Marketing Management, 15e (Kotler)

Chapter 20 Managing Mass Communications: Advertising, Sales Promotions, Events and

Experiences, and Public Relations

1) An advertising ________ is a specific communications task and achievement level to be

accomplished with a specific audience in a specific period of time.
A) medium
B) objective
C) channel
D) budget
E) copy
Answer: B
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

2) ________ advertising aims to create brand awareness and knowledge of new products or new
features of existing products.
A) Informative
B) Corporate
C) Reinforcement
D) Persuasive
E) Reminder
Answer: A
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

3) When Lola asked what the advertising campaign should say, she was concerned with which of
the five Ms?
A) Mission
B) Money
C) Message
D) Media
E) Measurement
Answer: C
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Application of knowledge

1
Copyright © 2016 Pearson Education, Inc.
4) ________ advertising aims to create liking, preference, conviction, and purchase of a product
or service.
A) Corporate
B) Reminder
C) Persuasive
D) Reinforcement
E) Informational
Answer: C
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

5) Comparative advertising works best when ________.

A) it elicits cognitive and behavioral motivations simultaneously
B) the firm is trying to minimize brand dilution
C) consumers are processing advertising in a detailed, analytical mode
D) it elicits affective motivation, followed by cognitive motivation
E) the advertising message uses negative fear appeals
Answer: C
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

6) ________ advertising aims to stimulate repeat purchase of products and services.

A) Reinforcement
B) Comparative
C) Persuasive
D) Informational
E) Reminder
Answer: E
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

2
Copyright © 2016 Pearson Education, Inc.
7) The "Got Milk" campaign was intended to boost sagging milk consumption among
Californians in the 1990s. The campaign ads highlighted the inconvenience of running out of
milk when intended to be used with certain foods, such as cookies or muffins, advising
consumers to stock up on milk to avoid such inconveniences. The "Got Milk?" campaign is an
example of ________ advertising.
A) informational
B) reminder
C) institutional
D) comparative
E) reinforcement
Answer: B
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Analytical thinking; Application of knowledge

8) ________ advertising aims to convince current purchasers that they made the right choice.
A) Persuasive
B) Informational
C) Reinforcement
D) Reminder
E) Comparative
Answer: C
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

9) The predominant response function for advertising is often concave, but when it is S-shaped,
________.
A) sales are flat, and advertising does not generate any sales impact
B) any increase in advertising spending results in a proportionally positive increase in sales
C) any increase in advertising spending results in a proportionally negative decrease in sales
D) some positive amount of advertising is necessary to generate any sales impact, but sales
increases eventually flatten out
E) advertising is not necessary to generate any sales impact
Answer: D
Diff: 3
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Analytical thinking

3
Copyright © 2016 Pearson Education, Inc.
10) Which of the following conditions necessitates that the objective of advertising should be to
stimulate more usage of a product?
A) The advertised product belongs to a nascent product category.
B) The company is not the market leader.
C) The advertised brand is superior to the market leader.
D) The product class is mature.
E) Brand usage for the product is very high.
Answer: D
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

11) Which of the following statements is true of the factors that affect an advertising budget?
A) High-market-share brands usually require proportionately high advertising expenditure as a
percentage of sales to maintain share.
B) Brands in less-differentiated or commodity-like product classes require less advertising to
establish a unique image.
C) New products typically merit large advertising budgets to build awareness and to gain
consumer trial.
D) In a market with few competitors and moderate advertising spending, a brand must advertise
more heavily to be heard.
E) Established brands usually are supported with high advertising budgets, measured as a ratio to
sales.
Answer: C
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

12) Marketers often cut the cost of advertising dramatically by using consumers as their creative
team. This strategy is known as ________.
A) disintermediation
B) public relations
C) vertical integration
D) reintermediation
E) crowdsourcing
Answer: E
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

13) An advertising objective is a specific communications task and achievement level to be

accomplished with a specific audience in a specific period of time.
Answer: TRUE
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

4
Copyright © 2016 Pearson Education, Inc.
14) Persuasive advertising aims to create brand awareness and knowledge of new products or
new features of existing products.
Answer: FALSE
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

15) Reinforcement advertising aims to stimulate repeat purchase of products and services.
Answer: FALSE
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

16) When Staples introduced a new $69.99 paper-shredding device called the MailMate in 2006
by striking a two-episode deal with NBC's popular television program, The Office, it was using
product placement.
Answer: TRUE
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Application of knowledge

17) If the product class is mature, then the advertising objective is to convince the market of the
brand's superiority.
Answer: FALSE
Diff: 1
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

18) Puffery refers to simple exaggerations in advertisements that are not meant to be believed
and are considered illegal.
Answer: FALSE
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

19) Advertising elasticities were estimated to be higher for established (0.3) than for new (0.1)
products.
Answer: FALSE
Diff: 3
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Analytical thinking

5
Copyright © 2016 Pearson Education, Inc.
20) What you say (ad copy) is more important than the number of times you say it (ad
frequency).
Answer: TRUE
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Analytical thinking

21) Kraft utilized customers to name its new flavor of its iconic Vegemite product, and their
selection, iSnack 2.0, increased sales dramatically.
Answer: FALSE
Diff: 3
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Application of knowledge

22) In developing an advertising program, marketing managers can make the five major
decisions known as the five Ms. List and explain each of these Ms.
Answer: The five major decisions are:
1. Mission — sales goals and advertising objectives
2. Money — factors to consider: stage in PLC, market share and consumer base, competition
and clutter, advertising frequency, and product substitutability
3. Message — message generation, message evaluation and selection, message execution, and
social-responsibility review
4. Media — reach, frequency, impact, major media types, specific media vehicles, media
timing, and geographical media allocation
5. Measurement — communication impact and sales impact.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Application of knowledge

23) Explain the classification of advertising objectives.

