armstrong mai12 tif 12

Marketing: An Introduction, 12e (Armstrong/Kotler)

Chapter 12 Engaging Consumers and Communicating Customer Value: Advertising and Public Relations

1) ________ is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

A) Sales promotion

B) Personal selling

C) Advertising

D) Public relations

E) Direct marketing

Answer: C

Difficulty: Easy

Chapter LO: 1

Course LO: Describe the decisions involved in developing effective promotion mix strategies

2) Remington Motors releases a new line of hybrid electric vehicles called Electra. The line promises superior mileage and excellent horsepower in an environmentally friendly automobile. Remington decides to use advertising as the promotional tool for the car's launch. Which of the following would qualify as an advertisement for Electra?

A) a front-page notice of the release of Electra in all leading newspapers with the caption "Green Speed"

B) a press conference to discuss the various safety issues, actual mileage, and environmental features of Electra

C) the use of dedicated sales personnel in dealer showrooms to explain the qualities of Electra to potential customers

D) the involvement of a celebrity at the launch of Electra to endorse the hybrid car

E) a buyers-only lottery where Electra buyers have a chance of winning a prize

Answer: A

Difficulty: Moderate

Chapter LO: 1


AACSB: Analytic thinking

3) In a marketing communications mix, ________ refers to any short-term incentives to encourage the purchase of a product or service.

A) advertising

B) sales promotion

C) personal selling

D) crowdsourcing

E) public relations

Answer: B

Difficulty: Easy

Chapter LO: 1


4) Mercury Electric, a leading manufacturer of kitchen appliances, releases a new line of blenders called SpinPro. To boost sales, Mercury Electric gives scratch-and-win coupons to all buyers and provides a three-day trip to Hawaii for the winner. Which element of the promotion mix has Mercury Electric used in this scenario?

A) public relations

B) crowdsourcing

C) advertising

D) sales promotion

E) personal selling

Answer: D


Chapter LO: 1



5) In a promotion mix, ________ performs the functions of building a good rapport with entities outside the company, building up a good corporate image, and handling unfavorable rumors and events.

A) personal selling

B) sales promotion

C) direct marketing

D) advertising

E) public relations

Answer: E

Difficulty: Easy

Chapter LO: 1


6) ColaBlue, a soft drink manufacturer, is sued by an environmental group for not meeting certain safety standards in its waste disposal. ColaBlue remedies the problem by adding higher-grade filters and purifiers. Which of the following actions by ColaBlue would constitute a public-relations effort to address the effects of the lawsuit and the consequent damage to its brand image?

A) having well-trained personnel at retail outlets to explain the different ranges of products the company provides

B) tying up with local restaurants to promote exclusive sales of ColaBlue soft drinks

C) lowering prices of ColaBlue's products in the short term

D) holding a press conference to explain the remedial steps that ColaBlue has taken

E) making new advertisements for ColaBlue products and sponsoring shows on television

Answer: D


Chapter LO: 1



7) In a promotion mix, ________ occurs when a firm's sales force makes individual presentations to consumers for the purpose of promoting sales and building customer relationships.

A) advertising

B) public relations

C) crowdsourcing

D) merchandising

E) personal selling

Answer: E

Difficulty: Easy

Chapter LO: 1


8) Tilt Entertainment, a gaming design firm, has developed a new game called World Below. In order to get wider distribution, Tilt participates in the Gaming Entertainment Expo, which is attended by both sellers and consumers. Tilt sends a team of representatives for game presentation and negotiation and a team of professional gamers to showcase World Below at the Expo. The company also sends a team to sell its other games to consumers at the Expo. Which promotion mix tool has Tilt used in this scenario?

A) crowdsourcing

B) public relations

C) advertising

D) personal selling

E) crowdcasting

Answer: D


Chapter LO: 1



9) Dazed is a bar which mostly plays trance music and has a dedicated day every week for local bands to perform. To build strong customer relations, Dazed sends text messages to customers, telling them about happy hours, bands playing that week, dedicated genre nights, and other activities. Which of the following promotion mix tools does Dazed employ to reach target customers in this scenario?

