Question 1

Though the ________ method of setting an advertising budget is simple to use and helps management think about the relationships among promotion spending, selling price, and profit per unit, it wrongly views sales as the cause of promotion rather than the result.

Accepted Answer

The question presents the advantages and disadvantages of different methods to set an advertising budget. By definition, the percentage-of-sales method sets the budget as a fixed percentage of the previous year's sales or the projected sales for the next year. While this method is easy to use and helps management understand the impact of advertising on profit, it assumes that sales are the cause of advertising, rather than the result. In other words, this method overlooks other external and internal factors that affect sales, such as market trends, competition, product quality, pricing, and distribution channels. Therefore, the percentage-of-sales method may lead to overestimating or underestimating the budget needed to achieve marketing objectives. The other methods mentioned in the question (integrated, competitive-parity, objective-and-task, and regression) are more comprehensive and strategic, as they consider multiple factors and goals to determine the optimal budget allocation. However, the best choice based on the information given is A, as it explicitly states the limitation of the percentage-of-sales method.

Question 2

Which promotional tool is the most immediate, customized, and interactive?

Accepted Answer

Direct marketing is the most immediate promotional tool as it involves direct communication with the target audience through various channels like email, direct mail, telemarketing, etc. It can also be customized as it allows marketers to tailor their messages to specific individuals or groups based on their preferences, behaviors, and other demographic information. Moreover, it is interactive as it enables two-way communication between the marketer and the audience, allowing them to respond, provide feedback, and engage in dialogue.

Question 3

________ consists of strong short-term incentives that invite and reward quick responses from customers.

Accepted Answer

Sales promotion is a marketing tool used to create short-term demand by offering incentives and encouraging customers to take immediate action. It can stimulate quick responses from customers by offering discounts, coupons, giveaways, contests or other strong incentives. Public relations, personal selling, advertising, and direct marketing are all effective marketing tools in their own rights, but they do not always provide the same short-term, quick response incentives as sales promotion.

Question 4

Glasis is a type of paint made specifically for use on cars. An ad in Motor Trend magazine advising consumers to request their auto body shops to use Glasis paint is an example of how a company uses ________.

Accepted Answer

The ad in Motor Trend magazine is an example of a pull strategy, which aims to create demand and draw customers towards the product. It encourages consumers to request their auto body shops to use Glasis paint, thereby creating a pull towards the product.

Question 5

________ is very believable because news stories, features, sponsorships, and events seem more real and believable to readers than ads do.

Accepted Answer

Public relations involves creating and promoting positive news stories, events, and sponsorships that make a company or brand appear more trustworthy and credible to the public. These types of messages are often more effective than traditional ads because they are presented as news or editorial content and are therefore seen as more objective and trustworthy. Differentiated marketing, direct marketing, sales promotion, and personal selling are all different types of marketing strategies that may be used in conjunction with public relations, but they do not necessarily involve the use of news stories or other forms of media coverage.

Question 6

Suppose Amazon.com has offered you free shipping on your next purchase of more than $35. This offer is an example of ________.

Accepted Answer

The offer of free shipping is a sales promotion, which is a short-term incentive designed to encourage customers to make a purchase.

Question 7

Which budgeting method entails defining specific promotion goals, determining the necessary tasks, and estimating the costs to determine a promotion budget?

Accepted Answer

The objective-and-task method involves defining specific promotion goals, determining the necessary tasks to achieve those goals, and estimating the costs associated with each task in order to determine a promotion budget. This method is considered to be the most effective and efficient way to develop a promotional budget as it ensures that promotional activities are aligned with the overall marketing objectives of the company.

Question 8

A newspaper article announced that Connect Wireless, the sixth-largest wireless carrier in a country, was changing its name to M-Mobile and that to begin the makeover process it had replaced spokesperson Robert Garmon with Catherine Naylor. Which of the following elements of a promotion mix is represented in this example?

Accepted Answer

The change of name and spokesperson is an example of public relations, which focuses on building and maintaining a positive image and relationships with the public and stakeholders. Advertising would involve paid announcements or promotions in media, sales promotion would involve incentives or discounts to encourage purchases, personal selling would involve direct communication with potential customers, and direct marketing would involve targeted communication through channels like email or social media. None of these are clearly present in the newspaper article about Connect Wireless/M-Mobile's makeover process.

