Deck 9: Overview of Advertising Management

Question 1

Advertising is an efficient form of communication,capable of reaching mass audiences at a relatively low cost per contact.

Answer 1

True

Question 2

Most advertising is undertaken by companies that market their brands to other companies (B2B advertising).

Answer 2

False

Question 3

Usage expansion advertising consists of teaching new uses for existing brands.

Answer 3

True

Question 4

Of the product categories of automobiles,computers and software,drugs,food,personal care items,and telephone service,the category of automobiles has the highest average advertising-to-sales ratio.

Question 5

Most successful companies are aware that consistent investment spending is the key factor underlying successful advertising.

Question 6

One function of advertising is to increase brand salience,which means enriching the memory trace for a brand such that the brand comes to mind in relevant choice situations.

Question 7

Account executives are involved in tactical decision making and day-to-day contact with brand managers and other client personnel.

Question 8

There are three basic ways by which companies can add value to their offerings: innovating,altering consumer perceptions,and lowering price.

Question 9

Advertising's most important function is to increase sales.

Question 10

Over half of world-wide ad spending takes place in the United States.

Question 11

Advertising adds value to brands by influencing perceptions.

Question 12

Secondary demand is creating demand for an entire product category.

Question 13

A commercial that creates demand for Mountain Dew is an example of secondary demand.

Question 14

Even though advertising is costly,its effects are certain.

Question 15

Smaller competitors in an industry typically have to invest relatively larger percentages of their sales revenues in advertising than do larger competitors.

Question 16

Advertising is defined as "a paid,mediated form of communication from an identifiable source,designed to persuade the receiver to take some action,now or in the future."

Question 17

Advertising has not been demonstrated to influence brand switching.

Question 18

Primary demand is creating demand for a specific company's brand.

Question 19

The difference between advertising and public relations is that,for advertising,media exposure is paid for by the advertiser,and for public relations it is not.

Question 20

Advertising's primary role is at times to facilitate other marcom efforts.

Question 21

In an in-house advertising operation,the advertiser employs an advertising staff and absorbs the overhead required to maintain the staff's operations.

Question 22

One advantage of purchasing advertising services a la carte from specialized agencies is potential cost efficiencies.

Question 23

In terms of profitability,investing in advertising can be justified only if the incremental revenue generated from the advertising effort exceeds the advertising expense.

Question 24

An ad price elasticity coefficient of 0.15 indicates that a one percent increase in ad expenditures increases volume by 15 percent.

Question 25

The most common advertising agency compensation method today is a labor-based fee system.

Question 26

Media planners are responsible for developing the overall media strategy and purchasing the specific media vehicles for the advertiser.

Question 27

Outcome-based programs represent the oldest approach to agency compensation.

Question 28

Measuring advertising effectiveness often requires that baseline measures be taken before an advertising campaign begins and then afterward to determine whether the objective was achieved.

Question 29

Management supervisors in a full-service agency are involved in tactical decision making and day-to-day contact with brand managers and other client personnel.

Question 30

Most of the major U.S.ad agencies are located in Los Angeles.

Question 31

Most sophisticated companies are willing to place their bets on advertising's ability to boost revenues and thus enhance profits from the revenue-increase side rather than from the expense-reduction side.

Question 32

Account management provides the mechanism to link the agency with the client.

Question 33

Advertising strategy implementation involves setting objectives,devising budgets,creating messages,and developing the media strategy.

Question 34

Outcome-based compensation programs encourages agencies to use whatever IMC programs are needed to build brand sales.

Question 35

Elasticity is a measure of how responsive quantity demanded is to changes in marketing variables such as price and advertising.

Question 36

Advertising elasticity is,in fact,a measure of advertising strength.

Question 37

Advertising management generally involves the organization that has a product or service to advertise and an independent agency,or agencies,responsible for creating ads,making media choices,and measuring results.

Question 38

Whether one chooses to invest or disinvest in advertising a brand depends largely on expectations about how advertising will influence a brand's sales volume and revenue.

Question 39

Historically,advertising agencies charged a standard commission of 20 percent of the gross amount of media billings.

Question 40

An advantage of using a full-service advertising agency is the ability to obtain negotiating leverage with the media.

