Question 1

Why do many brands with a large market share spend proportionally less on advertising compared to brands with small market share?
A) Beyond a certain volume of promotion,diminishing returns set in.
B) Certain industries have a practice of spending a low amount of dollars,relative to sales,on advertising.
C) There is no minimum level of exposure for advertising to have an effect on sales.
D) Advertising will not stimulate economic growth for the industry.
E) The firms with large market share do not understand the advertising-to-sales relationship.

Accepted Answer

Once a brand has a large market share, it has already gained significant recognition and trust from consumers. Therefore, the marginal benefit of advertising decreases as the market share grows, eventually reaching a point of diminishing returns. It becomes more cost-effective for these brands to invest in other areas, such as product development or customer service, to maintain their market position rather than investing heavily in advertising.

Question 2

_____ advertising is designed to enhance a company's image rather than promote a particular product.
A) Publicity
B) Institutional
C) Pioneering
D) Selective
E) Image

Accepted Answer

Institutional advertising is focused on promoting the overall image of the company, rather than specific products or services. Its aim is to create a positive perception of the company in the minds of consumers, stakeholders, and the general public. Publicity refers to any unpaid form of promotion, while pioneering advertising is used to introduce new products or services to the market. Selective advertising targets specific groups of consumers, while image advertising focuses on creating a distinctive brand personality or identity.

Question 3

Amway runs advertisements that show how people who sell Amway products are involved in helping their communities through tutoring students and cleaning up the environment.These ads are examples of _____ advertising.
A) product
B) institutional
C) pioneering
D) environmental
E) comparative

Accepted Answer

The advertisements are promoting the reputation of the company and the positive impact its representatives have on their communities, rather than focusing solely on the products. This is an example of institutional advertising.

Question 4

How does advertising affect consumers?
A) changes cultural practices and conventions
B) changes strongly held values
C) manipulates society against its will
D) changes negative attitudes to positive ones
E) makes people buy things they do not want

Accepted Answer

Advertising can influence and persuade consumers to have positive attitudes towards a product or brand which can ultimately lead to purchasing decisions. However, it is not necessarily true that advertising changes cultural practices or values, manipulates society against its will or makes people buy things they do not want.

Question 5

Crisis management should begin before a crisis occurs.

Accepted Answer

This statement is true. It is important for organizations to have a crisis management plan in place before a crisis occurs in order to be prepared to respond quickly and effectively when a crisis arises.

Question 6

Publicity consists of programs developed by a company to capitalize on the factors that will
enhance the firm's image and minimize those that generate negative images.

Accepted Answer

The statement describes public relations.Publicity is the outcome of these public relations efforts.

Question 7

The United States's top advertiser,according to dollars spent per year,is:
A) Sony Corporation
B) Time Warner
C) Procter & Gamble
D) General Motors Corporation
E) McDonald's Corp.

Accepted Answer

The answer of The United States's top advertiser,according to dollars...

Question 8

A unique form of institutional advertising called _____ advertising is a means for corporations to express their viewpoints on various controversial issues.
A) advocacy
B) persuasive
C) issue
D) comparative
E) image

Accepted Answer

Advocacy advertising is designed to promote a particular viewpoint or cause, often related to a controversial issue. It allows corporations to express their opinions and beliefs, while also trying to influence public opinion and policy decisions. The other options (persuasive, issue, comparative, and image) may be used in institutional advertising, but do not specifically refer to this unique form of advertising related to controversial issues.

Question 9

When The Home Depot introduced its Expo Design retailing concept,it spent several billion dollars on advertising and other promotions and successfully boosted its market share.As an advertising consultant,you would advise that Home Depot:
A) double its advertising budget in order to double its market share
B) maintain the current advertising budget and continue to focus on brand awareness and market share gains
C) slowly increase the amount spent on advertising and promotion to offset competitive advertisements
D) shift the budget dollars from advertising to sales promotion and personal selling due to a change in the product life cycle stage
E) focus on maintaining market share and spend proportionately less on advertising because additional expenditures would reap diminishing benefits

Accepted Answer

Increasing advertising spending beyond a certain point often results in diminishing returns, so focusing on maintaining market share with proportionately less spending is a more efficient strategy.

Question 10

AIG is a worldwide insurance and financial services provider.The company used _____ advertising when it published an ad in which it asked why the fifty states in the United States can't function as one nation like the members of the European Union.Companies established to do business in one EU country can do business in them all.This is not true in the United States where each state has different laws.
A) global
B) homogeneous
C) pioneering
D) advocacy
E) image

Accepted Answer

The company used advocacy advertising, as it attempted to advocate for one nation status in the United States like the members of the European Union.

Question 11

_____ is a form of impersonal,sponsor paid,one-way mass communication.
A) Publicity
B) Advertising
C) Promotion
D) Public Relations
E) Direct marketing

Accepted Answer

Advertising refers to sponsor-paid, one-way mass communication that is impersonal. Publicity is not paid for by the sponsor and can be personal or impersonal. Promotion encompasses various activities aimed at promoting a product or service, including advertising, personal selling, and sales promotion. Public relations involves managing and maintaining relationships between an organization and its various stakeholders, including the media, customers, and the public. Direct marketing involves targeted, personalized communication with potential customers.

Question 12

Lobbying,product publicity,and crisis management are all functions of public relations tools.

Accepted Answer

Lobbying, product publicity, and crisis management are all common functions and tools utilized in the practice of public relations.

Question 13

The sponsorship of NASCAR races is an example of a public relations activity.

Accepted Answer

The sponsorship of NASCAR races is a common public relations activity for companies looking to increase brand awareness and reach a large audience.

