Deck 4: The Scope of Advertising: From Local to Global

Question 1

The relationship with the customer is the greatest difference between national and local advertisers.

Answer 1

True
Explanation: The relationship with the customer may be the greatest difference between national and local advertisers.

Question 2

A chain store may maintain a completely staffed advertising department consisting of artists,copywriters,and production specialists to handle production,media placement,and marketing support services.

Answer 2

True
Explanation: A chain store often maintains a completely staffed advertising department to handle production, media placement, and marketing support services.

Question 3

Advertisers are the companies that sponsor advertising for themselves and their products.

Answer 3

True
Explanation: The advertisers (or clients) are the companies-like McDonald's, Coca-Cola, or the local shoe store-that sponsor advertising for themselves and their products.

Question 4

One of the primary differences between national and local advertisers is that local advertisers plan strategically,while national advertisers think tactically.

Question 5

The duty of the traffic department is to make sure that all members of the product's distribution channel maintain product/brand image.

Question 6

Some media allow a commission on the higher rates they charge national advertisers but not on the lower rates they charge local advertisers.

Question 7

In the advertising business,the suppliers assist the advertisers to plan,create,and prepare ad campaigns.

Question 8

The basic principles of advertising are the same in both local and national advertising.

Question 9

Creative boutiques work for advertisers and occasionally subcontract to ad agencies.

Question 10

The three types of local advertising are clearance,service,and retail advertising.

Question 11

In a decentralized advertising system,the company sets up separate ad departments for different divisions,subsidiaries,regions,brands,or other categories that suit the company's needs.

Question 12

Advertising agencies work for the media.

Question 13

Local advertising is also referred to as retail advertising.

Question 14

Some of the nonadvertising services performed by full-service agencies are performing research and selecting media.

Question 15

The account planner defends the consumer's point of view and the creative strategy in the debate between the agency's creative team and the client.

Question 16

Multinational companies that use a customized approach to marketing and advertising in all countries are considered global marketers.

Question 17

One of the primary purposes of co-op advertising is to improve consumer perception of retailing.

Question 18

Nonprofit organizations like charities and arts organizations are types of local advertisers.

Question 19

In centralized departments,an advertising manager typically reports to a marketing vice president.

Question 20

Copywriters must condense all that can be said about a product into a few pertinent,succinct points.

Question 21

The four distinct stages of the life cycle of the agency/client relationship are prerelationship,development,maintenance,and termination.

Question 22

A hardware store mails an advertising flyer to all the residents in its community.This is an example of _____ advertising.

A) local
B) institutional
C) interactive
D) deceptive
E) dealer

Question 23

Which of the following types of local advertising is most likely to be used by a franchise of a food chain store to recruit new employees?

A) Classified
B) Product
C) Subliminal
D) Institutional
E) Clearance

Question 24

Advertising is organized around four distinct groups.The _____ group includes the photographers,the illustrators,video production houses,and digital service bureaus.

A) encoders
B) support staff
C) account personnel
D) suppliers
E) creators

Question 25

_____ advertising attempts to create a favorable long-term perception of the business as a whole,not just of a particular good or service.

A) Institutional
B) Interactive
C) Subliminal
D) Product
E) Clearance

Question 26

The biggest problem for in-house agencies is that they do not usually perform all the tasks of independent full-service agencies.

Question 27

Retailers use television,catalogs,the Internet,and magazines to transmit their advertising message to consumers.In terms of the four distinct groups around which advertising is organized,retailers are using:

A) the suppliers.
B) the media.
C) message handlers.
D) personal selling.
E) the advertisers.

Question 28

Which of the following statements about local advertising is true?

A) Retail advertising is always local.
B) Franchisees of national companies do not engage in local advertising.
C) Local advertising is critical because most consumer sales are made or lost locally.
D) There are two categories of local advertisers.
E) Ninety percent of the money advertisers spend each year is spent on local advertising.

Question 29

The advertising business has evolved into four distinct groups.Which of the following is not one of these groups?

A) Media
B) Customers
C) Advertising agencies
D) Suppliers
E) Advertisers

Question 30

Transit advertising is an effective and inexpensive medium to reach the public while they're in the retail neighborhood.

Question 31

Advertisers use _____ advertising in the newspaper to locate and recruit new employees,to offer services,or to sell or lease new and used merchandise.

A) classified
B) product
C) subliminal
D) institutional
E) clearance

Question 32

Which of the following is an example of product advertising?

