True / False Questions
1. An objective is said to be measurable if it specifies a method and criteria for determining how well a program is working.
True False
2. Planners who view promotion from a communications perspective believe that the objective of advertising is to increase market share through sales.
True False
3. Managers generally believe that promotional spending represents an investment of a firm's resources that requires an economic justification.
True False
4. An advantage of sales-oriented objectives is that they provide sufficient guidance to those responsible for planning and developing the promotional program.
True False
5. The initial stages, at the base of the communications effects pyramid, are harder to accomplish than those toward the top, such as trial and repurchase.
True False
6. Critics of communications-oriented objectives argue that it is too difficult to translate a sales goal into a specific communications objective.
True False
7. Under the Defining Advertising Goals for Measured Advertising Results (DAGMAR) approach, an advertising goal involves a communications task that is specific and measurable.
True False
8. Repositioning of a product requires lesser time than creating or increasing the awareness levels for a brand.
True False
9. An inside-out planning process for integrated marketing communications (IMC) starts with the customer and builds backward to the brand.
True False
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10. While the social consumer decision journey may differ from traditional response hierarchies, it is also similar in that it envisions going through stages in the purchase decision.
True False
11. In the integrated marketing communications (IMC) model, the flow between the communications analysis and budget determination is a two-way interaction.
True False
12. When times get tough, managers who treat the communications budget as an investment instead of an expense tend to cut down the advertising and promotional budget first.
True False
13. There is strong, consistent evidence that cutting back on advertising does not hurt sales during and after a recession.
True False
14. Marginal analysis assumes that sales are a direct result of advertising and promotional expenditures and that this effect can be measured.
True False
15. According to the concave-downward function model, as the amount of advertising decreases, its incremental value increases.
True False
16. If sales is used as a direct measure of response to advertising, products characterized as largedollar purchases and those in the maturity or decline stages of the product would be less likely to benefit.
True False
17. In the top-down approach, the budgetary amount is established usually at the departmental level.
True False
18. In the arbitrary allocation approach, no systematic thinking occurs and no objectives are budgeted for.
True False
19. The competitive parity method takes advantage of the collective wisdom of the industry.
True False
20. In the objective and task method to budget setting, managers closest to the marketing effort do not have specific strategies to achieve the objective.
True False
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Multiple Choice Questions
21. One important purpose of setting specific advertising goals and objectives is to:
A. provide a benchmark against which performance can be measured.
B. put constraints on the creative department.
C. have a method of determining when to delete products from the product line.
D. forecast the market share level that can be attained by good advertising.
E. protect all investors and debt holders.
22. Arden's task is to determine what was accomplished by his company's advertising and promotional program for a vinyl-siding cleanser. We can tell him that:
A. his task is impossible.
B. all he needs is the sales results to determine what the program accomplished.
C. his task could be made easier by setting specific communication objectives.
D. he requires just the post-promotional consumer awareness levels to determine what the program accomplished.
E. all he needs to do is measure the effectiveness of the media used for promoting the product.
23. The more specific the firm's advertising objectives, the:
A. easier it becomes to measure advertising effectiveness.
B. more difficult it is for competitors' advertising to be effective.
C. easier it is to measure the advertising-sales response function.
D. lesser the funding needed to meet advertising goals.
E. more difficult it is for a competitor to use competitive parity budgeting.
24. Before setting objectives for advertising and promotion, an organization should:
A. conduct a situation analysis to identify marketing and promotional issues facing the firm.
B. develop its media plan and allocate the budget to each media.
C. evaluate the effectiveness of the advertising and promotional strategies.
D. conduct test marketing to check the effectiveness of the marketing strategies developed for the current products and services.
E. set its advertising and promotional budgets.
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25. Which of the following is true of marketing objectives?
A. The only aim of a firm's marketing objectives revolves around buying the right media at the right price.
B. They are usually defined in terms of specific outcomes such as sales volume, market share, profits, or return on investment.
C. They are stated only in a company's communication plan.
D. They are statements of what various aspects of the IMC program will accomplish and how a message will be delivered to the target audience.
E. The only aim of a firm's marketing objective is to communicate information or a selling message about a product or service to the target audience.
26. Which of the following statements best describes the relationship between marketing and communications objectives?
A. Marketing objectives and communications objectives are synonymous.
B. Marketing objectives evolve from communications objectives.
C. Communications objectives are derived from marketing objectives.
D. Communications objectives can be developed before the development of marketing objectives.
E. Both communications and marketing objectives are defined only in terms of the reach of a promotional strategy.
27. To be effective, marketing objectives need to be:
A. realistic and attainable.
B. erudite and challenging.
C. philosophical and fungible.
D. unquantifiable.
E. elaborate.
28. Many marketing managers prefer sales-oriented objectives for advertising because they believe that:
A. the reason a company spends money on advertising and promotion is to sell its products or service.
B. the objective of advertising and other promotional mix elements is usually to communicate information or a selling message about a product or service.
C. the primary role of an IMC program is to communicate.
D. objectives should be based on the achievement of communication objectives.
E. they must provide relevant information and create favorable predispositions toward the brand before purchase behavior will occur.
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29. The concept of advertising expenditures producing long-term, rather than immediate, results is known as:
A. the carryover effect.
B. the communication effect.
C. the low-involvement effect.
D. the halo effect.
E. the mirror-image effect.
30. The carryover effect:
A. has no impact on sales objectives.
B. has no effect on the relationship between advertising and sales.
C. encourages the use of nonspecific objectives.
D. is particularly apparent with mature, low-priced, and frequently purchased products.
E. helps in determining the precise relationship between advertising and sales.
31. Which of the following problems is a manager most likely to face if he uses sales as a measure of advertising effectiveness?
A. Sales results offer little guidance or direction to those responsible for planning and developing the advertising program.
B. There is a short, often immeasurable, time period between when advertising is run and when sales actually occur.
C. Sales results are affected by no marketing-mix variable other than price and promotion.
D. No internal-environmental variables have any significant influence on sales results.
E. Sales are generally not considered a good indicator for an IMC program.
32. For which of the following would an advertiser be most likely to use a sales-oriented objective?
A. A direct-response ad for a record album
B. A commercial for a new type of electric-powered automobile
C. A political announcement
D. An anti-drug public announcement
E. A commercial comparing two telecommunication giants
33. Direct-response advertisers generally set objectives and measure success in terms of:
A. brand awareness.
B. brand attitudes.
C. purchase intentions of the target audience.
D. sales response generated by an ad.
E. brand equity.
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34. Sales-oriented objectives are appropriate for:
A. all online-marketing strategies.
B. retail advertising promoting special events.
C. products that have been introduced in highly volatile markets.
D. any advertising campaign aimed at maintaining brand awareness.
E. bait-and-switch marketing campaigns.
35. Which of the following is at the base of the communication effects pyramid?
A. Awareness
B. Preference
C. Trial
D. Purchase
E. Repurchase
36. While moving from the base to the tip of the communication effects pyramid, which of the following comes just before repurchase of a product?