Answer: The classification of advertising objectives includes:
• Informative advertising aims to create brand awareness and knowledge of new products or
new features of existing products.
• Persuasive advertising aims to create liking, preference, conviction, and purchase of a
product or service. Some persuasive advertising uses comparative advertising, which makes an
explicit comparison of the attributes of two or more brands. Comparative advertising works best
when it elicits cognitive and affective motivations simultaneously, and when consumers are
processing advertising in a detailed, analytical mode.
• Reminder advertising aims to stimulate repeat purchase of products and services.
• Reinforcement advertising aims to convince current purchasers that they made the right
choice.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

6
Copyright © 2016 Pearson Education, Inc.
24) Describe how advertising objectives are set to reflect the product class.
Answer: The advertising objective should emerge from a thorough analysis of the current
marketing situation. If the product class is mature, the company is the market leader, and brand
usage is low, the objective is to stimulate more usage. If the product class is new, the company is
not the market leader, but the brand is superior to the leader, then the objective is to convince the
market of the brand's superiority.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

25) Give a brief description of the various factors that affect advertising budget decisions.
Answer: The various factors that affect advertising budget decisions include:
• Stage in the product life cycle — New products typically merit large advertising budgets to
build awareness and to gain consumer trial. Established brands usually are supported with lower
advertising budgets, measured as a ratio to sales.
• Market share and consumer base — High-market-share brands usually require less
advertising expenditure as a percentage of sales to maintain share. To build share by increasing
market size requires larger expenditures.
• Competition and clutter — In a market with a large number of competitors and high
advertising spending, a brand must advertise more heavily to be heard. Even simple clutter from
advertisements not directly competitive to the brand creates a need for heavier advertising.
• Advertising frequency — The number of repetitions needed to put the brand's message across
to consumers has an obvious impact on the advertising budget.
• Product substitutability — Brands in less-differentiated or commodity-like product classes
(beer, soft drinks, banks, and airlines) require heavy advertising to establish a unique image.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

26) Briefly describe the role of television as an advertising medium.

Answer: Television is generally acknowledged as the most powerful advertising medium and
reaches a broad spectrum of consumers at low cost per exposure. TV advertising has two
particularly important strengths. First, it can vividly demonstrate product attributes and
persuasively explain their corresponding consumer benefits. Second, it can dramatically portray
user and usage imagery, brand personality, and other intangibles. Because of the fleeting nature
of the ad, however, and the distracting creative elements often found in it, product-related
messages and the brand itself can be overlooked. Moreover, the high volume of
nonprogramming material on television creates clutter that makes it easy for consumers to ignore
or forget ads.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

7
Copyright © 2016 Pearson Education, Inc.
27) What is the role of print media in advertising? What are the major advantages and
disadvantages associated with print advertising media?
Answer: Print media offer a stark contrast to broadcast media. Because readers consume them at
their own pace, magazines and newspapers can provide detailed product information and
effectively communicate user and usage imagery. At the same time, the static nature of the visual
images in print media makes dynamic presentations or demonstrations difficult, and print media
can be fairly passive.
The two main print media — magazines and newspapers — share many advantages and
disadvantages. Although newspapers are timely and pervasive, magazines are typically more
effective at building user and usage imagery. Newspapers are popular for local — especially
retailer — advertising. Although advertisers have some flexibility in designing and placing
newspaper ads, relatively poor reproduction quality and short shelf life can diminish the ads'
impact.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

28) What are the legal and social issues associated with advertising?
Answer: To break through clutter, some advertisers believe they have to be edgy and push the
boundaries of what consumers are used to seeing in advertising. In doing so, marketers must be
sure advertising does not overstep social and legal norms or offend the general public, ethnic
groups, racial minorities, or special-interest groups. A substantial body of laws and regulations
governs advertising. Under US law, advertisers must not make false claims, such as stating that a
product cures something when it does not. They must avoid false demonstrations, such as using
sand-covered Plexiglas instead of sandpaper to demonstrate that a razor blade can shave
sandpaper. It is illegal in the United States to create ads that have the capacity to deceive, even
though no one may actually be deceived. The challenge is telling the difference between
deception and "puffery" — simple exaggerations that are not meant to be believed and that are
permitted by law. Sellers in the United States are legally obligated to avoid bait-and-switch
advertising that attracts buyers under false pretenses. Advertising can play a more positive
broader social role. The Ad Council is a nonprofit organization that uses top-notch industry
talent to produce and distribute public service announcements for nonprofits and government
agencies. From its early origins with "Buy War Bonds" posters, the Ad Council has tackled
innumerable pressing social issues through the years. One of its recent efforts featured beloved
Sesame Street stars Elmo and Gordon exhorting children to wash their hands in the face of the
H1N1 flu virus.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Ethical understanding and reasoning

8
Copyright © 2016 Pearson Education, Inc.
29) What are the four types of advertising timing patterns available to marketers when launching
a new product?
Answer: In launching a new product, the advertiser must choose among continuity,
concentration, flighting, and pulsing.
• Continuity means exposures appear evenly throughout a given period. Generally, advertisers
use continuous advertising in expanding market situations, with frequently purchased items, and
in tightly defined buyer categories.
• Concentration calls for spending all the advertising dollars in a single period. This makes
sense for products with one selling season or related holiday.
• Flighting calls for advertising during a period, followed by a period with no advertising,
followed by a second period of advertising activity. It is useful when funding is limited, the
purchase cycle is relatively infrequent, or items are seasonal.
• Pulsing is continuous advertising at low-weight levels, reinforced periodically by waves of
heavier activity. It draws on the strength of continuous advertising and flights to create a
compromise scheduling strategy. Those who favor pulsing believe the audience will learn the
message more thoroughly, and at a lower cost to the firm.
Diff: 2
LO: 20.1: What steps are required in developing an advertising program?
AACSB: Reflective thinking

30) Place advertising, or out-of-home advertising, is a broad category that includes many
creative and unexpected forms to grab consumers' attention, including all of the following
EXCEPT ________.
A) billboards
B) yellow pages
C) public spaces
D) product placement
E) point of purchase
Answer: B
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

31) Which of the following is generally acknowledged as the most powerful advertising medium
and reaches a broad spectrum of consumers at low cost per exposure?
A) television
B) radio
C) newspapers
D) magazines
E) billboards
Answer: A
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