A) An ad for an electronics company explaining how to help the environment by recycling printer cartridges.
B) An ad for a credit card explaining how important small businesses are to national economic health.
C) An ad describing why you should buy certain cake mixes.
D) An ad announcing a store providing appliances for homes built by a nonprofit organization.
E) An ad for cosmetics announcing that it will donate $100,000 to charity.

Question 33

The straight-fee method of pricing the services of an ad agency is also called the retainer method.

Question 34

A speculative presentation allows an advertiser to see what the agency can do for it before signing any contractual agreement.

Question 35

A petroleum company ran a series of commercials in which they asked consumers how they could improve and preserve the natural environment.After consumers responded to the ad,a spokesperson explained how the company was doing more than its share to protect the environment.These commercials are examples of _____ advertising.

A) subliminal
B) generic
C) product
D) clearance
E) institutional

Question 36

_____ advertising promotes a specific good or service and stimulates short-term action while building awareness of the business.

A) Interactive
B) Static
C) Product
D) Institutional
E) Agency

Question 37

The three primary types of ads placed in local media are product,classified,and:

A) service.
B) retail.
C) governmental.
D) specialized.
E) institutional.

Question 38

During the first week of November,local pharmacies ran ads to announce they were selling all of their Halloween candy and decorations at half their original prices.This advertisement is an example of:

A) a regular price-line ad.
B) a classified ad.
C) an institutional ad.
D) a clearance ad.
E) a deceptive ad.

Question 39

Advertisers are often referred to as:

A) senders.
B) encoders.
C) clients.
D) customers.
E) suppliers.

Question 40

Which of the following groups sell time and space to carry the advertiser's message to the target audience?

A) Creative boutiques
B) Agencies
C) Suppliers
D) Media
E) Art studios

Question 41

A French cosmetics manufacturer uses uniform international advertising campaigns that is controlled by the company's advertising department in France.The company's concern with cost efficiency and continuity in its communications programs indicate that the company has a _____ advertising department.

A) territorial
B) decentralized
C) non-hierarchical
D) matrix
E) centralized

Question 42

One of the disadvantages for a company that uses a decentralized advertising department is:

A) focus on what is good for the department rather than what is good for the entire organization.
B) the absence of flexibility.
C) the inability to respond quickly to changes in the department's external environment.
D) the inability to accurately measure the impact of advertising on sales.
E) the difficulty in introducing new approaches and creative ideas.

Question 43

A(n)_____ is formed by talented artists who work for advertisers and occasionally subcontract to advertising agencies.Their mission is to develop exciting creative concepts and to produce fresh,distinctive advertising messages.

A) promotional facilitation center
B) interactive agency
C) entrepreneurial agency
D) creative boutique
E) IMC agency

Question 44

Which of the following is an advantage associated with the use of an independent advertising agency?

A) Saving money by cutting promotional overheads and keeping the media commission
B) Increased involvement of management in "single-business" companies
C) Increased control over all channels of distribution
D) An outside, objective viewpoint to the advertiser's business
E) Reduced variable expenses

Question 45

Multinationals that use a standardized approach to marketing and advertising in all countries in which they do business are called:

A) foreign marketers.
B) national corporations.
C) global marketers.
D) international exporters.
E) multidomestic corporations.

Question 46

Which of the following statements implies that national and local advertisers have different time orientation?

A) National advertisers think in terms of large groups of people, whereas local advertisers deal with individual customers every day.
B) National advertisers get occasional feedback, whereas local advertisers get feedback everyday.
C) National advertisers focus on gross sales, whereas local advertisers primarily focus on market share.
D) National advertisers typically focus on media with high point of contact, whereas local advertisers are more concerned with high frequency media.
E) National advertisers develop five-year strategic plans, whereas local advertisers worry about weekly ads and its performances.

Question 47

Local advertisers and national advertisers differ in terms of:

A) credibility, autonomy, and sources.
B) ad penetration, autonomy, and promotional strategies.
C) focus, time orientation, and resources.
D) focus, promotional themes, and advertising vehicles.
E) credibility, relationships, and focus.

Question 48

The American Association of Advertising Agencies (AAAA)defines a(n)_____ as an independent organization of creative people and businesspeople who specialize in developing and preparing marketing and advertising plans,advertisements,and other promotional tools.

