figures to set the budget are (1) it may not be desirable to decrease the advertising budget when sales decrease; rather, it may be an indication that more needs to be spent on advertising, and (2) past sales are not always the best indication of future sales.

594. What does the income statement report? What does the balance sheet show?

Correct Answer: The income statement reports a company’s revenues, expenses, and net profit or loss for a specific period of time. The balance sheet summarizes a company’s assets, liabilities, and owner’s equity (net worth) as of a specific date.

595. What are four main factors that affect how much is to be spent on advertising?

Correct Answer: Four main factors that affect the advertising budget include (1) the target market, (2) the type of media selected, (3) geography, or the location of the advertising, and (4) the product life cycle stage.

596. What is the purpose of a readership/viewership study?

Correct Answer: A readership/viewership study determines not only if the target customers are exposed to the advertising message but also if they are responding to it. For example, do consumers make a purchase after reading or viewing the ad?

597. How will a recession typically affect advertising choices? What are some good ways to position a product or service during a recession?

Correct Answer: During a recession, or any significant period of time in which the target

Chapter 12 market experiences a decline in income or purchasing power, the emphasis on any product or service will probably have to shift. Luxury goods will be less in demand with most markets, and consumers in general will be looking for better values. They will be more open to shopping based on price and/or price incentives. Coupon use rises during recessions, for example.

Products or brands that can be used to help consumers save money in other ways will also benefit if positioned as such. During the 2008-2010 recession, Arm & Hammer laundry detergent experienced an upswing in sales because it offers value and dependability at a lower price. Coleman, a camping gear manufacturer, also experienced increased revenues as consumers began camping and fishing when they could no longer afford lavish vacations.

Hyundai benefited because it offered a more affordable lineup of automobiles than its competitors.

During a recession, many companies reduce their advertising budgets. They invest in other nontraditional forms of advertising that are more cost-efficient, such as product placement, social media, and mobile device advertising. Methods that allow consumers to interact with companies help build brand loyalty--an important company asset during a recession.

598. How is the market response model used to set an advertising budget?

Correct Answer: A market response model examines the number of sales generated in relation to the overall amount spent on advertising. The purpose is to understand, in a very direct way, how advertising affects sales. Models are used to analyze how much sales will increase for every additional dollar spent on advertising. The general idea is that as long as sales exceed advertising expenditures, the business will continue spending on advertising. If sales decline, the business has to determine if additional spending--either in the same ways or with a different approach--could be justified. Prior years’ sales and prior advertising expenditures are the data used to create the response models. The accuracy of this data is important in achieving a worthwhile model.

599. Define the terms asset, liability, and owner’s equity. On what financial form do these terms appear?

Correct Answer: The terms asset, liability, and owner’s equity appear on a company’s balance sheet. The relationship among the three can be expressed as an equation: Assets = Liabilities + Owner’s Equity.

An asset is something of value owned by the business. Common types of assets include cash, accounts receivable, inventory, and supplies. Some assets are tangible, meaning they exist physically; examples of tangible assets would be equipment, furniture, buildings, and vehicles. Intangible assets are nonphysical resources and rights that are of value to the business because they provide some kind of advantage in the marketplace. Examples of intangible assets include intellectual property, such as copyrights, trademarks, and patents.

A liability is a financial obligation, or an amount owed by a business. The

Chapter 12 most common type of liability is accounts payable, or amounts owed to suppliers or vendors for merchandise or services purchased on credit by a business.

Finally, owner’s equity is the amount remaining after the value of the liabilities is subtracted from the value of the assets. It is called “owner’s equity” because the owner of the business has the financial rights to the assets of the business after the liabilities are deducted. For corporations, it is referred to as shareholders’ equity. Basically, then, the balance sheet calculates a company’s wealth, or capital.

600. What are some significant ways the target market affects the advertising budget?

Correct Answer: The target market affects the advertising budget in several ways. One of the most obvious is the effect that target market income will have on the ad budget. If one business is targeting customers whose annual household income is around $500,000, and another business is targeting recent college graduates who make approximately $33,000 a year, then the advertising budgets for those two businesses will reflect that. There simply won’t be as much money that a business is willing and able to spend on the second market, but it will need to find the most cost-effective ways to reach that market.

In addition to income, the media preferences of the target market must be considered. This will affect the media choices the advertising department makes (and their respective costs). What television shows do these consumers watch? What websites, especially social networking sites, do they visit?

What newspapers or magazines do they read?

Finally, once the target market is identified and reached, what kinds of advertising and promotion will actually motivate them to make a purchase?

The needs and wants of the target market have a big impact on advertising choices.