9
Copyright © 2016 Pearson Education, Inc.
32) TV advertising is considered to be particularly advantageous because ________.
A) the low volume of nonprogramming material on television makes it difficult for consumers to
ignore or forget ads
B) it provides detailed product information and effectively communicates user and usage
imagery
C) it can vividly demonstrate product attributes and persuasively explain their corresponding
consumer benefits
D) TV channels are very targeted, ads are relatively inexpensive to produce and place, and short
closings allow for quick response
E) it lets companies achieve a balance between broad and localized market coverage
Answer: C
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

33) According to researchers, which of the following is the correct order in which content of
print advertisements matter?
A) picture-headline-copy
B) copy-picture-headline
C) headline-copy-picture
D) picture-copy-headline
E) copy-headline-picture
Answer: A
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

34) Which of the following is the main advantage of radio as an advertising medium?
A) low competition
B) more attention than television
C) longer duration of ad exposure
D) flexibility
E) standardized rate structures
Answer: D
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

10
Copyright © 2016 Pearson Education, Inc.
35) ________ refers to simple exaggerations in advertisements that are not meant to be believed
and that are permitted by law.
A) Puffery
B) Boosterism
C) Astroturfing
D) Doublethink
E) Subliminal advertising
Answer: A
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

36) ________ is finding the most cost-effective media to deliver the desired number and type of
exposures to the target audience.
A) Media scheduling
B) Content analysis
C) Media selection
D) Communication design
E) Copy testing
Answer: C
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

37) The number of different persons or households exposed to a particular media schedule at
least once during a specified time period is known as ________.
A) range
B) impact
C) intensity
D) reach
E) frequency
Answer: D
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

38) The number of times within a specified time period that an average person or household is
exposed to an advertising message is known as ________.
A) impact
B) frequency
C) amplitude
D) reach
E) depth
Answer: B
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking
11
Copyright © 2016 Pearson Education, Inc.
39) The qualitative value of an exposure through a given medium is known as ________.
A) frequency
B) reach
C) amplitude
D) impact
E) range
Answer: D
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

40) Which of the following equations accurately describes the total number of exposures (E) of
an advertising message through a given medium?
A) E = reach × frequency
B) E = (reach × frequency) / impact
C) E = reach × frequency × impact
D) E = (reach + frequency) / impact
E) E = frequency / reach
Answer: A
Diff: 3
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

41) The weighted number of exposures (WE) of an advertising message over a given medium is
given by ________.
A) WE = reach × frequency
B) WE = (reach × frequency) / impact
C) WE = reach × frequency × impact
D) WE = (reach + frequency) / impact
E) WE = frequency / reach
Answer: C
Diff: 3
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

42) Under which of the following conditions is the reach of media the most important factor in
media selection?
A) when introducing frequently purchased brands
B) when going into a defined target market
C) when launching extensions of well-known brands
D) when there are strong competitors to a brand
E) when there is high consumer resistance to the product
Answer: C
Diff: 3
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking
12
Copyright © 2016 Pearson Education, Inc.
43) Under which of the following conditions is the frequency the most important factor in media
selection?
A) when introducing flanker brands
B) when launching infrequently purchased brands
C) when going into undefined target markets
D) when there is high consumer resistance to the product
E) when there is modest competition to the brand in the market
Answer: D
Diff: 3
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

44) What is the gross rating points (GRP) for a media schedule that reaches 60 percent of homes
with an average exposure frequency of 4 and impact of 1.5?
A) 10
B) 15
C) 160
D) 240
E) 360
Answer: D
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

45) What is the weighted number of exposures of a media schedule that reaches 80 percent of the
target audience, with an exposure frequency of 4 and impact value of 2?
A) 10
B) 160
C) 240
D) 320
E) 640
Answer: E
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

46) Which of the following is an advantage of using newspapers as an advertising medium?

A) long lifespan
B) high reproduction quality
C) huge "pass-along" audience
D) high level of targeting
E) good local market coverage
Answer: E
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking
13
Copyright © 2016 Pearson Education, Inc.
47) Which of the following is a disadvantage of using newspapers as an advertising medium?
A) lack of flexibility
B) high costs of advertisement space
C) poor reproduction quality
D) low believability
E) absence of local market coverage
Answer: C
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

48) Which of the following is an advantage of using television as an advertising medium?

A) high attention and reach
B) low absolute cost
C) absence of clutter
D) long duration of ad exposure
E) high audience selectivity
Answer: A
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

49) Which of the following is a disadvantage of using television as an advertising medium?

A) high absolute cost
B) low audience attention
C) lack of reach among audience
D) high audience selectivity
E) absence of clutter
Answer: A
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

50) Which of the following is an advantage of using radio as an advertising medium?

A) higher attention than television
B) standardized rate structures
C) long duration of ad exposure
D) high quality reproduction
E) high geographic selectivity
Answer: E
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

14
Copyright © 2016 Pearson Education, Inc.
51) Which of the following is a disadvantage of using direct mail as an advertising medium?
A) low audience selectivity
B) lack of flexibility
C) high competition within same medium
D) relatively high cost
E) lack of personalization of advertising message
Answer: D
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

52) Which of the following is an advantage of using magazines as an advertising medium?

A) high-quality reproduction
B) short ad purchase lead time
C) high efficiency in circulation
D) no ad competition in same medium
E) low cost of advertising
Answer: A
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

53) Which of the following is a disadvantage of using magazines as an advertising medium?

A) low geographic and demographic selectivity
B) long ad purchase lead time
C) low-quality reproduction
D) small "pass-along" readership
E) lack of credibility
Answer: B
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

54) Which of the following is a disadvantage of using outdoor media for advertising?
A) low flexibility
B) low repeat exposure
C) limited audience selectivity
D) high costs
E) greater competition
Answer: C
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

15
Copyright © 2016 Pearson Education, Inc.
55) Which of the following is an advantage of using Yellow Pages as an advertising medium?
A) low competition
B) high believability
C) short ad purchase lead time
D) greater scope for creativity
E) lack of clutter
Answer: B
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

56) Which of the following is a disadvantage of using Yellow Pages as an advertising medium?
A) high competition
B) poor local market coverage
C) low believability
D) lack of adequate reach
E) high total costs
Answer: A
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

57) Which of the following is a disadvantage of using the Internet as an advertising medium?
A) limited audience selectivity
B) increasing clutter
C) lack of interactive possibilities
D) relatively high costs involved
E) fleeting ad exposure time
Answer: B
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

58) Which of the following is a disadvantage of using newsletters as an advertising medium?

