Question 1

Which method of developing marketing communications budget is often used in highly competitive markets where rivalries between competitors are intense?
A) Percentage of sales
B) Meet the competition
C) What we can afford
D) Objective and task

Accepted Answer

Meet the competition method is commonly used in highly competitive markets where companies try to match their rivals' advertising expenses so that they can maintain their market share and stay competitive. This method focuses on keeping a close eye on the competition and allocating a budget that is competitive with them.

Question 2

In using the payout planning method of developing a marketing communications budget, the larger amounts of dollars would be spent on marketing communications:
A) in the early years to build brand awareness and brand equity.
B) in the middle years to build brand equity and brand preference.
C) in the later years to maintain market share.
D) when the market share is the lowest.

Accepted Answer

In the payout planning method, the larger amounts of dollars are spent in the early years to build brand awareness and brand equity. This helps the brand establish a presence in the market and create a positive reputation among consumers. As the brand becomes more well-known and trusted, less money is needed to maintain its position in the market. Therefore, option A is the best choice.

Question 3

If a company's leaders reject a communications budgeting method because it would take too long to prepare, odds are it is the ________ budgeting method.
A) percentage of sales
B) meet the competition
C) what we can afford
D) objective and task

Accepted Answer

The objective and task budgeting method involves a detailed break-down of communication goals and the specific tasks needed to achieve them. This method often takes longer to prepare, as it requires a more thorough analysis and planning process. Therefore, if a company rejects this method specifically due to the time it would take to prepare, it is likely that they are not considering the objective and task method. The other budgeting methods listed - percentage of sales, meet the competition, and what we can afford - are all less detail-oriented and may be quicker to prepare.

Question 4

In allocating marketing communications, spending approximately the same amount of money throughout each month of the year is a ________ schedule.
A) flighting
B) continuous
C) payout
D) pulsating

Accepted Answer

A continuous schedule involves spending approximately the same amount of money throughout each month of the year. Flighting involves alternating periods of heavy spending with periods of no spending, a payout schedule involves distributing a fixed amount of money over a set period of time, and a pulsating schedule involves periodic bursts of advertising followed by periods of no advertising.

Question 5

Which method of developing a marketing communications budget is used when the marketing budget is reduced as the brand reaches the point that additional dollars invested in communications yields diminishing returns?
A) Percentage of sales
B) Objective and task
C) Payout planning
D) Quantitative methods

Accepted Answer

Payout planning is the method used when a marketing budget is adjusted based on the diminishing returns of additional investments in communications. This approach involves setting the budget to match the expected returns over a certain period, reducing the budget as the incremental gains decrease.

Question 6

In allocating marketing communications, communications only during specific times during the year with periods of no advertising the other times is a ________ schedule.
A) flighting
B) continuous
C) payout
D) pulsating

Accepted Answer

Flighting is a schedule where advertising is only done during specific time periods, followed by periods of no advertising. This is often used for products that have seasonal demand or promotional events that only occur at certain times of the year. Continuous advertising would involve a regular and consistent presence of advertising throughout the year. Payout and pulsating are not marketing communication schedule terms.

Question 7

The primary objective of the meet-the-competition method for developing a marketing communications budget is to:
A) match the communication budget with sales.
B) ensure marketing dollars are invested where it is most needed.
C) prevent the loss of market share.
D) ensure marketing dollars are allocated appropriately.

Accepted Answer

The meet-the-competition method focuses on preventing the loss of market share by matching competitors' spending in advertising and promotions, ensuring a company remains competitive in its marketing efforts.

Question 8

Basing a budget on what other companies are spending on advertising and communication is which method?
A) Percentage of sales
B) Meet the competition
C) What we can afford
D) Payout planning

Accepted Answer

Basing a budget on what other companies are spending on advertising and communication is known as "Meet the competition method". This method involves matching or exceeding the advertising expenditure of the competitors, which is often used in a market where product differentiation is difficult. Therefore, the best choice in this scenario would be option B.