Question 9

Sam, the owner of a small company, learned that a competitor was planning to spend $150,000 on promotion in the next financial year. As soon as he learned this, Sam called his finance manager and said, "I want to spend $150,000 on promotion next year." In this case, which method of promotional budgeting does Sam use?

Accepted Answer

Sam is using the competitive-parity method where he is matching his promotion spending based on his competitor's spending.

Question 10

Which of the following methods is used by companies to set their advertising budgets based on the industry average?

Accepted Answer

The competitive-parity method involves setting the advertising budget based on what competitors are spending in the industry. This is a common approach used by companies to ensure they are not at a disadvantage in terms of advertising spending compared to their competitors.

Question 11

Using a(n) ________ strategy, the producer directs its marketing activities toward final consumers to induce them to buy the product.

Accepted Answer

A pull strategy is focused on the end consumer, with marketing activities aimed at creating demand and drawing consumers towards the product. This is in contrast to a push strategy, which is aimed at intermediaries or resellers in order to get them to push the product to consumers. A blitz strategy is not a commonly used marketing strategy term, while buzz and pulse strategies are more focused on generating excitement and interest rather than directly inducing consumers to buy.

Question 12

Which of the following promotional tools is the most effective in building up buyers' preferences, convictions, and actions?

Accepted Answer

Personal selling is the most effective promotional tool for building up buyers' preferences, convictions, and actions because it involves direct communication between the seller and the buyer, allowing the seller to address specific concerns and tailor their message to the buyer's needs. Other promotional tools may create awareness or interest, but personal selling is best for conversion and building long-term relationships with customers.

Question 13

Under which promotional mix strategy does the producer direct its marketing activities toward channel members to induce them to carry the product and promote it to final consumers?

Accepted Answer

The push strategy focuses on channel members such as retailers, wholesalers, and distributors. The producer uses this strategy to persuade channel members to push the product to the end consumers by offering incentives such as discounts, trade promotions, and free samples. This strategy is effective for products that consumers are not actively seeking, such as new products or complex products.

Question 14

Which of the following statements is most likely true regarding the competitive-parity method?

Accepted Answer

The competitive-parity method involves setting promotion budgets to match the competitors' outlays. This method assumes that competitors are spending the appropriate amount on promotion and matches that expenditure. This method does not consider the company's goals or its unique marketing plan, which makes it less effective than other methods.

Question 15

Which of the following is the most logical budget-setting method?

Accepted Answer

The objective-and-task method is the most logical budget-setting method as it involves setting and prioritizing objectives, identifying necessary tasks to achieve those objectives, determining the costs associated with those tasks and creating a budget accordingly. This method is considered the most effective as it ensures that budgeting decisions are based on specific business objectives rather than being influenced by external factors such as competitor spending or current sales figures.

Question 16

Which of the following statements is most likely true regarding the objective-and-task method of budget setting?

Accepted Answer

The objective-and-task method requires managers to identify specific promotion objectives and then determine the tasks required to achieve those objectives, including the costs associated with each task. As a result, this method forces managers to explicitly specify their assumptions about the relationship between the money spent on promotion and the expected outcomes, making it the most likely true statement.

Question 17

The manufacturer of Crest toothpaste provides free samples of its toothpaste to dentists and encourages them to distribute these samples to their patients and to inform the patients about advantages of using Crest. The manufacturer of Crest toothpaste is using ________.

Accepted Answer

The answer of The manufacturer of Crest toothpaste provides free...

Question 18

Which of the following is most likely a shortcoming of advertising?

Accepted Answer

Advertising is impersonal and lacks the direct persuasiveness of company salespeople. While advertising can reach a mass audience, it cannot tailor the message specifically to each individual buyer and may not have the same level of personal connection as direct salespeople.

Question 19

Which of the following is a strength of advertising?

Accepted Answer

Advertising has the strength of reaching a large number of geographically dispersed buyers at a low cost per exposure, making it an efficient way to communicate with a broad audience.

Question 20

In most cases, what is the most expensive promotion tool?

Accepted Answer

Personal selling is often the most expensive promotion tool due to the high costs associated with employing and training sales personnel, as well as the time-intensive nature of one-on-one interactions.

Quiz 14: Engaging Consumers and Communicating Customer Value: Integrated Marketing Communications Strategy