A) low audience selectivity
B) high chances of runaway costs
C) lack of adequate control
D) relatively high costs
E) lack of interactive possibilities
Answer: B
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

16
Copyright © 2016 Pearson Education, Inc.
59) Pepe Homes manufactures a range of bathroom accessories and fittings that include bathtubs,
shower stalls, etc. While deciding on an effective advertising media vehicle for its planned
advertising campaign, the marketing department decides that its advertising objectives would be
best achieved if they used a medium that would portray their brand as prestigious and a symbol
of luxury. To this effect, the medium should offer marketers a high degree of audience selectivity
and high-quality reproduction. Which of the following advertising media would best serve the
advertising purposes of Pepe Homes?
A) outdoor media
B) radio
C) magazines
D) television
E) newspapers
Answer: C
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking; Application of knowledge

60) Moonburst is a newly launched brand of energy drinks, one among many other recently
introduced competing brands. The advertising agency handling Moonburst's account decides that
to better promote Moonburst, it has to zero in on an advertising medium that would offer
immunity from the clutter of other brands, flexibility to alter its advertising message, and the
ability to fit in with the modest advertising budget. Also, the medium has to provide a high
repeat exposure of the advertising message to the target audience. The advertising agency would
be happy to trade-off audience selectivity and creative possibilities if the medium satisfies the
above criteria. Which of the following would be the best option for Moonburst?
A) outdoor media
B) radio
C) magazines
D) television
E) Yellow Pages
Answer: A
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking; Application of knowledge

61) Which of the following advertising practices involves advertisers paying filmmakers to have
their products make cameo appearances in movies and television shows?
A) brand extension
B) flyposting
C) co-branding
D) product placement
E) ambush marketing
Answer: D
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

17
Copyright © 2016 Pearson Education, Inc.
62) The popular music talent show American Idol has been generally acknowledged as the most
profitable TV series in US history, in terms of advertising and merchandising revenue. Major
sponsors of the show include Coca-Cola, AT&T Wireless, and iTunes, among others. Cups
bearing the Coca-Cola logo were a prominent prop found on the show's judges' tables. The show
also urged viewers to vote for contestants using AT&T's sms service. Contestants were routinely
shown rehearsing for their performances with the help of Apple iPods. Which of the following
advertising practices is apparent in this example?
A) ambush advertising
B) product placement
C) angel dusting
D) co-branding
E) subliminal advertising
Answer: B
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking; Application of knowledge

63) Which of the following media timing factors expresses the rate at which new customers enter
the market?
A) buyer turnover
B) purchase frequency
C) media reach
D) weighted number of exposures
E) advertising impressions
Answer: A
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?

64) ________ is the number of times the average buyer buys a product during the period.
A) Buyer turnover
B) Purchase frequency
C) Customer retention rate
D) Advertising impressions
E) Total number of exposures
Answer: B
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?

18
Copyright © 2016 Pearson Education, Inc.
65) In which of the following types of advertising timing patterns do exposures appear evenly
throughout a given period?
A) concentration
B) pulsing
C) flighting
D) continuity
E) frequency capping
Answer: D
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?

66) Which of the following types of advertising timing patterns calls for spending all advertising
dollars in a single period?
A) frequency capping
B) flighting
C) concentration
D) pulsing
E) continuity
Answer: C
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?

67) Dante is a media buyer with Shelvey Partners, an ad agency in San Francisco. He is currently
working on charting a media plan for the ads of a department store chain to target the upcoming
Thanksgiving weekend. Which of the following advertising timing patterns is best suited for
running these ads?
A) continuity
B) flighting
C) pulsing
D) concentration
E) frequency capping
Answer: D
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

68) Advertisements for which of the following product categories would merit a continuous
advertising timing pattern the most?
A) air conditioners
B) life insurance
C) breakfast cereal
D) automobiles
E) holiday package tours
Answer: C
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking; Application of knowledge
19
Copyright © 2016 Pearson Education, Inc.
69) ________ is an advertising timing pattern that calls for advertising during a certain period,
followed by a period with no advertising, followed by a second specific period of advertising
activity.
A) Pulsing
B) Continuity
C) Flighting
D) Concentration
E) Frequency capping
Answer: C
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?

70) Flighting as an advertising timing pattern is most useful when ________.

A) purchase cycle is rather frequent
B) substantial advertising budget is available
C) items are seasonal
D) tightly defined buyer categories exist
E) there are expanding market situations
Answer: C
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?

71) Advertisements for which of the following product categories would be most effective when
used with a flighting pattern?
A) breakfast cereal
B) detergents
C) beer
D) electric bulbs
E) refrigerator
Answer: E
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking; Application of knowledge

72) ________ is continuous advertising at low levels, reinforced periodically by waves of

heavier activity.
A) Flighting
B) Frequency capping
C) Pulsing
D) Concentration
E) Session capping
Answer: C
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

20
Copyright © 2016 Pearson Education, Inc.
73) ________ seeks to determine whether an ad is communicating effectively.
A) Copy testing
B) Flighting
C) Pulsing
D) Frequency capping
E) Square inch analysis
Answer: A
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

74) Share of ________ represents the proportion of company advertising of a product to all
advertising of that product.
A) wallet
B) mind
C) voice
D) market
E) cost
Answer: C
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

75) Established brands usually are supported with lower advertising budgets, measured as a ratio
to sales.
Answer: TRUE
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

76) Brands in highly differentiated product classes require heavy advertising to establish a
unique image.
Answer: FALSE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

77) Print advertising, newspapers and magazines, is generally acknowledged as the most
powerful advertising medium.
Answer: FALSE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

21
Copyright © 2016 Pearson Education, Inc.
78) Although newspapers are timely and pervasive, magazines are typically more effective at
building user and usage imagery.
Answer: TRUE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

79) Researchers studying print advertisements report that the picture, headline, and copy matter
in that order.
Answer: TRUE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

80) Reach of an advertising message is most important when launching new products, flanker
brands, extensions of well-known brands, or infrequently purchased brands.
Answer: TRUE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