A) creative boutique
B) promotional facilitator
C) facilitating intermediary
D) advertising agency
E) advertising supplier

Question 49

The modern _____ advertising agency supplies both advertising and nonadvertising services in all areas of communications and promotion for its clients.

A) interactive
B) institutional
C) specialized service
D) full-service
E) multi-tasking

Question 50

Which of the following statements is true about general consumer agencies?

A) They provide advertising for products that are used in the manufacture of consumer products.
B) They concentrate on institutional advertising accounts.
C) They concentrate on consumer accounts.
D) They derive much of their income from nonadvertising functions.
E) They do not operate internationally.

Question 51

An advertising agency in Mexico City represents a wide-range of consumer accounts.It distinguishes itself from other agencies because it depicts real Mexicans enjoying everyday life.However,it does not advertise in trade publications.From this information,you can surmise that the agency is a _____ agency.

A) business-to-business
B) specialized
C) general consumer
D) high-tech
E) creative boutique

Question 52

As of January 2012,a super market chain operates 142 supermarkets in the metropolitan areas of New York,New Jersey,and Philadelphia.The chain advertises only in states where it has stores.This form of advertising is known as:

A) clearance advertising.
B) adjacency advertising.
C) regional advertising.
D) national advertising.
E) subliminal advertising.

Question 53

An advertising agency in Mexico City represents a wide range of accounts.It depicts real Mexicans enjoying everyday life.The agency does not offer assistance to clients who want to reach international markets.From this information,you can surmise that the agency is a(n)_____ agency.

A) business-to-business
B) transnational
C) regional
D) in-house
E) creative boutique

Question 54

Which of the following is an advantage of using a decentralized advertising department?

A) Increased vertical communication
B) Reduced measurable response
C) Decreased rivalry among brand managers
D) Increased divisional flexibility
E) Increased uniformity of ads

Question 55

Jill & Joel Co.,owned by Jill and Joel Hudson,sells and installs above-ground swimming pools and hot tubs.The manufacturer of the hot tub a letter to Jill & Joel in which it offers to pay 60 percent of the advertising cost if the Hudson's run a newspaper ad featuring the hot tubs.Which of the following types of advertising is the hot tub manufacturer planning to undertake with the Hudsons?

A) Vertical cooperative advertising
B) Vertical clearance advertising
C) Horizontal subliminal advertising
D) Horizontal clearance advertising
E) Institutional advertising

Question 56

Centralized organizations may organize the centralized advertising department in all of the following ways except:

A) by the method of payment.
B) by sub-functions of advertising.
C) by the end user.
D) by the media.
E) by the product or brand.

Question 57

Business-to-business advertising agencies charge their clients service fees because:

A) the standard agency commission does not cover agency costs.
B) business-to-business advertising is regulated by the Federal Trade Commission.
C) a fee system has a long historical pedigree.
D) the commission rate on industrial media is only 5 percent.
E) unlike a commission system, a fee system involves no negotiations at all.

Question 58

A national manufacturer assisting a distributor in product promotion by providing direct mail flyers is an example of _____ advertising.

A) cooperative
B) clearance
C) horizontal
D) subliminal
E) interactive

Question 59

In a _____,a company sets up separate ad departments for different divisions,subsidiaries,regions,brands,or other categories that suit the company's needs.

A) matrix system
B) pyramid system
C) centralized system
D) decentralized system
E) hierarchical system

Question 60

Which of the following is not true of creative boutiques?

A) Usually, the founders of a creative boutique are graphic designers and/or copywriters.
B) They occasionally subcontract to ad agencies.
C) They tend to be limited to the role of creative suppliers.
D) They provide the same research, marketing, sales expertise, and deep customer service that full-services agencies offer.
E) They focus on developing exciting creative concepts.

Question 61

A company buys unsold television and radio media time and resells this time and space to advertisers and agencies.This company is an example of a(n):

A) entrepreneurial agency.
B) promotional facilitator.
C) creative boutique.
D) media-buying service.
E) promotional broker.

Question 62

An ad agency's _____ coordinates all phases of production and makes sure everything is completed before the client and/or media deadlines.

A) media department
B) coordination specialist
C) traffic department
D) communications manager
E) art director

Question 63

An agency that uses the _____ method,charges a basic monthly fee for all of its services to the client and retains any media commissions earned.

A) retainer
B) salary-plus-commission
C) media markup
D) fee-commission combination
E) negotiation

Question 64

When an advertising agency purchases several hours of television time for its customers' commercials from a television station,the agency receives 15 percent of the gross amount charged by the station.The 15 percent is known as:

A) a spiff.
B) a cooperative allowance.
C) an advertiser incentive.
D) a slotting allowance.
E) a media commission.