Chapter 13 601. The Food and Drug Act of 1906 was the first important law to regulate the content and labeling of food and drug products. *a. True b. False

602. Prior to 1990, the amount of advertising allowed to air during children’s television shows was unregulated; after that year, commercials were limited to 12 minutes an hour on weekdays and 10.5 minutes an hour on weekends. *a. True b. False

603. The first law to affect cigarette advertising was the Cigarette Labeling and Advertising Act, passed in 1945. a. True *b. False

604. The government regulatory agency most directly involved in overseeing the advertising industry is the Food and Drug Administration, or FDA. a. True *b. False

605. The Alcohol and Tobacco Tax and Trade Bureau (TTB) implements and enforces a range of provisions to make sure alcohol products are created, labeled, and advertised in accordance with federal laws. *a. True b. False

606. The Creative Code of the American Association of Advertising Agencies was developed as a statement of ethical guidelines that member agencies are expected to follow. *a. True b. False

607. One of the most important self-regulation organizations in the advertising industry is the National Advertising Review Board (NARB). *a. True b. False

608. Complaints about the truthfulness or accuracy of local and national

Chapter 13 advertisements are handled by both the NARB (National Advertising Review Board) and the NAD (National Advertising Division of the BBB). a. True *b. False

609. Consumers Union, the organization that publishes Consumer Reports magazine, has the largest consumer product testing facility in the world. *a. True b. False

610. In the current business climate, a boycott or the threat of a boycott is rarely an effective way for consumers to influence business practices. a. True *b. False

611. Misleading or false statements in advertising are illegal, but exaggeration, also known as puffery, is commonly used and legal. *a. True b. False

612. Advertising is often criticized for creating demand for unnecessary products and encouraging materialism. *a. True b. False

613. Research has shown that advertisements using fear or guilt appeals are not particularly effective with most target markets. a. True *b. False

614. If the Federal Trade Commission determines that a company’s advertising is deceptive, it can legally force the company to run a corrective ad to rectify false impressions caused by the original ad. *a. True b. False

615. Under the law, advertisers must have proof to back up express (or direct) claims about a product, but not implied claims. a. True

Chapter 13 *b. False

616. The FTC is the government regulatory agency most directly involved in overseeing the advertising industry. FTC stands for a. Federal Truth-in-Advertising Commission *b. Federal Trade Commission c. Federal Trade Oversight for Consumers d. Federal Trade Control Board

617. Commercial websites directed to children or websites that attract a general audience are required to obtain parental permission before collecting information from children under the age of a. 18 b. 10 *c. 13 d. 16

618. All of the following are currently operational government regulatory agencies EXCEPT a. the Food and Drug Administration (FDA) b. the United States Postal Service (USPS) c. the Federal Communications Commission (FCC) *d. the Wheeler-Lea Committee (WLC)

619. The FCC is LEAST likely to handle which of the following consumer complaints? a. a TV commercial that is considered indecent b. an unsafe product advertised on the radio *c. a mail fraud scam d. unwanted text messages and e-mails from advertisers

620. The NARB (National Advertising Review Board) is a self-regulatory organization in the advertising industry made up of 70 professionals from three different categories: national advertisers, _____, and public members consisting of academics and former members of the public sector. a. consumer awareness groups *b. advertising agencies c. college professors d. the Better Business Bureau

621. The _____ is the nation’s oldest consumer organization and operates the Fraud Center, which tracks the latest telemarketing and Internet scams.

Chapter 13 *a. National Consumers League (NCL) b. Consumer Federation of America (CFA) c. Federal Citizen Information Center (FCIC) d. Consumers Union

622. Which of the following would be an example of a subliminal advertising message? a. Your children see an ad for Burger King hamburgers, and you buy them for your kids although you don’t really like them yourself. *b. After seeing Burger King hamburgers in a movie, you develop a craving for them, without consciously being aware you had seen the burgers in the movie. c. After seeing multiple ads for Burger King hamburgers, you try one for the first time. d. You prefer eating Burger King hamburgers rather than other fast food hamburgers, because they taste good and cost less.

623. The Children’s Advertising Review Unit (CARU) closely monitors advertising directed at children in _____. a. television and radio b. e-mails and online children’s sites *c. all media d. print media only

624. When considering the truthfulness and legality of an advertisement, the FTC looks at a number of important factors. In which of the following scenarios is legal action by the FTC LEAST likely? a. An ad promotes fast food to children with a tie-in to an R-rated movie. *b. A weight-loss ad shows people who have lost excessive weight rapidly, but it does include a disclaimer stating the results shown are not typical. c. An ad targeting senior citizens is misleading, but pertinent details are included in the fine print. d. An ad promotes a product which is known to be a health risk, but the relevant information is unavailable to consumers.

625. “Our cereal is an important part of a healthy breakfast,” is a(n) _____ about the healthfulness of the cereal itself. a. express claim *b. implied claim c. material misrepresentation d. disclaimer

626. According to U.S. law, during children’s television shows, commercials

Chapter 13 are limited to only 12 minutes an hour during weekdays and 10.5 minutes an hour on weekends. How many minutes can be shown during 10 hours of children’s television during the week?

Correct Answer(s): a. 120

627. According to U.S. law, during children’s television shows, commercials are limited to only 12 minutes an hour during weekdays and 10.5 minutes an hour on weekends. How many minutes can be shown during 7 hours of children’s television during the weekend?

Correct Answer(s): a. 73.5

628. According to the nutrition label on a box of granola bars, one bar contains 140 calories. The nutrition label on a carton of milk indicates that each serving contains 150 calories. If you ate one bar and drank one serving of milk for your morning snack every day for a week, how many total calories would you consume at snacktime that week?

Correct Answer(s): a. 2030

629. Last year, the FCC fined a radio personality $25,000 for using vulgar language on the air. This year, the radio personality used vulgar language on the air a second time. The FCC fined him 75 percent more than the first fine for this second offense. What was the dollar amount of the second fine?