A. Awareness
B. Comprehension
C. Trial
D. Liking
E. Knowledge
37. While moving from the base to the tip of the communication effects pyramid, which of the following comes just before trial of a product?
A. Knowledge
B. Preference
C. Repurchase
D. Awareness
E. Comprehension
38. Managers who use the communications effects pyramid to set objectives believe that:
A. lower-level objectives such as purchase and reuse form the foundation of the communications program.
B. the foundation of the communications program is set by accomplishing lower-level objectives such as awareness, knowledge, and comprehension.
C. advertising and promotion should first accomplish lower-level objectives such as trial and purchase.
D. advertising and promotion should first accomplish higher-order objectives, such as trial and purchase, and then create awareness and brand knowledge.
E. advertising and promotion cannot accomplish lower-order objectives.
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39. Which of the following is at the top of the communication effects pyramid?
A. Awareness
B. Knowledge
C. Liking
D. Preference
E. Repurchase
40. Encouraging current buyers of Spirit, an energy drink, to drink more of the beverage would be an example of a _____ objective.
A. sales-oriented
B. repositioning
C. product development
D. public-relations
E. diversification
41. Which of the following statements is true of communications objectives?
A. It is difficult to translate sales goals into communications objectives.
B. It is always easy to determine the relationship between communications objectives and sales performance.
C. Communications objectives cannot serve as operational guidelines to the planning, execution, and evaluation of promotional programs.
D. All marketing and advertising managers accept communications objectives.
E. Precise formulas are to be followed when translating sales goals into specific communications objectives.
42. Which of the following is at the base of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?
A. Awareness
B. Purchase
C. Familiarity
D. Consideration
E. Imagery
43. Which of the following is at the top of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?
A. Awareness
B. Imagery
C. Consideration
D. Shopping
E. Model intention
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44. With respect to the stages in Russell Colley's hierarchical model of the communication process, the _____ stage deals with developing an understanding of what the product is and what it will do for the consumer.
A. conviction
B. comprehension
C. awareness
D. action
E. screening
45. The _____ stage in Russell Colley's hierarchical model of the communication process deals with informing consumers of the existence of the brand or company.
A. conviction
B. screening
C. comprehension
D. action
E. awareness
46. The _____ stage in Russell Colley's hierarchical model of the communication process deals with getting the consumer to purchase the product.
A. action
B. conviction
C. screening
D. comprehension
E. awareness
47. Which of the following statements is true of communications objectives?
A. When setting objectives using the communications effect pyramid, the last step to reach is trial.
B. Sales goals cannot be translated into communications objectives.
C. Marketing and advertising managers don't usually rely on experience and intuition when setting communications goals.
D. Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals.
E. Communication objectives are used particularly when the advertiser seeks an immediate response.
48. DAGMAR is:
A. a model for setting advertising goals.
B. a philosophy of consumer behavior.
C. a method of setting sales objectives.
D. a tool used to measure financial assets.
E. an attitude measurement device.
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49. _____ is an approach to setting advertising goals and objectives which states that communication effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
A. SOSTAC
B. The hierarchy of effects model
C. The BCG matrix
D. The Ansoff matrix
E. DAGMAR
50. According to DAGMAR, the basic function of advertising is to:
A. create sales.
B. communicate.
C. increase market share.
D. eliminate competition.
E. change consumer behavior.
51. Under the DAGMAR model, a _____ can be performed by, and attributed to, advertising rather than to a combination of marketing factors.
A. human resources task
B. financial task
C. communications task
D. marketing task
E. product production task
52. According to the criteria outlined in DAGMAR, which of the following makes the best quantitative communications objective?
A. "Increase product users to 40 percent of the total market."
B. "Double the production budget, hire more assembly workers, and double the production speed in one year."
C. "Increase the number of customers mentioning the brand name when asked for brand preference from 40 percent to 50 percent in one year."
D. "Increase awareness of the brand in one year."
E. "Increase sales revenue by 10 percent."
53. According to DAGMAR, advertising objectives should be written in measurable terms that specify:
A. a communications task, a target market, a benchmark starting point, a time period, and the degree of change sought.
B. a budget, a message strategy, a media plan, and the degree of carryover effect desired.
C. the reach, frequency, and point of wearout for the advertising messages.
D. the purchase motives, demographic composition, and buying habits of the target market.
E. sales potentials, market share, return on investment, and budget forecasts.
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54. According to the DAGMAR model, which of the following is a characteristic of a good objective?
A. A good objective is elaborative in nature.
B. A good objective specifies the target audience.
C. A good objective avoids specifying a time period.
D. A good objective specifies the current market share.
E. A good objective is based only on sales results.
55. An airline company set the following objective for its new advertising campaign: "To increase the percentage of consumers who know our fares are lower than the competitors' to 75 percent over the next six months." Using the criteria outlined by the DAGMAR approach to setting objectives, identify what is wrong with this objective.
A. It is not a concrete statement of what message the airline wants to communicate.
B. It does not contain a benchmark starting point and the degree of change sought.
C. It does not specify a specific time period for accomplishing the objective.
D. It does not specify a well-defined target audience.
E. It fails to utilize the IMC process.
56. Determining a target market's present level of awareness and knowledge of, and liking for, a product often requires _____ measures.
A. benchmark
B. sales interval
C. secondary
D. frequency
E. reach
57. Before beginning its new advertising campaign, Capital Bank conducted a study to determine its clients' levels of awareness and knowledge of the bank and its services, as well as their perceptions of the bank's image. This was done to:
A. communicate advertising goals.
B. communicate tasks.
C. establish benchmark measures.
D. communicate DAGMAR objectives.
E. establish marketing research goals.
58. For which of the following advertising communication tasks should the specified time period be the longest?
A. Creating brand awareness
B. Increasing brand awareness levels
C. Creating knowledge of a brand attribute
D. Increasing knowledge levels of a brand attribute
E. Repositioning a brand
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59. The DAGMAR approach to setting objectives has:
A. a negligible effect on the advertising planning process.
B. focused advertisers' attention on the value of using communications objectives rather than sales objectives.
C. never been criticized because it focuses on the hierarchy of effects model.
D. increased the degree of subjectivity used in the selection of objectives toward which planners' efforts should be directed.