Question 9

The ________ method of developing a marketing communications budget uses computer simulations to model the relationship between advertising and marketing communications and sales, profits, and other factors.
A) meet the competition
B) objective and task
C) payout planning
D) quantitative models

Accepted Answer

The quantitative models method uses computer simulations to model the relationship between advertising and marketing communications and sales, profits, and other factors. The objective and task method involves setting specific objectives and determining the tasks required to achieve them, while the meet the competition method involves matching the competition's budget. The payout planning method involves allocating a percentage of sales revenue towards marketing communications.

Question 10

Which method of developing a marketing communications budget establishes a ratio of advertising dollars to sales or market share then reduces the percentage as sales build and the product obtains market share?
A) Arbitrary allocation
B) Meet-the-competition
C) Payout planning
D) Quantitative models

Accepted Answer

The method described is known as payout planning, which establishes a percentage of advertising budget in relation to sales or market share and adjusts it as sales increase or market share is gained. The other methods listed do not follow this specific approach.

Question 11

If Burger King's advertising manager decides to match McDonald's advertising expenditures the ________ advertising budget method is being used.
A) objective and task
B) meet the competition
C) what we can afford
D) the percentage of share method

Accepted Answer

The "meet the competition" method involves matching the advertising expenditures of competitors, which is exactly what Burger King's advertising manager is doing by matching McDonald's advertising expenditures.

Question 12

In allocating marketing communications, continuous advertising and communications during the year with bursts of higher intensity at specific times is a ________ schedule.
A) flighting
B) continuous
C) payout
D) pulsating

Accepted Answer

Pulsating schedule is characterized by continuous advertising and communications during the year with bursts of higher intensity at specific times.

Question 13

Newer and smaller companies are inclined to use the ________ method when developing marketing communications budgets.
A) percentage of sales
B) meet the competition
C) what we can afford
D) payout planning

Accepted Answer

Smaller and newer companies generally do not have a lot of resources to allocate towards marketing, so they tend to use the "what we can afford" method when developing marketing communications budgets. This involves determining how much money the company can realistically set aside for marketing without affecting other aspects of the business. The other methods (percentage of sales, meet the competition, payout planning) may be used by larger and more established companies with more predictable revenue streams.

Question 14

In using the payout planning method of developing a marketing communications budget, the marketing budget would be reduced:
A) at the product's introduction, then increased when brand acceptance occurs.
B) when the brand becomes the market leader.
C) when the brand reaches the point at which additional dollars invested in communications yields diminishing returns.
D) when the market becomes saturated.

Accepted Answer

The payout planning method involves setting a budget based on the expected sales revenue from the product. As sales increase, the budget is increased proportionally. However, there comes a point where additional spending on marketing communications will yield diminishing returns. At this point, the budget should be reduced to only what is necessary to maintain brand awareness and customer loyalty. Therefore, option C is the correct choice.

Question 15

Managers who do not recognize the benefits of marketing may be most inclined to use the ________ method of communications budgeting.
A) percentage of sales
B) meet the competition
C) what we can afford
D) payout planning

Accepted Answer

Managers who do not recognize the benefits of marketing may be most inclined to use the "what we can afford" method of communication budgeting because they may see marketing as an expense rather than an investment. This method involves allocating funds to communication efforts based solely on what the company can afford to spend, rather than considering the potential return on investment from those efforts.

Question 16

In allocating its marketing communications budget, weight-loss programs such as Weight Watchers that advertise primarily during the first of a year would tend to use the ________ schedule.
A) flighting
B) continuous
C) payout
D) pulsating

Accepted Answer

A flighting schedule involves alternating periods of advertising and no advertising. Weight-loss programs that advertise primarily during the first of a year are likely following this schedule, as people are more likely to seek out weight-loss programs at the beginning of a new year as part of their resolutions.