Correct Answer(s): a. $43,750

630. In a recent month, the National Consumers League recorded 7,500 consumer complaints about Internet scams and telemarketing fraud. If the NCL handles 5 percent fewer complaints this month, what number of complaints will be recorded?

Correct Answer(s): a. 7,125

631. The Food and Drug Act of 1906 was replaced by the Food, Drug, and _____ Act of 1938, which required extensive product research, testing, and proof of effectiveness and safety.

Correct Answer(s): a. Cosmetic

632. The _____Labeling and Education Act of 1990 required food labels to

Chapter 13 disclose not only ingredients, contents, and quantities in food products, but also the number of calories, fat content, salt content, and more.

Correct Answer(s): a. Nutrition

633. In order to broadcast radio, TV, or wireless communications in the United States, the owner or operator must obtain a _____ from the FCC. Correct Answer(s): a. license

634. When the NAD (National Advertising Division of the BBB) can’t resolve an advertising complaint, the next step is to forward the issue to the _____, where a panel evaluates the issue.

Correct Answer(s): a. National Advertising Review Board b. NARB

635. The National Association of Broadcasters Code Authority is a self-regulation entity that monitors _____ and television advertising.

Correct Answer(s): a. radio

636. _____ refers to any organized effort by consumers to influence business practices.

Correct Answer(s): a. Consumerism

637. With the backing of a consumer agency, consumers are further empowered to become _____ agents, or people who bring about meaningful reforms that add value to their lives and others’.

Correct Answer(s): a. change

638. Making a false or derogatory statement that gives a negative impression about a competing business or product is a kind of deception known as _____.

Correct Answer(s): a. defamation

639. _____ are especially susceptible to the persuasion tactics used in

Chapter 13 advertising, which increases their demands for video games, snack foods, fast foods, and other products.

Correct Answer(s): a. Children

640. The FTC may force a company to run a corrective ad and/or impose a(n) _____, or a monetary penalty, on a company that violates truth-in-advertising laws.

Correct Answer(s): a. fine

641. What is the purpose of the Marketing Practices Division in the FTC’s Bureau of Consumer Protection?

Correct Answer: The Marketing Practices Division specializes in monitoring and regulating Internet, telecommunications, and direct mail fraud; deceptive spam; fraudulent business, investment, and work-at-home schemes, and violations of the Do Not Call and CAN-SPAM laws.

642. What is the primary role of the Federal Communications Commission (FCC)?

Correct Answer: The FCC monitors and regulates interstate and international communications by radio, television, wire, satellite, and cable. To broadcast these communications in the United States, the owner or operator must obtain a license from the FCC, which can be revoked if the owner or operator is in violation of any laws.

643. What is the primary role of the Better Business Bureau (BBB) at the state or local level?

Correct Answer: Because the NAD and the NARB only investigate national advertisements, local BBBs often review complaints about local advertisements that appear only in the cities and towns served by the advertiser. The BBB can ask a business to stop using ads that appear to be deceptive, but must alert local, state, and federal law enforcement agencies if legal action is needed.

644. What is the purpose of a consumer boycott?

Correct Answer: A consumer boycott is an organized effort to avoid purchasing goods and services from a particular company as a way to express disapproval or to pressure the company to make changes.

Chapter 13 645. What is the difference between puffery and deception?

Correct Answer: Puffery is the use of exaggeration or a subjective opinion to sell products.

It is legal because the claims or comments, such as “best in the world” are not considered factual and can’t be proven to be true or false. Deception, either with blatantly false claims or misleading statements, is illegal.

If a product makes a specific guarantee, for example, and fails to produce the stated result, the advertiser faces legal consequences.

646. When evaluating advertisements for compliance with truth-in-advertising laws, the FTC looks at whether the ad makes a “material statement” that isn’t accurate. What is a “material statement”? Provide an example of a material misrepresentation.

Correct Answer: A material statement is one that is likely to influence a consumer’s decision to buy or use the product. If a company falsely claims that its nutrition bar is made from all natural ingredients, for example, this would be a material misrepresentation to consumers who make purchases based on this factor.

647. Explain the role of the Federal Trade Commission in protecting consumers from unfair, deceptive, or fraudulent practices in the marketplace.

Correct Answer: The FTC, or the Federal Trade Commission, is the nation’s consumer protection agency. It is the main government agency responsible for enforcing many of the truth-in-advertising laws, some of which also address (or restrict) the actual content of products and services, and the advertising of those products and services. For example, the Food, Drug, and Cosmetic Act requires extensive product research, testing, and proof of effectiveness and safety.

The Children’s Television Act of 1990 restricts the amount of television advertising that can be aimed at children in any given hour of programming.

There are several ways the FTC operates to enforce the truth-in-advertising laws, including (1) conducting investigations of possible violations of the law, (2) pursuing legal action against companies and people who violate the law, (3) developing rules to protect consumers, (4) educating consumers and businesses about their rights and responsibilities, and (5) collecting complaints about consumer fraud and identity theft and making these complaints available to law enforcement agencies across the country.

648. Other than delivering mail, name additional functions of the U.S. Postal Service. What regulatory functions does the USPS serve?