E. been successful because it is easy to implement.
60. DAGMAR MOD II was developed to alleviate problems with:
A. the response hierarchy used in the original DAGMAR model.
B. the costs of using DAGMAR.
C. the fact that DAGMAR ignores sales results.
D. setting benchmark measures.
E. creating measurable communications objectives.
61. Which of the following is considered a major criticism of the DAGMAR approach?
A. Its belief that the only relevant measure of advertising objectives is sales.
B. Its focus on using sales-based objectives rather than communications-based objectives.
C. Its inability to define what constitutes a good advertising objective.
D. Its reliance on the hierarchy of effects model.
E. Its lack of concern with the quantitative assessment of the impact on awareness.
62. Robert is working in the advertising department of a large consumer-product company. He suggests that the company use the DAGMAR approach for setting advertising goals. Which of the following statements is Robert likely to hear as an argument against the use of the DAGMAR approach?
A. Communication should be the measure of advertising effectiveness rather than sales-oriented goals.
B. The DAGMAR approach is too creative and leads to difficulty in understanding.
C. DAGMAR can be quite expensive due to research costs and is, therefore, not suitable for large companies.
D. DAGMAR is too concerned with quantitative assessment of a campaign's impact on awareness.
E. DAGMAR is appropriate only in case of direct-response advertising.
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63. Creative executives from the advertising industry might oppose the DAGMAR approach to setting objectives because it:
A. puts too much emphasis on the quantitative assessment of an advertising campaign.
B. requires that speculative presentations be created and used to set benchmark measures.
C. is only successful if it develops a message that contributes to brand equity.
D. does not provide any type of communications guidelines.
E. is too concerned with qualitative assessments of an advertising campaign.
64. According to Professor Don Schultz, inside-out planning:
A. focuses on what the marketer wants to say, when he wants to say it, and the media he wants to use.
B. is another term for zero-based communications planning.
C. starts with the customer and builds backward to the brand when developing an IMC program.
D. is a method of implementing DAGMAR objectives.
E. is used to forecast the validity of DAGMAR objectives.
65. According to Professor Don Schultz, outside-in planning:
A. focuses on what the marketer wants to say, when the marketer wants to say it, things the marketer believes are important to his brand, and the media form the marketer wants to use.
B. is another term for zero-based communications planning.
C. starts with the customer and builds backward to the brand when developing an IMC program.
D. is a method of implementing DAGMAR objectives.
E. is used to forecast the validity of DAGMAR objectives.
66. _____ is an approach to integrated marketing communications planning that involves determining what tasks need to be done and which marketing communications planning functions should be used to accomplish them.
A. The objective/task pyramid
B. DAGMAR
C. The BCG matrix
D. Zero-based communications planning
E. Refutation planning
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67. According to Duncan's zero-based marketing communications planning approach:
A. advertising should always be the main tool for accomplishing marketing communications objectives.
B. sales promotion is usually the best tool for accomplishing marketing communications objectives.
C. big ideas for a promotional campaign are typically based on public relations, advertising, sales promotion, or media advertising.
D. integrated marketing communications programs should lead with the promotional function that least effectively addresses a company's communication problem or opportunity.
E. managers should focus on what the customer wants and work backward to the brand.
68. According to Don Schultz, in which type of communications planning process do the promotional planners study the various media customers and prospects use, when the marketer's messages might be most relevant to customers, and when customers are likely to be most receptive to the message?
A. Zero-based communications planning
B. Inside-out planning
C. Outside-planning
D. The carryover process
E. The recency process
69. In the social consumer decision journey, _____ deals with designing the communications program.
A. benchmarking
B. monitoring
C. amplification
D. leading
E. responding
70. In the social consumer decision journey, which of the following objectives is designed to take the consumer to long-term behavioral changes?
A. Respond
B. Amplify
C. Monitor
D. Lead
E. Benchmark
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71. In the social consumer decision journey, which of the following objectives deals with marketers reacting to specific issues regarding the product or brand at a personal level?
A. Monitor
B. Respond
C. Benchmark
D. Lead
E. Amplify
72. In the social consumer decision journey, which of the following objectives involves the marketer being aware of what is being said online about the product or brand to gain insights into how it is being perceived in the marketplace, and then respond accordingly?
A. Monitor
B. Benchmark
C. Lead
D. Respond
E. Amplify
73. According to the IMC planning model, the flow between communications analysis and budget determination is _____.
A. a two-way interaction
B. nonlinear
C. unidirectional
D. diagonal
E. top-down
74. According to Robert Steiner, which of the following terms is synonymous with contribution margin?
A. Asset allocation
B. Net worth
C. Financial optimization
D. Marginal analysis
E. Capital margin
75. In the case of the marginal-analysis approach, profits are shown to be a result of:
A. advertising expenditure minus sales.
B. sales minus advertising expenditures.
C. gross margin minus advertising expenditures.
D. gross margin minus sales.
E. net worth minus sales.
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76. Which of the following statements describes an inherent weakness in the use of the marginalanalysis model for establishing an advertising budget?
A. It is unsuitable as a basis for budgeting only in the case of direct response advertising.
B. It only considers environmental factors that affect the effectiveness of the promotional program.
C. The budget is often set according to the FIFO method.
D. The budget is determined by management solely on the basis of what is felt to be necessary.
E. It assumes that sales are determined solely by advertising and promotion.
77. The two models that are commonly used to explain the relationship between advertising and sales are the:
A. concave-downward function and the S-shaped response function.
B. S-shaped response function and the concave-upward function.
C. marginal utility function and the S-shaped demand function.
D. S-shaped demand function and the contribution margin function.
E. concave-upward function and the S-shaped demand function.
78. According to the _____ model, the effects of advertising budgets follow the microeconomics law of diminishing returns.
