Final exam pool items (Chs. 9, 11, 12, 13, 14, 15 & 17 not 18)


Chapter 15—Advertising and Public Relations



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Chapter 15—Advertising and Public Relations

MULTIPLE CHOICE

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



a.

Publicity

b.

Advertising

c.

Promotion

d.

Public relations

e.

Direct marketing

ANS: B PTS: 1 REF: 223 OBJ: 15-1 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Promotion

2. Procter & Gamble's marketing efforts for its Dawn dishwashing liquid include television commercials, billboards, magazine inserts, and radio spots. These activities are all activities associated with:

a.

advertising

b.

publicity

c.

public relations

d.

sales promotions

e.

direct marketing


ANS: A

Advertising is any form of impersonal, paid communications in which the sponsor is identified.

PTS: 1 REF: 223 OBJ: 15-1 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion

3. Advertising expenditures in the United States:



a.

are large, but the industry is small with fewer than 400,000 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

ANS: A


Advertising is a visible but small industry. Advertising spending is increasing and is dominated by the largest firms.

PTS: 1 REF: 223 OBJ: 15-1 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Strategy

4. 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 Corporation

ANS: C PTS: 1 REF: 223 OBJ: 15-1 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Promotion

5. 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.

ANS: A


There is a saturation point for advertising.

PTS: 1 REF: 223 OBJ: 15-1 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

6. 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

ANS: B


The advertising response function is a phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing results.

PTS: 1 REF: 224 OBJ: 15-1 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Strategy

7. 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 a 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

ANS: D


There are two reasons why companies with new brands with small market share tend to spend proportionately more for advertising and sales promotions compared to those with existing products and large market share. The first reason is in response to the advertising response function. The second reason is to create product awareness in the minds of the target audience.

PTS: 1 REF: 224 OBJ: 15-1 TYPE: Comp

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

8. When Gillette introduced its Venus razor for women, it spent several million dollars on advertising and other promotions and successfully boosted its market share. As an advertising consultant, you would advise that Gillette:

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


ANS: E

The advertising response function shows that beyond a certain level of spending for advertising and sales promotion, diminishing returns set in. As a mature, successful company, Gillette can choose to spend only as much as needed to maintain market share.

PTS: 1 REF: 224 OBJ: 15-1 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Strategy

9. 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

ANS: D


Advertising can affect attitudes but cannot alter values or force people to do things they do not want to do or believe are wrong.

PTS: 1 REF: 224 OBJ: 15-1 TYPE: Comp



TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Customer

10. 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.


ANS: E

Increased advertising will increase sales to brand-loyal consumers who already have a positive frame of reference for the product.

PTS: 1 REF: 224 OBJ: 15-1 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Customer

11. Procter & Gamble has run ads that promote its Children’s Safe Drinking Water program in which it shows its employees teaching people around the world how to purify their water. The program was instituted because 5,000 children die every day from diseases caused by unsafe water. These ads are examples of _____ advertising.

a.

product

b.

institutional

c.

pioneering

d.

environmental

e.

comparative


ANS: B

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

PTS: 1 REF: 224 OBJ: 15-2 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Customer

12. _____ 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

ANS: B PTS: 1 REF: 224 OBJ: 15-2 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Promotion

13. 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


ANS: E

Institutional advertising is designed to enhance the image of the company and asks for no action except maintaining a favorable attitude toward the advertiser and its goods and services.

PTS: 1 REF: 224 OBJ: 15-2 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion

14. 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

ANS: A PTS: 1 REF: 224 OBJ: 15-2 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Promotion

15. AIG is a worldwide insurance and financial services provider. The company used _____ advertising when it published an ad in which it asked why the 50 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


ANS: D PTS: 1 REF: 224 OBJ: 15-2 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model International Perspective

16. When Coca-Cola was accused of deliberately trying to poison consumers in India by selling them soft drinks allegedly containing 27 times the maximum amount of pesticide that is permissible, Coke ran ads in national newspapers describing how much care it takes to guarantee the safety of the products it produces. These ads were examples of _____ advertising.

a.

advocacy

b.

selective

c.

product

d.

differential

e.

image


ANS: A

Advocacy advertising is a means for corporations to express their viewpoints on various controversial issues or respond to media attacks.

PTS: 1 REF: 224 OBJ: 15-2 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion | TB&E Model Customer

17. Unlike advertising that establishes or maintains a company's identity, _____ advertising touts the benefits of a specific good or service.



a.

selective

b.

cooperative

c.

advocacy

d.

image

e.

product

ANS: E PTS: 1 REF: 225 OBJ: 15-2 TYPE: Def

TOP: AACSB Reflective Thinking | TB&E Model Promotion

18. General Motors runs magazine advertisements that encourage the purchase of Cadillac automobiles. This is an example of _____ advertising.

a.

pioneering

b.

circumstantial

c.

product

d.

advocacy

e.

comparative


ANS: C

Product advertising touts the benefits of a specific product or service.

PTS: 1 REF: 225 OBJ: 15-2 TYPE: App

TOP: AACSB Reflective Thinking | TB&E Model Promotion

19. _____ advertising is used to stimulate demand for a new product or product category and is heavily utilized during the introductory stage of the product life cycle.



a.

Comparative

b.

Innovative

c.

Focused

d.

Image

e.

Pioneering


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