Correct Answer: The United States Postal Service regulates direct mail advertising. It investigates mail fraud scams, such as foreign lotteries, free-prize schemes, pyramid schemes, investment fraud schemes, and work-at-home schemes. It prosecutes individuals and companies that commit such scams.

The Postal Inspection Service receives inquiries and investigates complaints from consumers who feel they have been defrauded by offers

Chapter 13 received via the mail.

649. Besides the well-known Better Business Bureau and the National Advertising Review Board, describe three other ways the advertising industry is self-regulating.

Correct Answer: Three additional ways the advertising industry regulates itself are (1) through advertising practices worthy of membership in the American Association of Advertising Agencies, also known as the 4As; (2) through media organizations such as the National Association of Broadcasters Code Authority and the Direct Marketing Association (DMA); and (3) through monitoring of the competition, especially when advertisements make direct comparisons.

The 4As is an exclusive organization, into which advertising agencies are only accepted if they follow certain guidelines. Not only are ads expected to be truthful and claims expected to be supported by evidence, but material is banned if it would be considered offensive, indecent, or obscene to the general public or to minority groups, including racial and ethnic groups, religious groups, age groups, and the disabled population.

Media organizations set standards for particular types of advertising media.

TV networks, for example, may reject an advertisement for inaccuracies or poor taste. Certain products, such as toys and those with health-related claims, must be approved by both the Code Authority (National Association of Broadcasters Code Authority) and the television network.

Finally, competing companies often monitor each other’s advertisements, largely out of self-interest, but with the added value of regulating advertisements in yet another way.

650. Why would a business choose to use an advertisement knowing that it will be controversial? In what general circumstances would a controversial ad likely be successful? In what cases would such an ad likely cause problems for the business?

Correct Answer: A business may use a controversial ad to make its ad stand out from the general ad clutter, to get the attention of the target market, and even to appeal to one market at the expense of another. For example, an ad that appeals to a target market interested in status symbols and prestige will likely not appeal to, and may be offensive to, a target market interested in environmentally friendly products and sustainable business practices.

In general, if the target market is likely to be displeased with the content of the ad, it’s unlikely to be successful, whether or not it is actually offensive or in poor taste according to the “average” consumer. The ad is likely to be successful, however, if it does appeal to the target market, without being offensive to a degree that might provoke a backlash from other consumer groups. For these reasons, advertisers should carefully consider the tastefulness of their ads from a number of viewpoints and then decide whether or not a particular ad is a good risk.

Chapter 14 651. The extent of separation between social classes within a culture is known as power distance. *a. True b. False

652. For marketers, the political climate of a country is somewhat less important than the demographic makeup and economic conditions of the citizens. a. True *b. False

653. Developing countries often provide more favorable business opportunities than newly industrialized countries do. a. True *b. False

654. Selling an exported product for a much lower price than the price charged for the same product in the home market of the exporter is a controversial practice called dumping. *a. True b. False

655. MTV has the capability to reach more than 300 million households worldwide, allowing advertisers to easily reach the global youth and young adult markets. *a. True b. False

656. According to the 2010 U.S. Census, the Hispanic and African-American populations in the United States have experienced the fastest growth over the past decade. a. True *b. False

657. The purchasing power of Hispanics and Asians is growing at a faster rate than for other races and ethnicities within the United States. *a. True b. False

658. The purchasing power of African Americans has increased 60 percent over

Chapter 14 the past decade. *a. True b. False

659. Asian-American households have the highest average family income of all groups in the country. *a. True b. False

660. The rate of growth in Hispanic-American purchasing power is less than the rate of growth in Asian-American purchasing power. a. True *b. False

661. In some cultures, use of humor with a new acquaintance is unwelcome and seen as a sign of disrespect. *a. True b. False

662. In some countries, communication that is concise and direct may be interpreted as rude. *a. True b. False

663. The most conservative business colors in the United States (black, grey, and navy blue) are typically acceptable clothing colors in most countries. a. True *b. False

664. The first translation of Coca-Cola in China was “Kekoukela,” which roughly translates into “happiness in the mouth.” a. True *b. False

665. The process of translating a message that has already been translated into a foreign language back to the original language is known as back translation. *a. True b. False

Chapter 14 666. Cultural attitudes that highly value the needs of the group over the needs of the individual might likely be found in a. the United States *b. South America c. the United Kingdom d. France

667. Equality is an important cultural value in countries with a a. high masculinity score b. low masculinity score *c. low power distance score d. high power distance score

668. The practice of picturing is most associated with which element of the marketing mix? a. pricing *b. promotion c. distribution d. product

669. Generally, international advertisers should have knowledge of a. types of products that can be advertised b. times during which ads for certain products can be aired on television c. types of message appeals that can be used *d. all of the above

670. Which ethnic group in the United States is growing the fastest? a. Native Americans b. African Americans *c. Asians d. Hispanics

671. Which ethnic group tends to spend more on food consumed at home than other ethnic groups in the United States do? *a. African Americans b. Hispanics c. Native Americans d. Asians

Chapter 14 672. Which of the following characteristics is true of the Asian-American market? a. They buy far less fresh produce than the average U.S. consumer. b. Their spending on personal and beauty care products exceeds the U.S. average spending in this category. c. They shop less frequently than other ethnic groups but spend more on each trip. *d. They watch TV less frequently than other groups.

