Deck 17: Advertising and Sales Promotion

Question 1

Cooperative advertising is not very economical,because media rate structures usually require local firms to pay more for local advertising than the same ad would cost a national advertiser.

Answer 1

False
Explanation: Cooperative advertising helps the producer get more promotion for its advertising dollars because media usually give local advertisers lower rates than national or international firms.

Question 2

The basic strategy planning decisions for advertising,publicity,and sales promotion are the same regardless of where in the world the target market is located.

Answer 2

True
Explanation: The basic strategy planning decisions for advertising, publicity, and sales promotion are the same regardless of where in the world the target market is located. However, the look and feel can vary a lot in different countries.

Question 3

Motor vehicles producers spend a higher percentage of their sales on advertising than do perfumes and cosmetics producers.

Answer 3

False
Explanation: Producers of perfumes and cosmetics spend a higher percentage of their sales on advertising than producers of motor vehicles do. Refer to Exhibit 15-2.

Question 4

The main problem with advertising is that it costs so much-on average about one third of sales dollars for U.S.companies.

Question 5

Although advertising expenditures in the United States by 2013 were more than $220 billion,the major expense was for media time and space-not payroll expense to people who worked in the advertising industry.

Question 6

It's a common belief that half of the money spent on advertising and sales promotion is wasted.

Question 7

During the last decade,the rate of advertising spending has increased in the United States,but it has decreased in the rest of the world.

Question 8

On average,U.S.corporations spend only about 2.5 percent of their sales on advertising.

Question 9

Advertising in Germany accounts for $80 million in 2015.

Question 10

By 2015,advertising expenditures in the United States were more than $200 billion.

Question 11

Advertising objectives should be very specific,even more specific than personal selling objectives.

Question 12

Eating places spend a higher percentage of their sales on advertising than do women's clothing stores.

Question 13

Total advertising spending in other countries is lower than in the U.S.

Question 14

Furniture stores spend a higher percentage of their sales on advertising than do grocery stores.

Question 15

A cooperative advertising program can help a producer achieve coordination and integration of ad messages in the channel of distribution.

Question 16

Advertising in the U.S.accounts for about 32 percent of worldwide advertising spending.

Question 17

Producers of business products generally spend a larger percent on advertising than do producers of consumer products.

Question 18

Cooperative advertising involves intermediaries and producers sharing in the cost of ads.

Question 19

Advertising allowances are price reductions given to firms further along in the channel to encourage them to advertise or promote a producer's products locally.

Question 20

Games and toys producers spend a higher percentage of their sales on advertising than do footwear producers.

Question 21

The direct type of competitive advertising tries to obtain immediate buying action.

Question 22

Institutional advertising may try to inform,persuade,or remind,but it usually focuses on the name and prestige of an organization or industry.

Question 23

Reminder advertising is likely to be most useful in the market growth stage of the product life cycle.

Question 24

Indirect competitive advertising aims for immediate buying action while direct competitive advertising aims for future buying action.

Question 25

Reminder advertising is most likely to be useful in the market maturity or sales decline stages of the product life cycle-especially when the product has achieved brand insistence or brand preference.

Question 26

Product advertising is aimed at final consumers; institutional advertising is aimed at intermediaries.

Question 27

Competitive advertising tries to develop selective demand for a specific brand.

Question 28

Comparative advertising makes specific brand comparisons using actual product names.

Question 29

When a firm's advertising says "our motorcycles will outperform any other brand," it is using competitive advertising to develop selective demand.

Question 30

Institutional advertising emphasizes a particular product and plays down the name of the company.

Question 31

Institutional advertising is advertising aimed at business customers and intermediaries.

Question 32

When a retailer advertises a "special 24-hour sale on GE brand air conditioners," direct competitive advertising is being used.

Question 33

Many countries forbid comparative advertising,but it is now legal in the U.S.

Question 34

Competitive advertising is typically used in the market introduction stage of the product life cycle-to develop primary demand.

Question 35

Comparative advertising tries to keep the product's name before the public.

Question 36

A chemical company might use institutional ads to highlight its concern for the environment.

Question 37

The basic job of pioneering advertising is to develop specific demand for a specific brand.

Question 38

Product advertising tries to sell a specific product,while institutional advertising tries to promote an organization rather than a specific product.