Question 41

Which of the following is an advertising function?

A) informing
B) influencing
C) reminding
D) adding value
E) All of these are correct.

Question 42

Creating better,more creative,and stronger advertising than competitors can lead to increased market shares.

Question 43

PepsiCo's commercials that encourage people to purchase Mountain Dew is an example of creating _____ demand.

A) elastic
B) primary
C) secondary
D) derived
E) joint

Question 44

The Dairy Council's campaign points out that weight-conscious consumers can buy low-fat dairy products.This message is primarily designed to _____.

A) persuade
B) deceive
C) add value
D) inform
E) remind

Question 45

Most successful companies are aware that _____ spending is the key factor underlying successful advertising.

A) increased
B) decreased
C) consistent investment
D) maximum
E) minimum

Question 46

Which of the following is an example of an advertisement that was designed to create primary demand?

A) "Weekends were made for Michelob."
B) "Orange juice isn't just for breakfast anymore."
C) "Like a good neighbor, State Farm is there."
D) "You're in good hands with Allstate."
E) "Gillette: the best a man can get."

Question 47

Advertising is costly and its effects are often _____.

A) certain
B) uncertain
C) predetermined
D) constant
E) detrimental

Question 48

An ex-CEO at Procter & Gamble-one of the world's largest advertisers-aptly draws an analogy between advertising and exercise in that both provide _____.

A) short-term benefits
B) irreversible benefits
C) long-term benefits
D) a learning environment
E) life to its participants

Question 49

An example of usage expansion advertising is _____.

A) a soft drink manufacturer who is the first to introduce a five liter plastic bottle
B) a manufacturer of baking soda promoting a new use for the product
C) a retailer who doubles the promotional budget
D) a retailer that was only using newspaper advertising that is now expanding into radio advertising
E) a gas station advertising that they are open 24 hours a day

Question 50

An advertisement that was designed to keep a company's brand fresh in the consumer's memory performs the advertising function of _____.

A) informing
B) persuading
C) adding value
D) reminding
E) assisting other company efforts

Question 51

To distinguish advertising,which typically is conveyed via print,TV,radio,the Internet,etc.,from person-to-person forms of communication,including personal selling and word of mouth,the term _____ communication is used.

A) mediated
B) paid-for
C) commercial
D) technological
E) focused

Question 52

The National Dairy Council sponsored a series of commercials promoting milk and cheese as healthy foods.This advertising was designed to create _____.

A) secondary demand
B) horizontal demand
C) vicarious demand
D) primary demand
E) joint demand

Question 53

Over half of world-wide ad spending takes place in which country?

A) United States
B) Canada
C) China
D) Germany
E) Japan

Question 54

Influencing people to purchase a specific brand is creating _____ demand.

A) elastic
B) inelastic
C) joint
D) secondary
E) primary

Question 55

Advertising that teaches new uses for existing brands is known as _____.

A) elaboration advertising
B) top-of-mind awareness advertising
C) primary demand advertising
D) usage expansion advertising
E) alternative use advertising

Question 56

Creating demand for an entire product category is known as _____ demand.

A) joint
B) elastic
C) derived
D) primary
E) secondary

Question 57

The Beef Council sponsored a variety of advertisements encouraging people to eat more meat.These advertisements were designed to create _____ demand.

A) secondary
B) derived
C) elastic
D) joint
E) primary

Question 58

Which is NOT a function performed by advertising?

A) persuading
B) reminding
C) adding value
D) assisting production
E) informing

Question 59

Which product category has the highest average advertising-to-sales ratio?

A) automobiles
B) computers and software
C) food
D) personal care items
E) drugs

Question 60

_____ is a paid,mediated form of communication from an identifiable source,designed to persuade the receiver to take some action,now or in the future.

A) Public relations
B) Advertising
C) Communications
D) Marketing
E) Marcom

Question 61

One option for an organization wishing to advertise is to recruit the services of a variety of firms with particular specialties in distinct aspects of advertising.These firms are called _____.

A) specialty firms
B) boutiques
C) cafeteria agencies
D) full-service agencies
E) buffet agencies

Question 62

Making a brand more _____ means enriching the memory trace for a brand such that the brand comes to mind in relevant choice situations.