673. Which of the following ethnic groups do advertisers include in the CKV strategy? a. Costa Ricans *b. Chinese c. Cambodians d. Cubans

674. A marketer would be wise to avoid featuring a dog in an advertisement that runs in a. China b. Canada *c. Saudi Arabia d. France

675. Anu translates an advertising message from English into her native language of Hindi. Then Raj, another native Hindi speaker, translates Anu’s version back into English. This is an example of *a. back translation b. decoding c. acculturation d. explicit communication

676. If the population of Kenya is 41 million, and 22 percent of Kenyans live in urban areas, what is the total population of Kenyans who live in rural areas?

Correct Answer(s): a. 31,980,000

677. India has a road network of approximately 2 million miles of roadway.

Of this total, only 47 percent consists of paved roads. How many miles of unpaved roadway exists in India?

Correct Answer(s): a. 1,060,000

Chapter 14 678. A company sells a product for $5.00 in its home market. The same product costs 80 percent less in the global market. How much does the product cost in the global market?

Correct Answer(s): a. $1.00

679. The total U.S. population of African Americans is currently about 40 million. Over the next decade, the African-American population is expected to grow to 45 million. What percent increase is that?

Correct Answer(s): a. 12.5 percent

680. The total U.S. population of Asian Americans is currently about 15 million. If this number increases 43 percent over the next decade, what will the Asian-American population be in ten years?

Correct Answer(s): a. 21,450,000

681. Key elements of _____ include shared history, beliefs, values, and language.

Correct Answer(s): a. culture

682. A culture’s tolerance level for unstructured or new experiences is sometimes given as its _____ avoidance score.

Correct Answer(s): a. uncertainty

683. Since the channels of distribution are often inadequate in developing countries, _____ stores are used to reach rural areas.

Correct Answer(s): a. mobile

684. ____ countries have little economic wealth and lack the resources necessary for development.

Correct Answer(s): a. Developing

Chapter 14 685. A tendency to view and value things based on one’s own cultural beliefs is called _____.

Correct Answer(s): a. ethnocentrism

686. The ethnic group projected to account for more than 30 percent of the U.S. population by 2050 is the _____ population.

Correct Answer(s): a. Hispanic-American

687. On the whole, _____ are an ethnic group that places a strong emphasis on family and education.

Correct Answer(s): a. Asian-Americans

688. Many individuals from Asian countries use the handshake when doing business in Western cultures but still appreciate someone who shows respect for their culture by _____ as a form of greeting.

Correct Answer(s): a. bowing

689. A(n) _____, such as the thumbs-up, can have different meanings in different cultures.

Correct Answer(s): a. gesture

690. A(n) _____ is an interpreter who converts a message from one language to another.

Correct Answer(s): a. translator

691. What are four basic factors a business should consider when creating a global marketing plan?

Correct Answer: Four basic factors to consider in global marketing are (1) culture, (2) demographics, (3) economic conditions, and (4) political environment.

692. Name three challenges faced by global marketers.

Chapter 14 Correct Answer: Three challenges faced by global marketers are (1) the frequent necessity of changing some (or all) of the marketing mix, whether that be product, distribution channels, price, and/or promotion strategies; (2) the availability of media options; and (3) advertising bans or regulations.

693. Many advertisements use visual diversity. What does this mean? What alternate method has been shown to be more effective in reaching specific ethnic audiences?

Correct Answer: Visual diversity simply means showing Americans of different races and ethnicities interacting in schools, workplaces, homes, and other venues while consuming the advertised product. A more effective method is culturally targeted advertisements. These ads show people who share the language, customs, values, and social views of the target market.

694. Explain how the use of personal space varies from culture to culture.

Correct Answer: Different cultures have different personal space requirements. In some cultures, people feel comfortable standing closer to each other and may be offended if you back away from them. In other cultures, people prefer greater interpersonal distances.

695. Why is it important for marketers to understand different cultures and their buying behaviors?

Correct Answer: Different cultures have different priorities and culturally related consumption preferences. Understanding their buying behaviors opens up many opportunities for U.S. businesses.

696. Why is a good translation important in global marketing?

Correct Answer: Advertising translation can make or break an ad campaign and, more importantly, the perception of the brand. Ideally, the translation will have a positive effect and result in increased brand awareness, but poor translations can have a negative effect that might be hard to overcome.

697. What are some ways in which international advertising may present challenges? What information do marketers need when planning an ad campaign in a foreign country?

Correct Answer: There are many different restrictions on international advertising, and they vary by country. Restrictions often reflect cultural values, so it is important to be aware of them, not only from a legal standpoint, but from

Chapter 14 the standpoint that violating cultural norms may be counterproductive.

Many countries have bans or restrictions on advertising for specific types of products or services, such as medications, tobacco, alcohol, gambling, and religion. Most countries also have some form of legislation that places restrictions on advertising to children.

In general, advertisers should have knowledge of (1) types of products that can be advertised, (2) types of message appeals that can be used, (3) times during which ads for certain products can be aired on television, (4) restrictions on the use of national symbols, such as the nation’s flag, and (5) kinds of data that can be collected from consumers through promotional campaigns.

698. Describe the changing demographics in the United States in terms of the growth of the African Americans, Asian Americans, and Hispanic Americans. How will this affect advertising in the next 10 to 20 years?

