Question 1

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

Accepted Answer

Even though the increase in unit sales may seem low, it can still generate enough revenue to make up for the increase in adspend and result in a profitable outcome.

Question 2

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

Accepted Answer

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%.

Accepted Answer

If the direct price-off promotion is 25%, the selling price decreases by 25%. If the unit profit margin is not higher than 25%, the cost of production plus other costs will be higher than the reduced selling price, resulting in a loss of profit.

Question 4

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

Accepted Answer

The answer of FMCG categories tend to use relatively low...

Question 5

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

Accepted Answer

The answer of Consumer product companies can achieve a large...

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.

Accepted Answer

The brand manager is responsible for managing budgets and ensuring that they are sufficient to meet sales goals for specific brand-item campaigns.

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.

Accepted Answer

The first step in the task method typically involves defining the overall marketing or sales objectives clearly before breaking them down into specific tasks such as determining the number of purchasers or triers required.

Question 8

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

Accepted Answer

Accurate estimates of conversion ratios are crucial in determining the success of a campaign and allocating appropriate budget. Therefore, the task method of campaign budget setting heavily relies on these estimates.

Question 9

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

Accepted Answer

Schroer's method is not specifically tied to the growth stage of the product category life cycle; it is a method used in project management and cost estimation, not directly related to product life cycle stages.

Question 10

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

Accepted Answer

If the largest competitor's share of voice (SOV) is below the share of market (SOM), it means that our brand has a relatively higher share of voice compared to our market position. This gives us the opportunity to increase our market share by taking advantage of our larger share of voice and promoting ourselves aggressively.

Quiz 11: Setting the Campaign Budget