Question 65

A golf company has developed a golf club that has a wider shaft and is 40 grams lighter than other clubs currently available in the market.It has hired an agency to develop an advertising campaign for this new club.The golf company has offered to pay the agency 3 percent of its profits if it sells more than 30,000 clubs during its first full year of production.This bonus is an example of a(n):

A) incentive system.
B) entrepreneurial allowance.
C) production-oriented plan.
D) retainer system.
E) market-oriented plan.

Question 66

An ad agency in Atlanta,Georgia,buys a quarter-page ad in a golfing magazine for a travel agency that specializes in preparing all-inclusive,hassle-free golf travel packages,on a 15 percent commission basis.The cost of the ad is $300.How much money should the agency pay the publication?

A) $255
B) $285
C) $300
D) $315
E) $345

Question 67

_____ must have the skill to condense all that can be said about a product into a few salient and pertinent points.

A) Account directors
B) Advertising supervisors
C) Copywriters
D) Communication specialists
E) Advertising planners

Question 68

Relationship marketing is defined in most marketing texts as the creation of customer loyalty through the establishment of a long-term win-win relationship between the buyer and seller.Which of the following terms most closely relates to relationship marketing for an advertising agency?

A) Horizontal cooperative advertising
B) Account planning
C) Vertical cooperative advertising
D) Integrated promotions
E) Decentralized advertising

Question 69

In the creative process,the _____ determines how the ad's verbal and visual symbols will fit together.

A) account executive
B) advertising planner
C) media specialist
D) art director
E) copywriter

Question 70

Medium and large advertising agencies are usually structured according to:

A) production and traffic units.
B) group or departmental systems.
C) media availability.
D) designers and illustrators.
E) advertisement suppliers.

Question 71

Which of the following statements is true about account planning?

A) It is a method used by advertisers to benchmark competitors.
B) It is a hybrid discipline that bridges the gap between the traditional agency research, account management, and creative departments.
C) It does not include any consumer research.
D) It is the reorganization of an advertiser for the purpose of improving its image.
E) It is a service provided by creative boutiques, which allows the advertiser to choose generic ads that can be customized.

Question 72

In an ad,the words that make up the headline and message is known as the:

A) copy.
B) media.
C) layout.
D) code.
E) feedback.

Question 73

In the _____ method of compensation,advertising agencies charge clients for all their services and credit any media commissions earned to the client.

A) variable budget
B) retainer
C) variable apportionment of overhead costs
D) slotting allowance
E) pushing allowance

Question 74

Under the _____ method of agency compensation,the media channel allows an ad agency to retain 15 percent of the bill amount on the time and space purchased for clients.

A) fee
B) media commission
C) markup
D) incentive
E) depreciation

Question 75

What is the greatest disadvantage associated with in-house ad agencies?

A) Loss of revenues
B) Adherence to the organizational mission
C) Reluctant acknowledgement by the mass media
D) Loss of objectivity
E) Poor staff-line relationships

Question 76

An ad agency may need to purchase photographs and illustrations from an outside supplier for its client.The agency pays the outside supplier a fee and adds a(n)_____,usually 17.65 percent,to the client's bill.

A) commission
B) markup
C) service charge
D) incentive
E) profit

Question 77

The _____ is in charge of the nonverbal communication portion of an ad.

A) account executive
B) advertising planner
C) media specialist
D) art director
E) communication specialist

Question 78

If an agency were to buy an ad in a magazine for a company that sells customized fabric,the ad would cost $5,000.How much money would the agency send the publication after deducting its media commission?

A) $4,850
B) $4,250
C) $5,000
D) $5,150
E) $5,750

Question 79

The primary reason some advertisers set up a wholly owned in-house ad agency is to:

A) increase their overhead.
B) tighten control over their advertising.
C) stimulate external creative efforts on the part of the marketing staff.
D) meet the challenge of ad agencies and mass media with respect to creative incentives.
E) increase the percentage of the markup they earn.

Question 80

An agency has designed a full-page magazine ad for hot tubs for a cost of $600.The job required the services of a photographer to produce an illustration of people enjoying a soak in a hot tub.If the agency uses the traditional markup,what is the advertising agency's media commission?

A) $90
B) $104
C) $100
D) $106
E) $108