Correct Answer: These three ethnic groups are growing in the United States and currently comprise about one-third (34%) of the total U.S. market. That percentage will continue to grow over the next 10 to 20 years, with the fastest growth seen in the Asian-American and Hispanic-American markets. The African-American population is also growing, but at a slower pace. In all three of these ethnic groups, purchasing power has increased significantly over the last decade and is likely to increase over the next decade (or two).

These growing ethnic markets provide an opportunity for business, but also present challenges. Marketers must be able to target these subcultures with effective cross-cultural or culture-specific advertising campaigns. This requires a thorough understanding of differences in values, attitudes, and behaviors. Planning multicultural advertising is similar to planning global marketing campaigns in that advertisers must adjust the marketing mix carefully to fit each different country or culture.

699. Hispanic Americans currently represent over 16 percent of the U.S. population, and are projected to account for more than 30 percent of the population by 2050. What are some important facts about this market that advertisers should know?

Correct Answer: Studies have shown that Hispanic Americans are not becoming completely acculturated to the mainstream American culture. As a group, they choose to adopt some mainstream American customs while continuing to keep beliefs and behaviors of their culture of origin. For example, approximately 61 percent of bilingual Hispanic people prefer to speak Spanish in their homes.

This means that Spanish-language media is the key to connecting with the greatest number of Hispanic consumers.

In addition, marketing research has revealed the following about Hispanic consumers: (1) They use their smartphones for a wide range of mobile activities, (2) Internet usage among Hispanics in a recent year was approximately 65 percent, (3) They shop less frequently than other ethnicities but spend more on each trip, (4) They tend to spend more on

Chapter 14 baby-related products than the average U.S. consumer, (5) They spend more in supercenters, mass merchandisers, and warehouse clubs, (6) They spend more than the average U.S. consumer on ingredients used to cook from scratch, and (7) The top ten TV shows for Hispanics are all Spanish-language programs.

Telenovelas (Spanish soap operas) have a strong following.

700. Describe five general aspects of verbal communication that marketers should understand when communicating in another country, either face-to-face or through other verbal channels (such as e-mail).

Correct Answer: First, it must be understood that different cultures have different customs regarding who addresses whom, and when and how. Conversations are expected to be opened and closed in certain ways, or disrespect may be conveyed.

Marketers should research acceptable greetings; the importance of age, gender, or social position when speaking to others; and proper ways to end discussions.

Second, what is the conversational style regarding speaking and listening?

In some cultures, conversations are very interactive; one person speaks and then another person provides an immediate response. Interruptions may be tolerated, or merely interpreted as signs of eagerness and thought. In other cultures, interruptions are viewed as offensive and indicate that the speaker’s statements are being challenged.

Third, what is the use of silence? In the United States, long silences in a conversation make people feel uncomfortable. In some other cultures, silence is a sign of thoughtfulness toward the speaker and is expected before a response is given.

Fourth, what is the use of humor? Humor may be used to bond with new acquaintances in the United States; not all cultures view it this way. Some consider it a sign of disrespect. Humor can also lead to misunderstandings when the speaker doesn’t fully understand the culture.

Finally, is implicit or explicit communication preferred? Explicit communicators convey information in a concise, direct, and structured manner. They base decisions on logic and facts. This is more common in the United States. Implicit communicators convey information that may seem vague or that has an implied meaning. They base decisions on intuition and feelings more than on logic and strive for group harmony. Japan, China, and Mexico prefer this communication style. With implicit communication, how something is said--the speaker’s tone of voice, facial expression, gestures, and posture--matters more than what is actually said.

Chapter 15 701. Advertising and marketing jobs are among the highest paid jobs in most companies. *a. True b. False

702. The advertising industry tends to attract creative, social, fun-loving people from all sorts of backgrounds and cultures. *a. True b. False

703. Time management, organization, and interpersonal skills are some of the hard skills needed for a successful career in advertising. a. True *b. False

704. Writing and graphic design skills are typically more important than speaking and listening skills in an advertising career. a. True *b. False

705. In many cases, the corporate culture--including values, beliefs, and expected behaviors--will not be entirely clear to a new employee for weeks or possibly months. *a. True b. False

706. Working well with others and taking initiative on the job are key ways to be successful in almost any career. *a. True b. False

707. Workers doing the same job may qualify for different levels of pay depending on their age and their level of experience. a. True *b. False

708. For those who need time off to care for a new baby or an ill family member, employers with 25 or more workers are required to grant up to 12 weeks of unpaid leave a year.

Chapter 15 a. True *b. False

709. The Age Discrimination Act of 1999 extended protection against discrimination to include people between the ages of 40 and 65. a. True *b. False

710. A leader who empowers and encourages good performance is likely to be more successful than one who focuses on correcting poor performance. *a. True b. False

711. The greatest leaders have strong people skills. *a. True b. False

712. Nearly half of all employers (48 percent) have said they use their internship programs as a tool for recruiting entry-level employees. a. True *b. False

713. Establishing professional contacts and gaining work experience are two of the most important components in career development. *a. True b. False

714. In general, teamwork leads to a greater number of potential solutions, and more creative solutions, but may be a slower way to solve problems than working alone. a. True *b. False

715. Often, team members will take on informal roles themselves, which can help the team perform more effectively. *a. True b. False