A. concave-upward
B. S-shaped demand
C. S-shaped response
D. marginal utility
E. concave-downward
79. According to the concave-downward function:
A. the incremental value of advertising increases.
B. creativity is the primary advertising function.
C. advertising is unlikely to be effective as a short-term solution.
D. as the amount of advertising increases, its incremental value decreases.
E. the effects of advertising do not diminish quickly.
80. The concave-downward function model is based on:
A. the microeconomics law of diminishing returns.
B. the economic law of supply and demand.
C. price elasticity of demand quotients.
D. the change in contribution margins as item price is changed.
E. perceptual mapping results.
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81. A marketing firm decides to purchase some media time in an attempt to sell its new product. After purchasing approximately $1 million worth of time, it notices no impact on the sales of the product. However, when it increases the media time to the value of $3 million, a substantial increase in sales is observed. This change is best explained by:
A. the concave-downward function.
B. the objective and task method.
C. the competitive parity method.
D. the S-shaped response function.
E. the DAGMAR model.
82. The S-shaped response function implies that:
A. initial advertising expenditures will have little impact on sales.
B. initial advertising expenditures will have major impact on sales.
C. sales effects will follow the microeconomic law of diminishing returns.
D. small advertising budgets have a high impact on sales when word of mouth is the only promotional tool used.
E. small advertising budgets have a high impact on sales when public relations is the only promotional tool used.
83. According to the concave-downward model:
A. the effects of advertising quickly begin to diminish.
B. the carryover effect is especially true for low-priced, frequently purchased consumer products.
C. sales decrease rapidly if the price is too high.
D. initial outlays of the advertising budget have little impact on sales.
E. sales are not directly related to the size of the advertising budget.
84. The S-shaped response curve suggests that:
A. advertising effectiveness will not be related to spending.
B. extremely low advertising budgets will not work.
C. advertising effectiveness will vary inversely with the spending levels.
D. the carryover effect is especially true for low-priced, frequently purchased consumer products.
E. sales and spending on advertising are not directly related.
85. Which of the following factors creates a positive relationship between advertising and sales?
A. The market share of the company
B. The corporate structure
C. The basis for product differentiation
D. The extent of selective retention
E. The recruitment plans
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86. According to the factors influencing advertising budgets, which of the following stages of a product lifecycle negatively influences the advertising budget?
A. Introduction
B. Maturity
C. Growth
D. Reinvestment
E. Research
87. According to the factors influencing advertising budgets, which of the following stages of a product lifecycle leads to a positive effect of advertising on sales?
A. Alteration
B. Maturity
C. Introduction
D. Decline
E. Harvesting
88. Which of the following strategy factors leads to a positive effect of advertising on sales?
A. Hidden product qualities
B. Elasticity in demand
C. Long channels of distribution
D. Emotional buying motives
E. Inelastic product demand
89. When higher-level executives determine the budget amounts to be allocated for each department's advertising expenditures, a _____ approach is being used.
A. nominal group
B. marginal contribution
C. top-down
D. Delphi
E. focus group
90. The _____ method of budgeting is being employed when expenditure is allocated by an analysis of expenditure in areas such as production and operations, and the amount left over is considered to be the advertising budget.
A. arbitrary allocation
B. percentage of sales
C. affordable
D. return on investment
E. competitive parity
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91. According to the promotional budgeting approaches, which of the following is an example of a topdown approach?
A. The razor and blades method
B. The bricks and clicks method
C. The competitive parity method
D. The objective and task method
E. The payout planning method
92. We know that the _____ method of budgeting is being employed when an experienced marketing manager responds to a new employee's question, "How was the ad budget established last year?" by saying, "The same way it's always been done; I just have an instinct about how much should be budgeted where."
A. arbitrary allocation
B. percentage of sales
C. contribution margin
D. return on investment
E. competitive parity
93. Which top-down budgeting method is being employed when the budget is determined based on what is felt to be necessary?
A. Arbitrary allocation
B. Percentage of sales
C. Affordable method
D. Payout planning
E. Competitive parity
94. Which of the following is true of the arbitrary allocation method?
A. This method is not considered to be particularly weak.
B. This method keeps ad spending within reasonable limits.
C. This method uses a logical basis for determining the budgets.
D. This method of budgeting is generally stable.
E. This method has no obvious advantages.
95. The most commonly utilized method of budget determination by large firms is the:
A. competitive parity method.
B. objective and task method.
C. percentage of sales method.
D. arbitrary allocation method.
E. affordable method.
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96. The _____ method of budgeting is being employed when expenditures are allocated by assigning a fixed amount of the unit product cost to promotion and multiplying this amount by the number of units sold.
A. arbitrary allocation
B. percentage of sales
C. objective and task
D. return on investment
E. competitive parity
97. In the _____ method to budgeting, sales are projected for the coming year based on the marketing manager's estimates.
A. competitive parity
B. objective and task
C. unit cost production
D. straight-percentage
E. arbitrary
98. Which of the following budgeting procedures would be used if a firm wanted a method that is simple to understand, easy to implement, financially safe, and keeps the spending within reasonable limits?
A. Competitive parity
B. Marginal analysis
C. Percentage of sales
D. Objective and task
E. Arbitrary
99. Which of the following is true of the percentage-of-sales method?
A. It is financially unsafe.
B. It is tough to implement.
C. It is simple and straightforward.
D. It is synonymous with the arbitrary allocation method.
E. It is synonymous with the affordable method.
100.Which of the following is a major problem associated with the percentage-of-sales method?
A. It reverses the cause-and-effect relationship between advertising and sales.
B. It is financially unsafe.
C. It is extremely tough to implement.
D. It is used only by firms that do not understand the role of advertising and promotions.
E. It has no theoretical basis, and the budgetary amount is often set using a flat-rate.
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101.To set an advertising budget, a marketer of filing cabinets examines advertising-to-sales ratios published in trade magazines and then allocates a percentage of sales dollars to the advertising effort. Which two budgeting methods are being employed?
A. Competitive parity and percentage-of-sales methods
B. Competitive parity and payout planning methods
C. Payout planning and percentage-of-sales methods
D. Percentage-of-sales and objective and task methods
E. Payout planning and arbitrary allocation methods
102.The _____ budgetary allocation method is designed to promote stability and minimize marketing warfare as well as take advantage of the collective wisdom of the industry.
A. ROI
B. affordable
C. percentage of sales
D. competitive parity
E. objective and task
103.When using the competitive parity method to budgeting, the firm:
A. matches its percentage-of-sales expenditures with those of others in the market/industry.
B. spends as much as it can.
C. allocates some portion of planned sales for the period to advertising.
D. spends the same total amount as its major competitors spend.
E. bases its advertising and promotion expenditures on sales.
104.Which of the following budgeting methods requires a marketing manager to use input from a clipping service?
A. ROI method
B. Arbitrary allocation method
C. Percentage-of-sales method
D. Competitive parity method
E. Objective and task method
105.The _____ method of budgeting is being employed when expenditures are allocated based on the industry averages of advertising expenditures. The budget is set to maintain a level consistent with industry spending.