81) The higher the forgetting rate associated with a brand, product category, or message, the
lower the warranted level of repetition.
Answer: FALSE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

82) The rationale behind place advertising is that marketers are better off reaching people where
they work, play, and shop.
Answer: TRUE
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

83) Outdoor advertising is more effective at creating new brand associations than enhancing
brand awareness or brand image.
Answer: FALSE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

22
Copyright © 2016 Pearson Education, Inc.
84) The macroscheduling decision calls for allocating advertising expenditures within a short
period to obtain maximum impact.
Answer: FALSE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

85) The forgetting rate is the rate at which the buyer forgets the brand; the higher the forgetting
rate, the more continuous the advertising should be.
Answer: TRUE
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking

86) Concentrated advertising is well suited for products with one selling season or related
holiday.
Answer: TRUE
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

87) An advertiser makes "local buys" when it buys TV time in just a few markets or in regional
editions of magazines.
Answer: FALSE
Diff: 1
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

88) What are the adjustments that marketers need to apply to the cost-per thousand measure
when selecting specific media vehicles?
Answer: Marketers need to apply several adjustments to the cost-per-thousand measure.
First, they should adjust for audience quality. For a baby lotion ad, a magazine read by 1 million
young mothers has an exposure value of 1 million; if read by 1 million teenagers, it has an
exposure value of almost zero. Second, adjust the exposure value for the audience-attention
probability. Readers of Vogue may pay more attention to ads than do readers of Newsweek.
Third, adjust for the medium's editorial quality (prestige and believability). People are more
likely to believe a TV or radio ad and to become more positively disposed toward the brand
when the ad is placed within a program they like. Fourth, consider ad placement policies and
extra services (such as regional or occupational editions and lead-time requirements for
magazines).
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

23
Copyright © 2016 Pearson Education, Inc.
89) Describe the adjustments that an advertiser of high-end laptops has to make to the cost-per-
thousand measure.
Answer: Student answers will vary. The advertiser needs to apply several adjustments to the
cost-per-thousand measure. First, they should adjust for audience quality. The product being
high-end laptops, it is better advertised in a magazine read by 1 million college-going kids rather
than 2 million housewives, in which case it would have an exposure value of almost zero.
Second, the exposure value for the audience-attention probability must be accounted for. Readers
of Chip or Digit may pay more attention to gadget ads than do readers of Newsweek. Third, the
medium's editorial quality (prestige and believability) should be considered. People are more
likely to believe a TV or radio ad and to become more positively disposed toward the brand
when the ad is placed within a program they like. To this effect, the ads can be placed within a
program like The Big Bang Theory. The fourth adjustment should be made in relation to ad
placement policies and extra services (such as regional or occupational editions and lead-time
requirements for magazines). Laptop ads would be better received and responded to in
magazines that have greater circulation in urban areas with an office-going population or
university towns with sizable student populations.
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Analytical thinking; Application of knowledge

90) Describe the communication-effect research method of evaluating advertising effectiveness.

Answer: Communication-effect research, called copy testing, seeks to determine whether an ad
is communicating effectively. Marketers should perform this test both before an ad is put into
media and after it is printed or broadcast. Pretest critics maintain that agencies can design ads
that test well but may not necessarily perform well in the marketplace. Proponents maintain that
useful diagnostic information can emerge and that pretests should not be used as the sole
decision criterion anyway. Many advertisers use posttests to assess the overall impact of a
completed campaign. If a company hoped to increase brand awareness from 20 percent to 50
percent and succeeded in increasing it to only 30 percent, then the company is not spending
enough, its ads are poor, or it has overlooked some other factor.
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

24
Copyright © 2016 Pearson Education, Inc.
91) Describe the methods used to measure sponsorship activities.
Answer: It's a challenge to measure the success of events. The supply-side measurement method
focuses on potential exposure to the brand by assessing the extent of media coverage, and the
demand-side method focuses on exposure reported by consumers. Supply-side methods
approximate the amount of time or space devoted to media coverage of an event, for example,
the number of seconds the brand is clearly visible on a television screen or the column inches of
press clippings that mention it. These potential "impressions" translate into a value equivalent to
the dollar cost of actually advertising in the particular media vehicle. Although supply-side
exposure methods provide quantifiable measures, equating media coverage with advertising
exposure ignores the content of the respective communications. The advertiser uses media space
and time to communicate a strategically designed message. Media coverage and telecasts only
expose the brand and don't necessarily embellish its meaning in any direct way. Although some
public relations professionals maintain that positive editorial coverage can be worth 5 to 10 times
the equivalent advertising value, sponsorship rarely provides such favorable treatment.
The demand-side method identifies the effect sponsorship has on consumers' brand knowledge.
Marketers can survey event spectators to measure recall of the event as well as resulting attitudes
and intentions toward the sponsor.
Diff: 2
LO: 20.2: How should marketers choose advertising media and measure their effectiveness?
AACSB: Reflective thinking

92) Which of the following elements of the marketing communications mix consists of a
collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase
of particular products or services by consumers, or the trade?
A) advertising
B) public relations
C) sales promotion
D) events and experiences
E) personal selling
Answer: C
Diff: 1
LO: 20.3: How should sales promotion decisions be made?

93) Which of the following is an example of a trade promotion?

A) free samples
B) discount coupons
C) display allowances
D) contests for sales reps
E) premiums
Answer: C
Diff: 1
LO: 20.3: How should sales promotion decisions be made?

25
Copyright © 2016 Pearson Education, Inc.
94) Which of the following is an example of a business and sales force promotion?
A) advertising allowance
B) free samples
C) contests for sales reps
D) display allowance
E) discount coupons
Answer: C
Diff: 1
LO: 20.3: How should sales promotion decisions be made?

95) Sales promotion expenditures increased as a percentage of budget expenditure for a number
of years. Growth has, however, recently slowed. Which of the following is a factor that has
contributed to the growth of sales promotion expenditures?
A) Many brands have come to be seen as dissimilar.
B) The efficiency of advertising as a promotion has improved.
C) The trade demands more deals from manufacturers.
D) Consumers have become less price-oriented.
E) The number of brands in the market has decreased.
Answer: C
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

96) According to consumer-packaged goods companies, which of the following effects is

attributed to the heavy use of sales promotion?
A) increased brand loyalty
B) focus on long-run marketing planning
C) improved brand-quality image
D) increased price sensitivity
E) greater coupon redemption rates
Answer: D
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Application of knowledge

97) Which of the following is an example of a manufacturer promotion?