716. Which of the following traits might NOT be a good fit in an advertising

Chapter 15 career? a. a love of movies and music b. a preference for a less structured environment *c. a preference for working alone d. a willingness to work hard for high compensation

717. Your _____ includes the unique skills and abilities that you bring to the job market. a. aptitude cluster b. skill profile c. career profile *d. skill set

718. Which of the following would be considered a soft skill? *a. problem-solving skills b. computer-related skills c. reading skills d. all of the above

719. Which of the following scenarios is an example of punctuality? a. Marisa makes an honest effort to complete her work to the best of her ability. *b. Andre always turns in his assignments on time--or even a day or two early. c. Colette is always willing to lend a hand when a job needs to be done--even if the job is not her direct responsibility. d. Darren loves learning and trying out new skills to be more efficient at work.

720. Which federal law prohibits different wage scales for equal work? a. the Family and Medical Leave Act of 1993 *b. the Equal Pay Act of 1963 c. the Age Discrimination Act of 1967 d. the Civil Rights Act of 1964

721. Unwelcome verbal or physical conduct in the workplace is called *a. harassment b. discrimination c. institutional bullying d. prejudice

722. Typically, good leaders will do all of the following EXCEPT

Chapter 15 a. communicate goals b. establish a positive work environment c. help resolve conflicts *d. tell each subordinate exactly how to get the job done

723. An individual who acts as a role model and provides training and advice to an employee is called a(n) a. intern *b. mentor c. sponsor d. job coach

724. Which type of workplace team brings members from various departments together to solve problems or complete tasks? a. specialized functional team b. interdepartmental team *c. cross-functional team d. problem-solving team

725. All of the following are benefits of workplace teams EXCEPT a. the problem-solving process is quicker b. teamwork results in improved productivity c. stronger relationships are established among employees *d. team members are restricted by their assigned roles

726. It has been estimated that about 45 percent of a manager’s time on the job is spent listening to others. If the manager of an advertising agency spent 10 hours at work today, how many minutes did she spend listening to clients and coworkers?

Correct Answer(s): a. 270

727. Raoul has resolved to improve his time management skills and eliminate unnecessary, time-wasting activities at work. He has determined that he can save 10 minutes each day by checking his e-mail less frequently; save 20 minutes each day by bringing his lunch to work instead of going out to eat; and save 15 minutes each day by delegating some tasks to others.

If Raoul makes all of these changes, how much time (in minutes) will he save in a typical five-day work week?

Correct Answer(s): a. 225

Chapter 15 728. The ABC Company illegally pays Katherine 15 percent less than Tyrone for doing the same job. If Tyrone earns $12.00 per hour for the job, how much is Katherine’s hourly wage?

Correct Answer(s): a. $10.20

729. According to the Americans with Disabilities Act (ADA), employers are required to make reasonable accommodations for employees with disabilities.

A recent survey indicated that 82 percent of employers think that ADA “is worth the cost of implementation” and found the accommodations made were quite effective.

If 450 employers were interviewed for this survey, how many thought ADA was “worth the cost of implementation”?

Correct Answer(s): a. 369

730. According to the Americans with Disabilities Act (ADA), employers are required to make reasonable accommodations for employees with disabilities.

A recent survey indicated that, of employers who made accommodations for employees with disabilities, 52 percent of them spent less than $500 on these accommodations.

If 450 employers made accommodations for employees with disabilities, how many spent less than $500 to do so?

Correct Answer(s): a. 234

731. _____ skills are a cluster of personal qualities, habits, attitudes, and social graces that enhance a person’s job performance.

Correct Answer(s): a. Soft

732. The act of budgeting time to increase efficiency and productivity is called _____.

Correct Answer(s): a. time management

733. _____ skills are often referred to as social skills or people skills and influence your interactions with others.

Correct Answer(s): a. Interpersonal

Chapter 15 734. An organization’s values, beliefs, and behaviors is referred to as its _____.

Correct Answer(s): a. corporate culture

735. An employee who is _____ has more skills than those required for his or her specific position.

Correct Answer(s): a. multifaceted

736. The _____ is the government agency that sets and enforces standards for safe and healthful working conditions.

Correct Answer(s): a. Occupational Safety and Health Administration b. OSHA

737. The act of treating one person less favorably than another person because of race, color, gender, religion, or national origin is called _____.

Correct Answer(s): a. discrimination

738. _____ means giving others substantial responsibility and freedom to make their own decisions.

Correct Answer(s): a. Empowering

739. _____ is the process of developing a broad list of contacts with other people, groups, or organizations.

Correct Answer(s): a. Networking

740. In the workplace, a(n) _____ is a small group of employees who work together to achieve a specific goal.

Correct Answer(s): a. team

741. What are four questions to ask yourself to determine if a career in

Chapter 15 advertising might be suitable for you?

Correct Answer: Answers will vary but should include four of the following: (1) Am I good at persuading and motivating people? (2) Do I like to show off my talents for an audience? (3) Do I enjoy working with creative people from all sorts of backgrounds? (4) Do I enjoy staying on top of trends? (5) Do I want to work in a flexible, less structured environment? (6) Do I enjoy social functions? (7) Am I interested in an international career? (8) Am I technologically savvy? and (9) Am I willing to work hard for a relatively high salary?