A. arbitrary allocation
B. percentage-of-sales
C. objective and task
D. return on investment
E. competitive parity
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106.Which of the following is an advantage of the competitive parity method?
A. It makes use of the buildup approach to establishment of promotional budgets.
B. It leads to stability in the marketplace by minimizing marketing warfare.
C. It is based on the fact that advertising and promotions are designed to accomplish specific objectives by addressing certain problems and opportunities.
D. It gives due recognition to the contributions of creative executions and/or media allocations.
E. Under this method, the budget is driven by the objectives to be attained.
107.A disadvantage of the _____ method is its assumption that the programs of firms with similar promotional expenditures will be equally effective.
A. return on investment
B. affordable
C. competitive parity
D. objective and task
E. payout planning
108.In the _____ method of budget determination, advertising is considered an investment, similar to plant and equipment.
A. payout planning
B. objective and task
C. ROI budgeting
D. competitive parity
E. percentage-of-sales
109.Top-down budgeting methods are commonly used because of:
A. their effectiveness.
B. the upper management's desire for control.
C. the growing availability of computer simulations.
D. the ease with which a manager can assess the impact of sales on ROI.
E. their quantitative nature.
110.Which of the following allocation methods makes use of a buildup approach to setting budgets?
A. Percentage-of-sales
B. Arbitrary allocation
C. Competitive parity
D. Objective and task
E. Affordable
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111.Defining the communications goals to be accomplished and estimating the costs associated with the performance of the necessary strategies and activities are steps in the _____ method of budgeting.
A. competitive parity
B. payout planning
C. ROI
D. return on investment
E. objective and task
112.The first task in the objective and task method of budgeting is to:
A. conduct a system analysis.
B. create an organizational budget.
C. isolate advertising objectives.
D. determine what tasks need to be accomplished.
E. reevaluate objectives.
113.According to James O. Peckham, which of the following statements provides a good rule of thumb for a company setting the advertising budget for a new product?
A. Its advertising budget should be twice the desired market share.
B. Its advertising budget should be equal to that of the largest market shareholder in the product category.
C. Its advertising budget should be as much as the firm can afford.
D. Its advertising budget should be ten percent greater than the average budget planned for the entire payout period.
E. Its advertising budget should be less than that needed to maintain the desired market share.
114.The objective and task method is most difficult to use when:
A. the product to be promoted is intangible and in the maturity stage of its product life cycle.
B. the product to be promoted is in the decline stage of its product life cycle.
C. the product to be promoted is a cash cow.
D. the product to be promoted is new to the market.
E. the product is typically tied to after-sales service.
115.A(n) _____ is a method for allocating budgets that is designed to determine the investment value of the advertising appropriation.
A. payout plan
B. instant rebate
C. profit chart
D. beat-sheet
E. incentive program
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116.As a tool for budget allocation, multiple regression analysis is most often employed in budget models using:
A. computer simulations.
B. competitive parity.
C. arbitrary allocations.
D. percentage-of-sales.
E. downward curves.
117.Which of the following is a quantitative model to budgeting advertising expenditures?
A. ROI budgeting model
B. Competitive parity model
C. Computer simulation model
D. Arbitrary allocation model
E. Percentage-of-sales model
118.As a result of economies of scale, smaller advertisers:
A. are likely to enjoy more favorable advertising time and space than large advertisers.
B. have declining average costs of production.
C. get higher advertising rates than large advertisers.
D. can maintain advertising expenditure shares that are smaller than their market shares.
E. can accrue the advantages of advertising several products jointly.
119.As a result of _____, large advertisers can maintain advertising expenditure shares that are smaller than their market shares because they get lower advertising rates and accrue the advantages of advertising several products jointly.
A. economies of scale
B. differential advertising advantages
C. competitive parity
D. a concave-downward response
E. multiple advertising channels
120.As a result of economies of scale, large advertisers:
A. are likely to enjoy more favorable advertising time and space than smaller advertisers.
B. get lower advertising rates than smaller advertisers.
C. accrue the disadvantages of advertising several products jointly.
D. have higher average costs of production.
E. must spend more money on advertising to realize a better return.
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Chapter 07 Establishing Objectives and Budgeting for the Promotional Program Answer Key
True / False Questions
1. An objective is said to be measurable if it specifies a method and criteria for determining how well a program is working.
One characteristic of good objectives is that they are measurable; they specify a method and criteria for determining how well the promotional program is working. By setting specific and meaningful objectives, the promotional planner provides a measure(s) that can be used to evaluate the effectiveness of the marketing communications program.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-01 To recognize the importance and value of setting specific objectives for advertising and promotion.
Topic: The Value of Objectives
2. Planners who view promotion from a communications perspective believe that the objective of advertising is to increase market share through sales.
Many planners approach promotion from a communications perspective and believe that the objective of advertising and other promotional-mix elements is usually to communicate information or a selling message about a product or service. Other managers argue that sales or some related measure, such as market share, is the only meaningful goal for advertising and promotion and should be the basis for setting objectives.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-02 To understand the role objectives play in the IMC planning process and the relationship of promotional objectives to marketing objectives.
Topic: Determining Integrated Marketing Communications Objectives
3. Managers generally believe that promotional spending represents an investment of a firm's resources that requires an economic justification.
Promotional spending represents an investment of a firm's resources that requires an economic justification. Managers generally compare investment options on a common financial basis, such as return on investment (ROI).
AACSB: Analytic
Accessibility: Keyboard Navigation
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
7-24
TRUE
FALSE
TRUE
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-03 To know the differences between sales and communications objectives and the issues regarding the use of each.
Topic: Sales Versus Communications Objectives
4. An advantage of sales-oriented objectives is that they provide sufficient guidance to those responsible for planning and developing the promotional program.
One problem with sales objectives is that they offer little guidance to those responsible for planning and developing the promotional program. The creative and media people working on the account need some direction as to the nature of the advertising message the company hopes to communicate, the intended audience, and the particular effect or response sought.
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
5. The initial stages, at the base of the communications effects pyramid, are harder to accomplish than those toward the top, such as trial and repurchase.
The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid (or down the funnel).
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
6. Critics of communications-oriented objectives argue that it is too difficult to translate a sales goal into a specific communications objective.
Not all marketing and advertising managers accept communications objectives; they say that it is too difficult to translate a sales goal into a specific communications objective.
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
7-25
FALSE
FALSE
TRUE
7. Under the Defining Advertising Goals for Measured Advertising Results (DAGMAR) approach, an advertising goal involves a communications task that is specific and measurable.