Question 14

Why do companies with new brands that have a small market share tend to spend proportionately more for advertising and sales promotions compared to those with large market share for existing products?
A) as a result of experiential marketing research
B) to create the appropriate level of institutional advertising
C) to determine which executional appeal is the most effective
D) to achieve a certain minimum level of exposure to measurably affect purchase habits
E) to prevent product cannibalization

Accepted Answer

Companies with new brands and small market share typically need to achieve a certain minimum level of exposure to measurably affect purchase habits. Therefore, they tend to spend proportionately more on advertising and sales promotions compared to those with large market share for existing products. Experiential marketing research, institutional advertising, and executional appeal are factors that may be considered in developing the advertising and sales promotion strategy, but they do not directly relate to the disproportionate spending for companies with new brands and small market share. Preventing product cannibalization may be a consideration for companies with multiple products within the same category, but it is not specific to companies with new brands and small market share.

Question 15

Advertising expenditures in the United States:
A) are large,but the industry is small with fewer than 300,000 employees
B) are staying level with little or no increase year to year
C) are completely controlled by the 200,000 advertising agencies in the United States
D) exceed $250 billion per year in the huge industry that employs over three million people
E) are dominated by the millions of small firms competing for business through price wars

Accepted Answer

The answer of Advertising expenditures in the United States:
A) are...

Question 16

Procter & Gamble's marketing efforts for its Pert shampoo include television commercials,billboards,magazine inserts,and radio spots.These activities are all activities of:
A) advertising
B) publicity
C) public relations
D) sales promotions
E) direct marketing

Accepted Answer

The marketing efforts mentioned are all forms of advertising, which include television commercials, billboards, magazine inserts, and radio spots. Advertising is a form of paid communication used to promote a product or service to a target audience.

Question 17

DuPont has an advertisement that shows police officers describing how they were shot at close range in the line of duty.The advertisement explains that the lives of these public servants were saved by Kevlar bullet-proof vests,and that Kevlar was invented by DuPont.This is an example of _____ advertising.
A) publicity
B) attribute
C) image
D) pioneering
E) institutional

Accepted Answer

This is an example of institutional advertising, which aims to establish a company's identity or reputation rather than promoting a specific product. The advertisement highlights DuPont's contribution to public safety through the invention of Kevlar, which is meant to improve the company's image and position as a socially responsible organization.

Question 18

People who drink Cheerwine (a cherry-flavored cola)are extremely loyal to this product that is primarily found in the Carolinas.Which of the following statements about how increased advertising of Cheerwine would affect extremely brand loyal users of Cheerwine is true?
A) The advertising would have no effect because loyal users of Cheerwine have a neutral frame of reference.
B) The advertising could encourage the loyal Cheerwine users to try other brands.
C) The advertising could create a positive frame of reference for the loyal Cheerwine users.
D) The advertising could have no effect due to the advertising response function.
E) The advertising could cause the loyal Cheerwine users to buy more.

Accepted Answer

Increased advertising could reinforce brand loyalty and encourage loyal users to purchase more of the product.

Question 19

The advertising response function helps marketers:
A) create ads that will be noticed by consumers each time the ad runs
B) use their advertising budgets wisely
C) calculate the break-even points for each product being advertised
D) determine the reach and frequency of specific media
E) select an executional appeal appropriate to the product being advertised

Accepted Answer

The advertising response function helps marketers to use their advertising budgets wisely by determining the optimal level of advertising spending needed to achieve a certain level of sales or business objectives, while avoiding overspending. The function takes into consideration factors like the size of the target market, the effectiveness of different advertising media, and the impact of advertising on consumer behavior. It helps marketers to establish a clear link between their advertising expenditure and business outcomes, and to optimize their campaigns for maximum return on investment. While the other options may also be considerations in advertising, they are not directly related to the advertising response function.

Question 20

A candy store only runs newspaper advertisements the week before holidays,such as Valentine's Day,Easter,and Halloween.This is an example of a flighted schedule.

Accepted Answer

The answer of A candy store only runs newspaper advertisements...

Quiz 15: Advertising and Public Relations

Why do many brands with a large market share spend proportionally less on advertising compared to brands with small market share?

_____ advertising is designed to enhance a company's image rather than promote a particular product.

Amway runs advertisements that show how people who sell Amway products are involved in helping their communities through tutoring students and cleaning up the environment.These ads are examples of _____ advertising.

How does advertising affect consumers?

Crisis management should begin before a crisis occurs.

Publicity consists of programs developed by a company to capitalize on the factors that will enhance the firm's image and minimize those that generate negative images.

The United States's top advertiser,according to dollars spent per year,is:

A unique form of institutional advertising called _____ advertising is a means for corporations to express their viewpoints on various controversial issues.

When The Home Depot introduced its Expo Design retailing concept,it spent several billion dollars on advertising and other promotions and successfully boosted its market share.As an advertising consultant,you would advise that Home Depot:

_____ is a form of impersonal,sponsor paid,one-way mass communication.

Lobbying,product publicity,and crisis management are all functions of public relations tools.

The sponsorship of NASCAR races is an example of a public relations activity.

Why do companies with new brands that have a small market share tend to spend proportionately more for advertising and sales promotions compared to those with large market share for existing products?

Advertising expenditures in the United States:

Procter & Gamble's marketing efforts for its Pert shampoo include television commercials,billboards,magazine inserts,and radio spots.These activities are all activities of:

People who drink Cheerwine (a cherry-flavored cola) are extremely loyal to this product that is primarily found in the Carolinas.Which of the following statements about how increased advertising of Cheerwine would affect extremely brand loyal users of Cheerwine is true?

The advertising response function helps marketers:

A candy store only runs newspaper advertisements the week before holidays,such as Valentine's Day,Easter,and Halloween.This is an example of a flighted schedule.