Question 39

Comparative advertising has been banned by the Federal Trade Commission because it is considered very effective in winning sales from competing products named in ads.

Question 40

An insurance company might use institutional ads to highlight its concern for safe driving.

Question 41

The effectiveness of an advertising medium depends on how well it fits with the rest of a particular marketing strategy.

Question 42

The largest share of total advertising expenditures in the United States goes for TV (including cable)advertising.

Question 43

Cookies give customers information about advertisers.

Question 44

Most online advertisers seek a delayed response.

Question 45

The largest share of total advertising expenditures in the United States goes for newspaper advertising.

Question 46

Because of cookies,some advertisers already know where customers have been on the web and what they did there.

Question 47

The best advertising medium is television,but some advertisers must use other media because they do not have enough money for TV.

Question 48

To guarantee good media selection,the advertiser must specify its target market and then choose media that will reach these target customers.

Question 49

Considering that only a small percentage of cell phone users in many developed countries have smartphones,advertisers are wary about the effectiveness of delivering online ads on smartphones.

Question 50

Pay-per-click advertising means advertisers pay only if the customer clicks on the ad and links to the advertiser's website.

Question 51

Mobile devices track customers' whereabouts through GPS and the segmenting dimension of physical location at a specific time can be added to target marketing.

Question 52

Copy thrust is what the words and illustrations of an advertisement should communicate.

Question 53

In general,advertising media are becoming more targeted in that they aim for more narrowly defined market segments.

Question 54

Cookies are a cost-effective way for advertisers to target ads and boost online sales.

Question 55

One advantage of the major mass media is that the advertiser does not have to pay for the whole audience to whom the media delivers,but instead just pays based on the number of potential customers in the audience.

Question 56

If the objective of an ad is to inform,telling a detailed story and using precise pictures,then print advertising is right.

Question 57

To guarantee good media selection,the advertiser first must clearly specify its target market.

Question 58

"Copy thrust" refers to the choice of media to deliver a message to the target audience.

Question 59

A lot more firms will put ads on websites if there is a direct relationship between costs and results.

Question 60

At some websites,Internet ads are free if the ads don't get results.

Question 61

Because of different advertising rules in different countries,it's best for a marketing manager to get help from local advertising experts.

Question 62

Looking at sales volume is usually the easiest and best method of determining the degree of success for an advertising campaign.

Question 63

The United States is one of only a few countries in the world where the government takes an active role in deciding what kinds of advertising are allowable,fair,or appropriate.

Question 64

The vast majority of advertising agencies are small,with 10 or fewer employees.

Question 65

Advertisers often decline to work with agencies who handle competing accounts.

Question 66

The Federal Trade Commission can require firms to use "corrective advertising" or "affirmative disclosures," if it decides a particular advertisement is unfair or deceptive.

Question 67

Getting attention to a particular advertisement is always easy.

Question 68

Advertising effectiveness is usually very difficult to measure because sales result from the total marketing mix,not just advertising.

Question 69

One of the big problems with using an advertising agency is that the advertiser must stick with the agency for a long time-at least two years-even if the agency's work is not satisfactory.

Question 70

To evaluate the effectiveness of advertising,it's better to rely on the judgment of the creative people in ad agencies than to rely on the results of advertising research.

Question 71

The vast majority of advertising agencies are large (20 or more employees),but the smaller,more creative agencies account for most of the billings.

Question 72

Though it is common in the United States to use cartoon characters in advertising to children,both Japan and France limit that practice,and Canada bans any advertising targeted directly at children.

Question 73

Corrective advertising corrects deceptive advertising.

Question 74

The AIDA model can help plan messages for advertisements.

Question 75

The growth of mega-agencies has been prompted by large corporations who need to advertise worldwide.

Question 76

Advertising can be useful in a marketing strategy for getting attention,holding interest,arousing desire,and obtaining action.

Question 77

In the United States,the regulation of "deceptive" and "unfair" advertising is the responsibility of the Federal Trade Commission.

Question 78

Success of an advertising campaign can be easily measured by looking at the sales result.

Question 79

On average,the 500,000 advertising agencies in the United States are large,employing about 200 people each.

Question 80

The effectiveness of advertising is best measured by relying on the judgment of creative people and advertising "experts."