Question 1

Allocation of funds to promotion only after all other budget items are covered is referred to as

Accepted Answer

All-you-can-afford budgeting refers to allocating funds for promotion only after all other budget items have been covered, which prioritizes other expenses and may limit the available budget for promotion.

Question 2

The design of the promotion will play a primary role in determining the message that is communicated to the audience. Successful designs are often the result of

Accepted Answer

Obtaining insights regarding consumers' interests and behavior is critical in designing successful promotions that effectively communicate the intended message to the target audience. Understanding consumer behavior and interests helps marketers tailor their promotional designs to resonate with their target audience, resulting in better outcomes for their campaigns. Option A is relevant to project management, and options B and C represent steps in the promotional planning process but do not relate directly to design. Option E is vague and does not offer insights into what makes a promotion successful.

Question 3

All-you-can-afford-budgeting refers to

Accepted Answer

All-you-can-afford-budgeting means allocating funds to a promotion only after all other budget items are covered. This approach does not take into consideration the specific promotion objectives or the expected profits generated from it. It can lead to underfunding or overfunding the promotion, as it solely depends on the leftover budget after covering other expenses.

Question 4

Carrying out the promotion program can be expensive and time consuming. One researcher estimates that "an organization with sales between $200 million and $500 million will need __________ years" to successfully implement an IMC program.

Accepted Answer

The answer of Carrying out the promotion program can be...

Question 5

A marketing manager at Ford computed the promotion-to-sales ratio for Ford, GM, and the auto industry itself. She found that Ford's ratio was 2.8%, GM's ratio was 4.5%, and the auto industry average was 6.7%. She then realized

Accepted Answer

The answer of A marketing manager at Ford computed the...

Question 6

Allocating funds to promotion by matching the competitor's absolute level of spending or the proportion per point of market share is referred to as __________ budgeting.

Accepted Answer

Competitive parity budgeting involves allocating funds to promotion by matching the competitor's absolute level of spending or the proportion per point of market share. This helps ensure that a company is spending a similar amount on promotion as its competitors, which can help it remain competitive in the market.

Question 7

An important factor in developing successful IMC programs is to create a process that facilitates their design and use. A tool used to evaluate a company's current process is the IMC

Accepted Answer

An IMC audit is a tool used to evaluate a company's current process in developing and implementing IMC programs. It helps identify strengths and weaknesses and provides insight into how to improve the process. This information is crucial in creating successful IMC programs.

Question 8

Direct marketing currently accounts for about __________ of the total U.S. gross domestic product.

Accepted Answer

Direct marketing accounts for a significant portion of the U.S. economy, but it still only makes up about 9% of the total GDP.

Question 9

Allocating funds to promotion whereby the company: (1) determines its promotion objectives; (2) outlines the tasks to accomplish these objectives; and (3) determines the promotion cost of performing these tasks is referred to as

Accepted Answer

Objective and task budgeting is the process of allocating funds to promotion by determining promotion objectives, outlining the tasks to achieve those objectives, and determining the cost of performing those tasks. This approach is more effective than other methods such as percentage of sales, competitive parity, or all-you-can-afford budgeting because it focuses on specific objectives and the tasks needed to achieve them, rather than just allocating a set amount of funds without a clear plan in place.

Question 10

According to the textbook, __________ recently won Advertising Age magazine's coveted Media Agency of the Year award.

Accepted Answer

The textbook states that Carat recently won Advertising Age magazine's coveted Media Agency of the Year award.

Question 11

The formula to calculate a promotion-to-sales ratio is: Total promotion expenditures divided by

Accepted Answer

The promotion-to-sales ratio is calculated as Total promotion expenditures divided by Total sales. This ratio helps companies to determine the effectiveness of their promotions in generating sales. Therefore, the best choice to calculate this ratio is option E which is Total sales.

Question 12

All of the following are forms of direct marketing EXCEPT:

Accepted Answer

In-store free samples are a form of direct sales promotion, not direct marketing.

Question 13

Once the design of each of the promotional program elements is complete, it is important to determine the most effective timing of their use. The __________ describes the order in which each promotional tool is introduced and the frequency of its use during a campaign.

Accepted Answer

The promotion schedule describes the order and frequency of use for each promotional tool during a campaign, making it the most appropriate choice for determining the timing of promotional program elements. A perceptual map is a visual representation of consumer perceptions and preferences, an efficiency matrix is a tool for evaluating the effectiveness of promotional programs, a sensitivity analysis is a method for testing the impact of changes to variables, and promotion to sales ratio is a measure of the effectiveness of promotional activities in generating sales. None of these options are specifically designed for determining timing of promotional program elements.

Question 14

Competitive parity budgeting refers to

Accepted Answer

Competitive parity budgeting involves allocating funds to a promotion in a way that matches a competitor's absolute level of spending or the proportion per point of market share. This ensures that the company remains competitive in terms of promotional spending and does not fall behind.

Question 15

The best approach to budgeting is objective and task budgeting, whereby the company determines its promotion objectives, outlines the tasks to accomplish these objectives, and

Accepted Answer

Objective and task budgeting involves determining the cost of performing specific tasks in order to achieve promotion objectives. Therefore, determining the promotion cost of performing these tasks is the most appropriate option for this type of budgeting approach. Asking the ad agency for an estimate or asking the media to propose a program would be more appropriate for a different budgeting approach. Determining what spending level top management will allow or surveying customers for spending levels are not directly related to this specific budgeting approach.

Question 16

Which of the following direct marketing tools is growing the fastest at 33 percent?

Accepted Answer

Mobile direct marketing is the fastest growing direct marketing tool with a growth rate of 33 percent. This can be attributed to the increasing use of smartphones and mobile devices, which makes mobile marketing more accessible and effective.

Question 17

The Olympics have become a very visible example of a comprehensive integrated communication program. For organizers, primary importance is placed on

Accepted Answer

The Olympics rely heavily on public relations and publicity in order to generate interest and support from the public. While advertising and personal selling may play a role, they are not the primary focus of the organizing committee's communication strategy. Sales promotion and direct marketing also do not play a significant role in promoting the Olympics.

Question 18

Imagine a small retailer saying, "Well, after budgeting for all of our expenses for next year, we still have about $7,500 remaining for emergencies. Let's budget 20 percent of that amount for advertising." What budgeting technique is the small retailer using?

Accepted Answer

The answer of Imagine a small retailer saying, "Well, after...

Question 19

Which of the following steps in the objective and task approach to promotion budgeting must be done correctly in order for any of the others to have the proper effect?

Accepted Answer

The answer of Which of the following steps in the...

Question 20

Which of the following is the best approach to promotion budgeting?

Accepted Answer

Objective and task budgeting is the best approach to promotion budgeting as it involves setting clear objectives and identifying the specific tasks needed to achieve those objectives. This helps ensure that the budget is allocated to the most effective promotional activities and allows for measurement and evaluation of the results. Percentage of sales budgeting ties the promotional budget to sales, but may not take into account the specific needs and goals of the business. Competitive parity budgeting and all-you-can-afford budgeting may result in underfunding or overspending on promotions, and linear forecast budgeting may not account for unexpected changes in the market or competitive landscape.

Quiz 14: Integrated Marketing Communications and Direct Marketing