A) price cuts
B) feature advertising
C) retailer coupons
D) high-value trade-in credit
E) retailer contests or premiums
Answer: D
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

26
Copyright © 2016 Pearson Education, Inc.
98) Which of the following is a sales promotion tool that is consumer franchise building in
nature?
A) price-off packs
B) contests and sweepstakes
C) consumer refund offers
D) trade allowances
E) frequency awards
Answer: E
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

99) Which of the following is a sales promotion tool that typically does NOT build brand image?
A) consumer refund offers
B) free samples
C) premiums related to the product
D) frequency awards
E) coupons that include a selling message
Answer: A
Diff: 2
LO: 20.3: How should sales promotion decisions be made?

100) When Fred sends in the box top from his cereal to receive a free DVD of a cartoon
featuring one of his favorite characters, he is responding to a ________.
A) self-liquidating premium
B) with-pack premium
C) reduced-price pack
D) banded pack
E) free in-the-mail premium
Answer: E
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Application of knowledge

101) Which of the following consumer promotion tools offers a free amount of a product or
service delivered door-to-door, sent in the mail, picked up in a store, attached to another product,
or featured in an advertising offer?
A) coupons
B) rebates
C) premiums
D) samples
E) price packs
Answer: D
Diff: 1
LO: 20.3: How should sales promotion decisions be made?

27
Copyright © 2016 Pearson Education, Inc.
102) ________ are certificates that entitle the bearer to a stated saving on the purchase of a
specific product.
A) Samples
B) Coupons
C) Rebates
D) Price packs
E) Premiums
Answer: B
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

103) ________ are consumer promotion tools that provide a price reduction after purchase rather
than at the retail shop.
A) Rebates
B) Cents-off deals
C) Price packs
D) Coupons
E) Premiums
Answer: A
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

104) Premiums, as a consumer promotion tool, are defined as ________.

A) offers to consumers of savings off the regular price of a product, flagged on the label or
package
B) certificates entitling the bearer to a stated saving on the purchase of a specific product
C) programs providing rewards related to the consumer's frequency and intensity in purchasing
the company's products or services
D) merchandise offered at a relatively low cost or free as an incentive to purchase a particular
product
E) values in cash or in other forms that are proportional to patronage of a certain vendor or group
of vendors
Answer: D
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

28
Copyright © 2016 Pearson Education, Inc.
105) ________ is a consumer promotion tool that involves inviting prospective purchasers to try
the product without cost in the hope that they will buy.
A) Sampling
B) Premium
C) Cross-promotion
D) Free trial
E) Rebate
Answer: D
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

106) Which of the following consumer promotion tools involves using one brand to advertise
another noncompeting brand?
A) tie-in promotion
B) frequency programs
C) specialty advertising
D) cross-promotion
E) patronage awards
Answer: D
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

107) Which of the following consumer promotion tools refers to explicit or implicit promises by
sellers that the product will perform as specified or that the seller will fix it or refund the
customer's money during a specified period?
A) product warranties
B) coupons
C) free trials
D) rebates
E) patronage awards
Answer: A
Diff: 1
LO: 20.3: How should sales promotion decisions be made?

108) Which of the following terms describes the practice of retailers purchasing a greater
quantity during a sales promotion period than they can immediately sell?
A) diverting
B) panic buying
C) straight rebuy
D) buyout
E) forward buying
Answer: E
Diff: 1
LO: 20.3: How should sales promotion decisions be made?

29
Copyright © 2016 Pearson Education, Inc.
109) Which of the following retailer practices involves buying more units than needed of a
product under a sales promotion in a region where the manufacturer offers a promotion deal and
shipping the surplus to their stores in non-deal regions?
A) diverting
B) panic buying
C) hoarding
D) stockpiling
E) forward buying
Answer: A
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

110) A ________ is a sales force promotion tool that aims at inducing the sales force or dealers
to increase their sales results over a stated period, with prizes (money, trips, gifts, or points)
going to those who succeed.
A) trade show
B) frequency program
C) sales contest
D) sweepstake
E) patronage award
Answer: C
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Application of knowledge

111) ________ time is the time necessary to prepare a promotional program prior to launching it.
A) Sell-in
B) Link
C) Setup
D) Lead
E) Hold
Answer: D
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

112) ________ time begins with the promotional launch and ends when approximately 95
percent of the deal merchandise is in the hands of consumers.
A) Lead
B) Hold
C) Setup
D) Link
E) Sell-in
Answer: E
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
30
Copyright © 2016 Pearson Education, Inc.
113) Rolex calls itself the "Official Timekeeper" of the Wimbledon and Australian Open lawn
tennis championships, by virtue of its sponsorships of the marquee events. What is the most
likely objective for Rolex's sponsorship deal with these events?
A) to permit merchandising or promotional opportunities
B) to express commitment to the community or on social issues
C) to create experiences and evoke feelings
D) to identify with a particular target market or lifestyle
E) to increase salience of company or product name
Answer: E
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Analytical thinking; Application of knowledge

114) Sales promotion consists of a collection of incentive tools designed to mainly stimulate
long-term brand associations of products or services with consumers or the trade.
Answer: FALSE
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

115) Sales promotions often attract brand switchers, who are primarily looking for low price,
good value, or premiums.
Answer: TRUE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

116) Sales promotions in markets of high brand similarity can produce a high sales response in
the short run but little permanent gain in brand preference over the longer term.
Answer: TRUE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

117) Incessant price reductions, coupons, deals, and premiums can devalue a product in buyers'
minds.
Answer: TRUE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

31
Copyright © 2016 Pearson Education, Inc.
118) The historical approach correlates past sales to past advertising expenditures using
advanced statistical techniques.
Answer: TRUE
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

119) Loyal brand buyers tend to change their buying patterns as a result of competitive
promotions.
Answer: FALSE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

120) Dominant brands offer sales promotion deals less frequently because most deals subsidize
only current users.
Answer: TRUE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

