Deck 11: Setting the Campaign Budget

Question 1

An increase in adspend of 10% that results in a unit sales increase of only 1.4% can still be profitable.

Answer 1

True

Question 2

Jones' data on TV ad quality indicate that low quality ads are better than not advertising at all.

Answer 2

False

Question 3

A 25% direct price-off promotion will result in a loss of profit unless the unit profit margin is higher than 25%.

Answer 3

True

Question 4

FMCG categories tend to use relatively low A/S ratios.

Question 5

Consumer product companies can achieve a large increase in market share if they increase their adspend during recessionary periods.

Question 6

The brand manager has to set and justify budgets for specific brand-item campaigns and ensure that these budgets will be sufficient to meet the respective sales goals.

Question 7

The first step in the task method is to break down the sales goal into the number of purchasers or triers required and how often they are likely to repeat during the month.

Question 8

The task method of campaign budget setting depends greatly on accurate estimates of the conversion ratios.

Question 9

Schroer's method assumes that the product category is in the growth stage of the product category life cycle.

Question 10

If the largest competitor's SOV is below SOM, this signals an opportunity for our brand to attack.