TRUE
Under the DAGMAR approach, an advertising goal involves a communications task that is specific and measurable. A communications task, as opposed to a marketing task, can be performed by, and attributed to, advertising rather than to a combination of several marketing factors.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
8. Repositioning of a product requires lesser time than creating or increasing the awareness levels for a brand. FALSE
Awareness levels for a brand can be created or increased fairly quickly through an intensive media schedule of widespread, repetitive advertising to the target audience. Repositioning of a product requires a change in consumers' perceptions and takes much more time.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
9. An inside-out planning process for integrated marketing communications (IMC) starts with the customer and builds backward to the brand. FALSE
Inside-out planning process begins with the marketer. It focuses on what the marketer wants to say, when the marketer wants to say it, and about things the marketer believes are important. An outside-in planning process for IMC starts with the customer and builds backward to the brand.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Problems in Setting Objectives
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
7-26
10. While the social consumer decision journey may differ from traditional response hierarchies, it is also similar in that it envisions going through stages in the purchase decision.
TRUE
While the social consumer decision journey may differ from traditional response hierarchies, it is also similar in that it envisions going through stages in the purchase decision. Like traditional model, marketers need to take specific marketing actions to help the consumer along through the process.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Problems in Setting Objectives
11. In the integrated marketing communications (IMC) model, the flow between the communications analysis and budget determination is a two-way interaction.
TRUE
In the IMC planning model, flow of the processes is unidirectional, while the flow between the communications analysis and budget determination is a two-way interaction. What this means is that while establishing objectives is an important part of the planning process, the limitations of the budget are important too.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-05 To understand the process of budgeting for IMC.
Topic: Establishing and Allocating the Promotional Budget
12. When times get tough, managers who treat the communications budget as an investment instead of an expense tend to cut down the advertising and promotional budget first. FALSE
Most managers treat the communications budget as an expense rather than an investment. As a result, when times get tough, the advertising and promotional budget is the first to be cut even though there is strong evidence that exactly the opposite should occur.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Objective: 07-05 To understand the process of budgeting for IMC.
Topic: Establishing and Allocating the Promotional Budget
7-27
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13. There is strong, consistent evidence that cutting back on advertising does not hurt sales during and after a recession.
FALSE
There is strong, consistent evidence that cutting back on advertising can hurt sales during and after a recession.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Objective: 07-06 To understand theoretical issues involved in budget setting.
Topic: Establishing and Allocating the Promotional Budget
14. Marginal analysis assumes that sales are a direct result of advertising and promotional expenditures and that this effect can be measured.
TRUE
While marginal analysis seems logical intuitively, certain weaknesses limit its usefulness. These weaknesses include the assumptions that (1) sales are a direct result of advertising and promotional expenditures and this effect can be measured and (2) advertising and promotion are solely responsible for sales.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Objective: 07-06 To understand theoretical issues involved in budget setting.
Topic: Establishing and Allocating the Promotional Budget
15. According to the concave-downward function model, as the amount of advertising decreases, its incremental value increases.
FALSE
The effects of advertising budgets follow the microeconomic law of diminishing returns. As the amount of advertising increases, its incremental value decreases. The logic is that those with the greatest potential to buy will likely act on the first (or earliest) exposures, while those less likely to buy are not likely to change as a result of the advertising.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Objective: 07-06 To understand theoretical issues involved in budget setting.
Topic: Establishing and Allocating the Promotional Budget
7-28
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16. If sales is used as a direct measure of response to advertising, products characterized as large-dollar purchases and those in the maturity or decline stages of the product would be less likely to benefit. TRUE
A weakness in attempting to use sales as a direct measure of response to advertising is that various situational factors may have an effect. Products characterized as large-dollar purchases and those in the maturity or decline stages of the product would be less likely to benefit.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-06 To understand theoretical issues involved in budget setting.
Topic: Establishing and Allocating the Promotional Budget
17. In the top-down approach, the budgetary amount is established usually at the departmental level. FALSE
In top-down approaches, budgetary amount is established usually at an executive level and then the monies are passed down to the various departments. These budgets are essentially determined and have no true theoretical basis.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-07 To know various methods of budget setting.
Topic: Establishing and Allocating the Promotional Budget
18. In the arbitrary allocation approach, no systematic thinking occurs and no objectives are budgeted for. TRUE
The arbitrary allocation approach has no obvious advantages. No systematic thinking has occurred, no objectives have been budgeted for, and the concept and purpose of advertising and promotion have been largely ignored.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Objective: 07-07 To know various methods of budget setting.
Topic: Establishing and Allocating the Promotional Budget
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7-29
19. The competitive parity method takes advantage of the collective wisdom of the industry.
TRUE
In the competitive parity method, managers establish budget amounts by matching the competition's percentage-of-sales expenditures. The argument is that setting budgets in this fashion takes advantage of the collective wisdom of the industry.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-07 To know various methods of budget setting.
Topic: Establishing and Allocating the Promotional Budget
20. In the objective and task method to budget setting, managers closest to the marketing effort do not have specific strategies to achieve the objective.
FALSE
The major advantage of the objective and task method is that the budget is driven by the objectives to be attained. The managers closest to the marketing effort will have specific strategies and input into the budget-setting process.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-07 To know various methods of budget setting.
Topic: Establishing and Allocating the Promotional Budget
Multiple Choice Questions
21. One important purpose of setting specific advertising goals and objectives is to:
A. provide a benchmark against which performance can be measured.
B. put constraints on the creative department.
C. have a method of determining when to delete products from the product line.
D. forecast the market share level that can be attained by good advertising.
E. protect all investors and debt holders.
An important reason for setting specific objectives is that they provide a benchmark against which the success or failure of the promotional campaign can be measured. Without specific objectives, it is extremely difficult to determine what the firm's advertising and promotion efforts accomplished.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
7-30
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Learning Objective: 07-01 To recognize the importance and value of setting specific objectives for advertising and promotion.
Topic: The Value of Objectives
22. Arden's task is to determine what was accomplished by his company's advertising and promotional program for a vinyl-siding cleanser. We can tell him that:
A. his task is impossible.
B. all he needs is the sales results to determine what the program accomplished.
C. his task could be made easier by setting specific communication objectives.
D. he requires just the post-promotional consumer awareness levels to determine what the program accomplished.
E. all he needs to do is measure the effectiveness of the media used for promoting the product.
In the above example, we can tell Arden that his task could be made easier by setting specific communication objectives. An important reason for setting specific objectives is that they provide a benchmark against which the success or failure of the promotional campaign can be measured. By setting specific and meaningful objectives, the promotional planner provides a measure(s) that can be used to evaluate the effectiveness of the marketing communications program.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 07-01 To recognize the importance and value of setting specific objectives for advertising and promotion.