Question 17

Which method for developing a marketing communications budget links dollars to defined goals?
A) Percentage of sales
B) Meet the competition
C) What we can afford
D) Objective and task

Accepted Answer

The objective and task method for developing a marketing communications budget links dollars to defined goals, as it involves setting specific objectives and tasks and then determining the cost of achieving them. This method ensures that the budget is based on the specific goals and tasks the company wants to achieve, rather than being determined simply by a percentage of sales or what the company can afford.

Question 18

In allocating its marketing communications budget, a ski resort in Colorado would tend to use the ________ schedule.
A) flighting
B) continuous
C) payout
D) pulsating

Accepted Answer

A ski resort in Colorado would tend to use the flighting schedule for their marketing communications budget because it aligns with the seasonal nature of the industry. Flighting involves intermittent bursts of advertising during peak season and little to no advertising during off-season, which would be more effective for a ski resort.

Question 19

The primary disadvantage of the meet-the-competition method of marketing communication budgeting is:
A) marketing dollars may not be spent efficiently.
B) there is little flexibility in how marketing dollars can be spent.
C) when sales go down, so does spending.
D) it shows a lack of commitment to marketing.

Accepted Answer

The primary disadvantage of the meet-the-competition method is that marketing dollars may not be spent efficiently. This is because the budget is determined based on what competitors are spending, rather than on the specific needs and goals of the company. As a result, there may be wasted spending or missed opportunities for more effective marketing strategies.

Question 20

The ________ approach to developing a marketing communications budget is often viewed as being the most effective.
A) objective and task
B) percentage of sales
C) what we can afford
D) payout planning

Accepted Answer

The objective and task approach involves setting specific communication objectives, identifying the tasks needed to achieve those objectives, and estimating the costs associated with each task. This approach ensures that budget decisions are based on clear objectives and a carefully planned strategy, which is often viewed as the most effective approach. The other approaches (percentage of sales, what we can afford, payout planning) are less structured and can be more arbitrary or reactive in nature.

Quiz 4: The IMC Planning Process

Which method of developing marketing communications budget is often used in highly competitive markets where rivalries between competitors are intense?

In using the payout planning method of developing a marketing communications budget, the larger amounts of dollars would be spent on marketing communications:

If a company's leaders reject a communications budgeting method because it would take too long to prepare, odds are it is the ________ budgeting method.

In allocating marketing communications, spending approximately the same amount of money throughout each month of the year is a ________ schedule.

Which method of developing a marketing communications budget is used when the marketing budget is reduced as the brand reaches the point that additional dollars invested in communications yields diminishing returns?

In allocating marketing communications, communications only during specific times during the year with periods of no advertising the other times is a ________ schedule.

The primary objective of the meet-the-competition method for developing a marketing communications budget is to:

Basing a budget on what other companies are spending on advertising and communication is which method?

The ________ method of developing a marketing communications budget uses computer simulations to model the relationship between advertising and marketing communications and sales, profits, and other factors.

Which method of developing a marketing communications budget establishes a ratio of advertising dollars to sales or market share then reduces the percentage as sales build and the product obtains market share?

If Burger King's advertising manager decides to match McDonald's advertising expenditures the ________ advertising budget method is being used.

In allocating marketing communications, continuous advertising and communications during the year with bursts of higher intensity at specific times is a ________ schedule.

Newer and smaller companies are inclined to use the ________ method when developing marketing communications budgets.

In using the payout planning method of developing a marketing communications budget, the marketing budget would be reduced:

Managers who do not recognize the benefits of marketing may be most inclined to use the ________ method of communications budgeting.

In allocating its marketing communications budget, weight-loss programs such as Weight Watchers that advertise primarily during the first of a year would tend to use the ________ schedule.

Which method for developing a marketing communications budget links dollars to defined goals?

In allocating its marketing communications budget, a ski resort in Colorado would tend to use the ________ schedule.

The primary disadvantage of the meet-the-competition method of marketing communication budgeting is:

The ________ approach to developing a marketing communications budget is often viewed as being the most effective.