121) Examples of manufacturer promotions include price cuts and feature advertising.
Answer: FALSE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Application of knowledge

122) Sales promotion tools that typically are not brand building include price-off packs, contests
and sweepstakes, consumer refund offers, and trade allowances.
Answer: TRUE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Application of knowledge

123) Manufacturers handle forward buying and diverting by producing and delivering less than
the full order in an effort to smooth production.
Answer: TRUE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

124) Additional costs beyond the cost of specific promotions include the risk that promotions
might decrease long-run brand loyalty.
Answer: TRUE
Diff: 1
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking
32
Copyright © 2016 Pearson Education, Inc.
125) A price-off pack is an example of a consumer franchise building sales promotions.
Answer: FALSE
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

126) Compare and contrast advertising and sales promotion as marketing communication tools.
Answer: Sales promotion expenditures increased as a percentage of budget expenditure for a
number of years, although its growth has recently slowed. Several factors contributed to this
growth, particularly in consumer markets. Promotion became more accepted by top management
as an effective sales tool, the number of brands increased, competitors used promotions
frequently, many brands were seen as similar, consumers became more price-oriented, the trade
demanded more deals from manufacturers, and advertising efficiency declined. But the rapid
growth of sales promotion created clutter. Loyal brand buyers tend not to change their buying
patterns as a result of competitive promotions. Advertising appears to be more effective at
deepening brand loyalty, although we can distinguish added-value promotions from price
promotions. Price promotions may not build permanent total-category volume. Small-share
competitors may find it advantageous to use sales promotion because they cannot afford to match
the market leaders' large advertising budgets, nor can they obtain shelf space without offering
trade allowances or stimulate consumer trial without offering incentives. Dominant brands offer
deals less frequently, because most deals subsidize only current users.
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Analytical thinking

33
Copyright © 2016 Pearson Education, Inc.
127) What challenges do marketers face in managing trade promotions?
Answer: The growing power of large retailers has increased their ability to demand trade
promotion at the expense of consumer promotion and advertising. The company's sales force and
its brand managers are often at odds over trade promotion. The sales force says local retailers
will not keep the company's products on the shelf unless they receive more trade promotion
money, whereas brand managers want to spend their limited funds on consumer promotion and
advertising. Manufacturers face several challenges in managing trade promotions. First, they
often find it difficult to police retailers to make sure they are doing what they agreed to do.
Manufacturers increasingly insist on proof of performance before paying any allowances.
Second, some retailers are doing forward buying — that is, buying a greater quantity during the
deal period than they can immediately sell. Retailers might respond to a 10 percent-off-case
allowance by buying a 12-week or longer supply. The manufacturer must then schedule more
production than planned and bear the costs of extra work shifts and overtime. Third, some
retailers are diverting, buying more cases than needed in a region where the manufacturer offers
a deal and shipping the surplus to their stores in non-deal regions. Manufacturers handle forward
buying and diverting by limiting the amount they will sell at a discount, or by producing and
delivering less than the full order in an effort to smooth production. Ultimately, many
manufacturers feel trade promotion has become a nightmare. It contains layers of deals, is
complex to administer, and often leads to lost revenues.
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

128) What are some of the reasons sales promotion expenditures might increase as a percentage
of budget expenditure?
Answer: The promotion becomes more accepted by top management as an effective sales tool;
competitors used promotions frequently; consumers became more price-oriented, and trade
demanded more deals from manufacturers.
Diff: 2
LO: 20.3: How should sales promotion decisions be made?
AACSB: Reflective thinking

129) Becoming part of a personally relevant moment in consumers' lives through ________ can
broaden and deepen a company or brand's relationship with the target market.
A) advertisements
B) events and experiences
C) sales promotions
D) public relations
E) direct marketing efforts
Answer: B
Diff: 1
LO: 20.4: What are the guidelines for effective brand-building events and experiences?

34
Copyright © 2016 Pearson Education, Inc.
130) Mountain Dew is a brand known for sponsorships of adventure events such as
snowboarding and skateboarding competitions. What is the most likely objective of Mountain
Dew's sponsorship of these events?
A) to enhance corporate image
B) to express commitment to the community or on social issues
C) to entertain key clients or reward key employees
D) to create perceptions of key brand image associations
E) to become part of a personally relevant moment in consumers' lives
Answer: D
Diff: 2
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Analytical thinking; Application of knowledge

131) Audi models featured prominently in the 2010 blockbuster Iron Man 2, including main
character Tony Stark's personal R8 Spyder. Which of the following is the most rational
explanation for Audi's decision to associate itself with the movie?
A) to express commitment to the community or on social issues
B) to identify with a particular target market or lifestyle
C) to create experiences and evoke feelings
D) to become part of a personally relevant moment in consumers' lives
E) to entertain key clients or reward key employees
Answer: C
Diff: 3
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Application of knowledge

132) JBJ Sports is a leading sporting goods manufacturer from Atlanta. It has recently initiated a
program in association with the Food4Kids Foundation, which raises funds to promote
nutritional awareness of young children. The company plans to donate $1 for every item it sells
in the North American market. Also, JBJ has roped in professional sports teams associated with
it to wear the Food4Kids logo on their team gear. Which of the following best describes the
motivation for JBJ's involvement in the program?
A) entertaining key clients or rewarding key employees
B) expressing commitment to the community or on social issues
C) permitting merchandising or promotional opportunities
D) stimulating quicker or greater purchase of particular brands
E) identifying with a particular target market or lifestyle
Answer: B
Diff: 2
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Analytical thinking

35
Copyright © 2016 Pearson Education, Inc.
133) Which of the following factors forms the basis of assessing sponsorship activities through
supply-side methods?
A) consumers' brand knowledge
B) impact on sponsor's bottom line
C) extent of media coverage
D) brand exposure reported by consumers
E) sales pattern of sponsored products
Answer: C
Diff: 2
LO: 20.4: What are the guidelines for effective brand-building events and experiences?