742. What is the difference between hearing and listening? Why is listening an important skill for advertising professionals?

Correct Answer: Hearing is a physical ability, while listening is an active process that assigns meaning to what another person is saying. Advertising professionals must be able to listen to their client’s needs to develop the best campaign to meet those needs.

743. Certain qualities are expected of any employee on the job, no matter how new or what their level of expertise. What are three such qualities?

Correct Answer: Answers will vary but should include three of the following: (1) be dependable, (2) be honest and trustworthy, (3) have a good attitude, (4) take initiative, and (5) work well with others.

744. Define workplace bullying.

Correct Answer: Workplace bullying refers to repeated, unreasonable actions of an individual (or a group) directed toward an employee (or group of employees) for the purpose of intimidating, degrading, humiliating, or undermining the employee.

745. What is leadership?

Correct Answer: Leadership is the ability to motivate and direct a group of people to achieve a common goal. Good leaders can have different styles and different personalities, but also share certain qualities such as a positive attitude, strong people skills, and good communication skills.

746. What might you learn from an informational interview?

Correct Answer: An informational interview involves talking to a human resource representative or manager of a company where you might like to work to obtain

Chapter 15 general information and advice about the company. It’s a great way to learn about career opportunities, typical career paths within the company, and desirable employee traits.

747. What speaking skills are typically necessary for a career in advertising? What interpersonal, or social, skills are important whether speaking or listening?

Correct Answer: When working in advertising, you must know how to give an effective presentation to clients and coworkers. You will often have to present ideas to others, and this type of public speaking is a fine art that improves with practice. Good speakers are knowledgeable about their topic and must project confidence. They are able to develop a presentation that is interesting, informative, relevant, and concise. They communicate in a clear, easy-to-understand format.

While presenting ideas starts with speaking, good speakers must also listen.

They invite members of their audience to ask questions and are at ease in answering those questions. All the while, they demonstrate energy and enthusiasm throughout their presentation.

In order to be a good speaker, certain underlying interpersonal skills are necessary. A good speaker knows that good social skills go a long way in developing positive working relationships with others. These relationships may be tested when ideas clash, so the underlying working relationship is crucial. Individuals who have good interpersonal skills are generally cheerful, cooperative, considerate, empathetic, and respectful. They are also good at speaking and listening, resolving conflicts, and recognizing others for a job well done.

748. In general, what does it mean to be a dependable and honest employee?

Correct Answer: In general, employees are expected to show up for work every day and do what they say they will do. In some cases, employees are expected to arrange for someone else to cover their workload in their absence. Good employees are punctual, meaning exactly on time or a little ahead of schedule.

Dependability also means employees can be counted on to follow directions and have their work done right, as well as having it done in a timely way.

Honest means just that: truthful with customers, clients, coworkers, and supervisors. Employees should make an honest effort to complete their work to the best of their abilities. This means admitting mistakes when they are made, without excuses, and often coming up with a way to fix those mistakes.

In addition, employees should follow company policy and take reasonable care of the company’s money, equipment, and other valuables.

749. Describe three basic rights that all employees are legally entitled to in any workplace.

Correct Answer: There are three basic rights that all employees have, by law, in any workplace

Chapter 15 in the United States: (1) a safe working environment, (2) fair and equal treatment, and (3) protection from discrimination and harassment.

By law, employers must provide safety equipment to employees working in construction zones or factories. Physically safe working conditions are an issue even in an office environment. For example, work areas must be well lit, air quality standards must be met, and meal times and breaks must be provided for employees working shifts of a certain length. All exits and aisles must be kept clear, doors must be unlocked from the inside, and employers are required to correct any safety problems that employees call to their attention.

Equality in the workplace is protected by several laws. The Equal Pay Act of 1963, for example, outlawed different wage scales for equal work. The Civil Rights Act of 1964 prohibited discrimination based on race or gender, and laws have further evolved to prohibit much discrimination based on religion, national origin, and age. The Americans with Disabilities Act was passed in 1990 to provide equal opportunities to individuals with disabilities. In 1993, the Family and Medical Leave Act was passed to provide some protection for those who temporarily take a leave of absence to care for a new baby or an ill family member.

Protection from harassment is another important, legally protected right for all employees in their workplace. Harassment based on gender, marital status, religion, age, disability, race, and sexual orientation is illegal.

In fact, any form of workplace bullying, for any reason, can be determined to have created a hostile working environment for the person (or group) that was bullied and may lead to dismissal from the company--and/or legal action--for the person (or group) found guilty of such charges.

750. In what ways can an internship be valuable for someone entering the advertising field?

Correct Answer: Competition for entry-level advertising jobs is intense. There are many more candidates than advertising positions, and an internship in the advertising field can give you a competitive edge. An internship can be any hands-on learning experience related to your career goals and interests. It may be paid or unpaid, and there are opportunities available to both high school and college students while they complete their education.

A good internship can provide many opportunities, including the chance to (1) acquire practical work experience relating to your career choice, (2) learn more about a specific industry or even a part of a field of interest, (3) identify and test your own interests, skills, and talents, (4) determine whether your interests match your skills, (5) develop professionalism and experience, (6) learn and improve specific skills such as communication, problem solving, teamwork, and leadership, (7) increase your marketability and value to employers, and (8) build a professional network.