Topic: The Value of Objectives
23. The more specific the firm's advertising objectives, the:
A. easier it becomes to measure advertising effectiveness.
B. more difficult it is for competitors' advertising to be effective.
C. easier it is to measure the advertising-sales response function.
D. lesser the funding needed to meet advertising goals.
E. more difficult it is for a competitor to use competitive parity budgeting.
By setting specific and meaningful objectives, the promotional planner provides a measure(s) that can be used to evaluate the effectiveness of the marketing communications program.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-01 To recognize the importance and value of setting specific objectives for advertising and promotion.
Topic: The Value of Objectives
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24. Before setting objectives for advertising and promotion, an organization should:
A. conduct a situation analysis to identify marketing and promotional issues facing the firm.
B. develop its media plan and allocate the budget to each media.
C. evaluate the effectiveness of the advertising and promotional strategies.
D. conduct test marketing to check the effectiveness of the marketing strategies developed for the current products and services.
E. set its advertising and promotional budgets.
Integrated marketing communications objectives should be based on a thorough situation analysis that identifies the marketing and promotional issues facing the company or a brand. The situation analysis is the foundation on which marketing objectives are determined and the marketing plan is developed.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-02 To understand the role objectives play in the IMC planning process and the relationship of promotional objectives to marketing objectives.
Topic: Determining Integrated Marketing Communications Objectives
25. Which of the following is true of marketing objectives?
A. The only aim of a firm's marketing objectives revolves around buying the right media at the right price.
B. They are usually defined in terms of specific outcomes such as sales volume, market share, profits, or return on investment.
C. They are stated only in a company's communication plan.
D. They are statements of what various aspects of the IMC program will accomplish and how a message will be delivered to the target audience.
E. The only aim of a firm's marketing objective is to communicate information or a selling message about a product or service to the target audience.
Marketing objectives are generally stated in the firm's marketing plan and are statements of what is to be accomplished by the overall marketing program within a given time period. Marketing objectives are usually defined in terms of specific, measurable outcomes such as sales volume, market share, profits, or return on investment.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-02 To understand the role objectives play in the IMC planning process and the relationship of promotional objectives to marketing objectives.
Topic: Determining Integrated Marketing Communications Objectives
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26. Which of the following statements best describes the relationship between marketing and communications objectives?
A. Marketing objectives and communications objectives are synonymous.
B. Marketing objectives evolve from communications objectives.
C. Communications objectives are derived from marketing objectives.
D. Communications objectives can be developed before the development of marketing objectives.
E. Both communications and marketing objectives are defined only in terms of the reach of a promotional strategy.
Managers must be able to translate general marketing goals into communications goals and specific promotional objectives. Sometimes companies do not have a formal marketing plan, and the information needed may not be readily available. In this case, the promotional planner must attempt to gather as much information as possible about the product and its markets from sources both inside and outside the company.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-02 To understand the role objectives play in the IMC planning process and the relationship of promotional objectives to marketing objectives.
Topic: Determining Integrated Marketing Communications Objectives
27. To be effective, marketing objectives need to be:
A. realistic and attainable.
B. erudite and challenging.
C. philosophical and fungible.
D. unquantifiable.
E. elaborate.
Good marketing objectives are quantifiable; they delineate the target market and note the time frame for accomplishing the goal (often one year). To be effective, objectives must also be realistic and attainable.
AACSB: Analytic Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-02 To understand the role objectives play in the IMC planning process and the relationship of promotional objectives to marketing objectives.
Topic: Determining Integrated Marketing Communications Objectives
7-33
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28
Many marketing managers prefer sales-oriented objectives for advertising because they believe that:
A. the reason a company spends money on advertising and promotion is to sell its products or service.
B. the objective of advertising and other promotional mix elements is usually to communicate information or a selling message about a product or service.
C. the primary role of an IMC program is to communicate.
D. objectives should be based on the achievement of communication objectives.
E. they must provide relevant information and create favorable predispositions toward the brand before purchase behavior will occur.
To many managers, the only meaningful objective for their promotional program is sales. They take the position that the basic reason a firm spends money on advertising and promotion is to sell its product or service.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-03 To know the differences between sales and communications objectives and the issues regarding the use of each.
Topic: Sales Versus Communications Objectives
29. The concept of advertising expenditures producing long-term, rather than immediate, results is known as:
A. the carryover effect.
B. the communication effect.
C. the low-involvement effect.
D. the halo effect.
E. the mirror-image effect.
Many experts recognize that advertising has a lagged or carryover effect; monies spent on advertising do not necessarily have an immediate impact on sales. Advertising may create awareness, interest, and/or favorable attitudes toward a brand, but these feelings will not result in an actual purchase until the consumer enters the market for the product, which may occur later.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
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30. The carryover effect:
A. has no impact on sales objectives.
B. has no effect on the relationship between advertising and sales.
C. encourages the use of nonspecific objectives.
D. is particularly apparent with mature, low-priced, and frequently purchased products.
E. helps in determining the precise relationship between advertising and sales.
A review of econometric studies that examined the duration of cumulative advertising effects found that for mature, frequently purchased, low-priced products, advertising's effect on sales lasts up to nine months. Models have been developed to account for the carryover effect of advertising and to help determine the long-term effect of advertising on sales. The carryover effect adds to the difficulty of determining the precise relationship between advertising and sales.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
31. Which of the following problems is a manager most likely to face if he uses sales as a measure of advertising effectiveness?
A. Sales results offer little guidance or direction to those responsible for planning and developing the advertising program.
B. There is a short, often immeasurable, time period between when advertising is run and when sales actually occur.
C. Sales results are affected by no marketing-mix variable other than price and promotion.
D. No internal-environmental variables have any significant influence on sales results.
E. Sales are generally not considered a good indicator for an IMC program.
One problem with sales objectives is that they offer little guidance to those responsible for planning and developing the promotional program. The creative and media people working on the account need some direction as to the nature of the advertising message the company hopes to communicate, the intended audience, and the particular effect or response sought.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
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32. For which of the following would an advertiser be most likely to use a sales-oriented objective?