A) primary
B) secondary
C) salient
D) important
E) valuable

Question 63

The _____ are involved in tactical decision making and day-to-day contact with brand managers and other client personnel.

A) account executives
B) management supervisors
C) assistant supervisors
D) product managers
E) line managers

Question 64

A full-service advertising agency _____.

A) necessitates employing an advertising staff and absorbing the overhead required to maintain the staff's operations
B) is unprofitable unless a company does a large and continuous amount of advertising
C) has the advantage of complete control over the advertising function
D) perform all the basic functions of advertising for a client
E) does not perform other marcom functions, such as sales promotion and publicity

Question 65

Advertising adds value to brands by _____.

A) influencing perceptions
B) innovating the offering
C) improving the quality of the offering
D) creating primary demand
E) creating secondary demand

Question 66

Most of the major U.S.advertising agencies are located in _____.

A) Detroit
B) Chicago
C) Los Angeles
D) Dallas
E) New York City

Question 67

Gwen works at a consumer-goods manufacturer and deals with the tactical,day-to-day activities that must be performed to carry out an advertising campaign.Gwen is involved in _____.

A) formulating advertising strategy
B) implementing advertising strategy
C) account management
D) marketing management
E) formulating marketing strategy

Question 68

How can companies add value to their offerings?

A) innovating
B) improving quality
C) altering consumer perceptions
D) a and b only
E) a, b, and c

Question 69

Rick's job at a major consumer goods manufacturer is to oversee the process of setting advertising objectives,devising budgets,message creation,and determining media strategy.Rick is involved in _____.

A) formulating advertising strategy
B) implementing advertising strategy
C) account management
D) marketing management
E) implementing marketing strategy

Question 70

Which of the following is a way advertisers can perform the advertising function?

A) purchase advertising services on an as-needed basis from specialized agencies
B) use a full-service advertising agency
C) use an in-house advertising operation
D) a and b only
E) a, b, and c

Question 71

Advertising strategy formulation involves which activity?

A) setting objectives
B) devising budgets
C) message creation
D) media strategy
E) All of these are correct.

Question 72

A Korean brand of television was perceived as "low quality" by over 70 percent of American consumers who were surveyed.However,after an extensive advertising campaign,the percentage of American consumers who perceived this brand as low quality fell to 20 percent.In this instance,advertising has successfully altered consumers' perceptions and performed which function?

A) adding value
B) informing
C) persuading
D) reminding
E) assisting other company efforts

Question 73

An advertisement that is designed to presell a company's products and provide salespeople with valuable introductions performs the advertising function of _____.

A) informing
B) persuading
C) adding value
D) reminding
E) assisting other company efforts

Question 74

Message strategies and decisions are most often the joint enterprise of the companies that advertise and their _____.

A) advertising agencies
B) marketing departments
C) advertising departments
D) promotion departments
E) communication consultants

Question 75

Clara's job responsibilities include the process of creating ad messages,selecting media in which to place the ads,and measuring the effects of the advertising efforts.Clara is involved in _____.

A) marketing management
B) message management
C) marcom management
D) communication management
E) advertising management

Question 76

_____ is the process of creating ad messages,selecting media in which to place the ads,and measuring the effects of the advertising efforts.

A) Marketing management
B) Advertising management
C) Marcom management
D) Promotion management
E) Advertising

Question 77

_____ deals with the tactical,day-to-day activities that must be performed to carry out an advertising campaign.

A) Marketing management
B) Advertising management
C) Advertising strategy formulation
D) Advertising strategy implementation
E) Measuring effectiveness

Question 78

An advertisement that is designed to encourage you to buy Nike shoes is attempting to stimulate _____ demand.

A) inelastic
B) elastic
C) secondary
D) primary
E) joint

Question 79

Advertising that is designed to deliver coupons and sweepstakes is performing the function of _____.

A) informing
B) influencing
C) reminding
D) adding value
E) assisting other company efforts

Question 80

Customers are known to be more responsive to retailers' price deals when retailers _____.

A) use rebate offers
B) advertise those deals
C) offer coupons
D) provide additional incentives
E) include in-package premiums