134) Which of the following parameters forms the basis for measuring sponsorship effectiveness
using demand-side methods?
A) impact on market share of sponsor
B) amount of time a brand is clearly visible on a television screen
C) amount of relevant newsprint mentioning the sponsor
D) influence on consumers' brand knowledge of the sponsor
E) net impact on the sponsor's bottom line
Answer: D
Diff: 2
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Analytical thinking

135) An ideal event is unique but not encumbered with many sponsors, lends itself to ancillary
marketing activities, and reflects or enhances the sponsor's brand or corporate image.
Answer: TRUE
Diff: 1
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Reflective thinking

136) The supply-side method identifies the effect sponsorship has on consumers' brand
knowledge.
Answer: FALSE
Diff: 1
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Reflective thinking

137) Although supply-side exposure methods provide quantifiable measures, equating media
coverage with advertising exposure ignores the content of the respective communications.
Answer: TRUE
Diff: 2
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Reflective thinking

36
Copyright © 2016 Pearson Education, Inc.
138) Media coverage and telecasts only expose the brand and do not necessarily embellish its
meaning in any direct way.
Answer: TRUE
Diff: 1
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Reflective thinking

139) The supply-side measurement method focuses on potential exposure to a brand by assessing
the extent of media coverage, and the demand-side method focuses on exposure reported by
consumers.
Answer: TRUE
Diff: 1
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Reflective thinking

140) List the major objectives of events and experiences as promotion tools.
Answer: The major objectives of events and experiences as promotion tools are:
1. To identify with a particular target market or lifestyle
2. To increase salience of company or product name
3. To create or reinforce perceptions of key brand image associations
4. To enhance corporate image
5. To create experiences and evoke feelings
6. To express commitment to the community or on social issues
7. To entertain key clients or reward key employees
8. To permit merchandising or promotional opportunities
Diff: 1
LO: 20.4: What are the guidelines for effective brand-building events and experiences?
AACSB: Reflective thinking

141) ________ is a marketing communications tool that includes a variety of programs to

promote or protect a company's image or individual products.
A) Public relations
B) Advertising
C) Sales promotion
D) Personal selling
E) Direct marketing
Answer: A
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

37
Copyright © 2016 Pearson Education, Inc.
142) Which of the following functions of public relations departments involves presenting news
and information about the organization in the most positive light?
A) corporate communications
B) product publicity
C) lobbying
D) counseling
E) press relations
Answer: E
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

143) Which of the following describes the public relations function of lobbying?
A) sponsoring efforts to publicize specific products
B) advising management about public issues, and company positions and image during good
times and bad
C) presenting news and information about the organization in the most positive light
D) dealing with legislators and government officials to promote or defeat legislation and
regulation
E) promoting understanding of the organization through internal and external communications
Answer: D
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

144) What function does a company's public relations department perform when it promotes
understanding of the organization through internal and external communications?
A) lobbying
B) corporate communications
C) press relations
D) product publicity
E) counseling
Answer: B
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

38
Copyright © 2016 Pearson Education, Inc.
145) When a public relations department of a company advises management about public issues,
and company positions and image during good times and bad, it is performing the function of
________.
A) counseling
B) corporate communications
C) product publicity
D) lobbying
E) press relations
Answer: A
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

146) ________ refers to the task of securing editorial space — as opposed to paid space — in
print and broadcast media to promote or "hype" a product, service, idea, place, person, or
organization.
A) Advertising
B) Media planning
C) Communication design
D) Publicity
E) Copy testing
Answer: D
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

147) Which of the following is a medium of visual identity for a company?

A) annual reports
B) dress codes
C) press releases
D) seminars
E) trade shows
Answer: B
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

148) The easiest measure of marketing public relations effectiveness is the ________.
A) resultant effect on the company's sales figures
B) effect it has on its market capitalization
C) number of exposures carried by the media
D) changes observed in consumers' brand knowledge
E) impact it has on the company's market share
Answer: C
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking
39
Copyright © 2016 Pearson Education, Inc.
149) A public is any group that has an actual or potential interest in or impact on a company's
ability to achieve its objectives.
Answer: TRUE
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

150) The public relations function of lobbying involves advising management about public
issues as well as company positions and image during good times and bad.
Answer: FALSE
Diff: 1
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

151) The main objective of marketing public relations is to secure editorial space in print and
broadcast media to promote or "hype" a product, service, idea, place, person, or organization.
Answer: FALSE
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

152) Creative public relations can affect public awareness at a fraction of the cost of advertising.
Answer: TRUE
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

153) MPR can hold down promotion cost because it costs less than direct-mail and media
advertising.
Answer: TRUE
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

154) MPR can build credibility by placing stories in the media to bring attention to a product,
service, person, organization, or idea.
Answer: FALSE
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

40
Copyright © 2016 Pearson Education, Inc.
155) MPR is effective in blanketing local communities and reaching specific groups and hence
has to be planned separately from the less cost-effective advertising.
Answer: FALSE
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

156) MPR's contribution to a company's bottom line is the easiest to measure among all the
available promotion tools.
Answer: FALSE
Diff: 2
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Reflective thinking

157) What are the major functions performed by marketing public relations? Illustrate with
examples.
Answer: MPR goes beyond simple publicity and plays an important role in the following tasks:
• Launching new products: The amazing commercial success of toys such as LeapFrog, Beanie
Babies, and even the latest kids' craze, Silly Bandz, owes a great deal to strong publicity.
• Repositioning a mature product: In a classic PR case study, New York City had extremely
bad press in the 1970s until the "I Love New York" campaign.
• Building interest in a product category: Companies and trade associations have used MPR to
rebuild interest in declining commodities such as eggs, milk, beef, and potatoes and to expand
consumption of such products as tea, pork, and orange juice.
• Influencing specific target groups: McDonald's sponsors special neighborhood events in
Latino and African American communities to build goodwill.
• Defending products that have encountered public problems: PR professionals must be adept
at managing crises, such as those weathered by such well-established brands as Tylenol, Toyota,
and BP in 2010.
• Building the corporate image in a way that reflects favorably on its products: Steve Jobs's
heavily anticipated Macworld keynote speeches have helped to create an innovative, iconoclastic
image for Apple Corporation.
Diff: 3
LO: 20.5: How can companies exploit the potential of public relations?
AACSB: Application of knowledge

41
Copyright © 2016 Pearson Education, Inc.