A. A direct-response ad for a record album
B. A commercial for a new type of electric-powered automobile
C. A political announcement
D. An anti-drug public announcement
E. A commercial comparing two telecommunication giants
In the above scenario, an advertiser would most likely use a sales-oriented objective for a record album's direct-response ad. Direct-response advertising is one type of advertising that evaluates its effectiveness on the basis of sales. Certain types of promotion efforts are direct action in nature; they attempt to induce an immediate behavioral response from the prospective customer. A major objective of most sales promotion programs is to generate short-term increases in sales.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
33. Direct-response advertisers generally set objectives and measure success in terms of:
A. brand awareness.
B. brand attitudes.
C. purchase intentions of the target audience.
D. sales response generated by an ad.
E. brand equity.
Direct-response advertising is one type of advertising that evaluates its effectiveness on the basis of sales. The direct-response advertiser generally sets objectives and measures success in terms of the sales response generated by the ad.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
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34. Sales-oriented objectives are appropriate for:
A. all online-marketing strategies.
B. retail advertising promoting special events.
C. products that have been introduced in highly volatile markets.
D. any advertising campaign aimed at maintaining brand awareness.
E. bait-and-switch marketing campaigns.
Retail advertising, which accounts for a significant percentage of all advertising expenditures, is one area where the advertiser often seeks an immediate response, particularly when sales or special events are being promoted.
AACSB: Analytic Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
35. Which of the following is at the base of the communication effects pyramid?
A. Awareness
B. Preference
C. Trial
D. Purchase
E. Repurchase
Awareness is at the base of the communications pyramid. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
7-37
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
36. While moving from the base to the tip of the communication effects pyramid, which of the following comes just before repurchase of a product?
A. Awareness
B. Comprehension
C. Trial
D. Liking
E. Knowledge
While moving from the base to the tip of the communication effects pyramid, trial comes just before repurchase of a product. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
AACSB: Analytic
Accessibility: Keyboard Navigation Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
37. While moving from the base to the tip of the communication effects pyramid, which of the following comes just before trial of a product?
A. Knowledge
B. Preference
C. Repurchase
D. Awareness
E. Comprehension
While moving from the base to the tip of the communication effects pyramid, preference comes just before trial of a product. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
7-38
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
38. Managers who use the communications effects pyramid to set objectives believe that:
A. lower-level objectives such as purchase and reuse form the foundation of the communications program.
B. the foundation of the communications program is set by accomplishing lower-level objectives such as awareness, knowledge, and comprehension.
C. advertising and promotion should first accomplish lower-level objectives such as trial and purchase.
D. advertising and promotion should first accomplish higher-order objectives, such as trial and purchase, and then create awareness and brand knowledge.
E. advertising and promotion cannot accomplish lower-order objectives.
Advertising and promotion perform communications tasks in the same way that a pyramid is built, by first accomplishing lower-level objectives such as awareness and knowledge or comprehension.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
39. Which of the following is at the top of the communication effects pyramid?
A. Awareness
B. Knowledge
C. Liking
D. Preference
E. Repurchase
Repurchase is at the top of the communication effects pyramid. The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid.
AACSB: Analytic Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
7-39
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
40. Encouraging current buyers of Spirit, an energy drink, to drink more of the beverage would be an example of a _____ objective.
A. sales-oriented
B. repositioning
C. product development
D. public-relations
E. diversification
The above scenario is an example of a sales-oriented objective. Sales oriented objectives include: 1) Increasing the percentage of consumers in the target market who associate specific features, benefits, or advantages with our brand, 2) Encouraging current users of the product to use it more frequently or in more situations etc.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
41. Which of the following statements is true of communications objectives?
A. It is difficult to translate sales goals into communications objectives.
B. It is always easy to determine the relationship between communications objectives and sales performance.
C. Communications objectives cannot serve as operational guidelines to the planning, execution, and evaluation of promotional programs.
D. All marketing and advertising managers accept communications objectives.
E. Precise formulas are to be followed when translating sales goals into specific communications objectives.
Not all marketing and advertising managers accept communications objectives; some say it is too difficult to translate a sales goal into a specific communications objective. But at some point a sales goal must be transformed into a communications objective.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
7-40
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
42. Which of the following is at the base of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?
A. Awareness
B. Purchase
C. Familiarity
D. Consideration
E. Imagery
Purchase is at the base of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
43. Which of the following is at the top of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?
A. Awareness
B. Imagery
C. Consideration
D. Shopping
E. Model intention
Awareness is at the top of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: Sales Versus Communications Objectives
7-41
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
44. With respect to the stages in Russell Colley's hierarchical model of the communication process, the _____ stage deals with developing an understanding of what the product is and what it will do for the consumer.
A. conviction
B. comprehension
C. awareness
D. action
E. screening
Colley proposed that the communications task be based on a hierarchical model of the communication process with four stages. With respect to the stages in Russell Colley's hierarchical model of the communication process, the comprehension stage deals with developing an understanding of what the product is and what it will do for the consumer.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
45. The _____ stage in Russell Colley's hierarchical model of the communication process deals with informing consumers of the existence of the brand or company.
A. conviction
B. screening
C. comprehension
D. action
E. awareness
Colley proposed that the communications task be based on a hierarchical model of the communication process with four stages. The awareness stage deals with making the consumer aware of the existence of the brand or company.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
7-42
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
46. The _____ stage in Russell Colley's hierarchical model of the communication process deals with getting the consumer to purchase the product.
A. action
B. conviction
C. screening
D. comprehension
E. awareness
Colley proposed that the communications task be based on a hierarchical model of the communication process with four stages. With respect to the stages in Russell Colley's hierarchical model of the communication process, the action stage deals with getting the consumer to purchase the product.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
47. Which of the following statements is true of communications objectives?
A. When setting objectives using the communications effect pyramid, the last step to reach is trial.
B. Sales goals cannot be translated into communications objectives.
C. Marketing and advertising managers don't usually rely on experience and intuition when setting communications goals.
D. Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals.
E. Communication objectives are used particularly when the advertiser seeks an immediate response.
Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals and objectives, which has become one of the most influential approaches to the advertising planning process.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
7-43
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
48. DAGMAR is:
A. a model for setting advertising goals.
B. a philosophy of consumer behavior.
C. a method of setting sales objectives.
D. a tool used to measure financial assets.
E. an attitude measurement device.
Colley developed the DAGMAR model for setting advertising objectives and measuring the results of an ad campaign. The major thesis of this model is that communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
49. _____ is an approach to setting advertising goals and objectives which states that communication effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
A. SOSTAC
B. The hierarchy of effects model
C. The BCG matrix
D. The Ansoff matrix
E. DAGMAR
The major thesis of the DAGMAR model is that communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured.
AACSB: Analytic
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 To recognize some problems marketers encounter in setting objectives for their IMC programs.
Topic: DAGMAR: An Approach to Setting Objectives
7-44
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