A) public relations

B) personal selling

C) direct marketing

D) crowdcasting

E) retailing

Answer: C


Chapter LO: 1



10) In a promotion mix, ________ involves personally connecting with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

A) direct marketing

B) advertising

C) public relations

D) predictive analytics

E) indirect procurement

Answer: A

Difficulty: Easy

Chapter LO: 1


11) Which of the following is true of consumers in the new marketing communications model?

A) They are more reliant on traditional methods of marketing for product information.

B) They are less informed than before about companies and product marketing techniques.

C) They are more reliant on mass-media marketing methods for product information.

D) They are less powerful than before in affecting the way a company markets its products.

E) They are better equipped to find product and brand information on their own.

Answer: E


Chapter LO: 2

Course LO: Identify and discuss the factors influencing consumer buying behavior

12) Which of the following is an effect of the advancement of technology on marketing?

A) Fragmented markets have assimilated into a few mass markets.

B) Marketers go through more intermediaries to connect with consumers.

C) Consumers rely less on marketer-supplied information than in the past.

D) Marketers have increasingly moved toward mass-marketing techniques.

E) Marketers tend to supply less information to consumers than in the past.

Answer: C


Chapter LO: 2

Course LO: Discuss the fundamental concepts of marketing

AACSB: Information technology

13) Which of the following is an example of narrowcasting using advertisements?

A) running an ad for a new line of cars on cable TV

B) showing ads for diapers to would-be mothers in hospitals

C) handing out promotional leaflets for a new restaurant to passers-by

D) showing video game ads at a college football game

E) uploading movie ads on Web sites like YouTube

Answer: B

Difficulty: Difficult

Chapter LO: 2



14) Which technique is used by firms to deliver a unified and consistent image about their organizations and brands to consumers?

A) logistics information management

B) inventory control segmentation

C) niche market penetration

D) integrated marketing communications

E) global marketing management

Answer: D

Difficulty: Easy

Chapter LO: 2


15) Which of the following is true of marketing strategies that are being developed in the new marketing communications model?

A) They are more targeted, social, and engaging.

B) They target much larger customer segments.

C) They rely more on mass-media marketing techniques.

D) They use very little alternative media.

E) They include a greater number of print media ads.

Answer: A


Chapter LO: 2


16) Which of the following is true of advertising in the new marketing communications model?

A) Advertisers are increasingly shifting toward digital media.

B) Advertisers are spending more on broadcast advertising.

C) Advertisers are finding traditional media less expensive.

D) Advertisers are using less targeted media to reach customers.

E) Advertisers have replaced print catalogues with digital versions.

Answer: A


Chapter LO: 2


17) Which of the following is a function of an integrated marketing communications system?

A) designing products using environmentally friendly techniques

B) allowing suppliers or vendors to manage the inventory of products

C) controlling production levels by feedback received from customers

D) delivering a consistent message on the product to each brand contact

E) sharing company forecasting details with shareholders

Answer: D


Chapter LO: 2


18) Which of the following promotion tools would best reach a geographically dispersed mass audience in a short period of time?

A) direct mailing

B) telephone marketing

C) door-to-door selling

D) television advertising

E) printed-catalog marketing

Answer: D

Difficulty: Easy

Chapter LO: 2


19) Which of the following is a shortcoming of advertising?

A) It does not allow dramatization of the brand or company.

B) It only provides one-way communication with customers.

C) It is too customized and only attracts small, niche markets.

D) It reaches targeted customers too slowly in most cases.

E) It is the most costly promotion tool for companies.

Answer: B


Chapter LO: 2


20) Which of the following types of promotion tools requires the most interaction with a customer?

A) digital advertising

B) personal selling

C) sales promotion

D) public relations

E) television advertising

Answer: B

Difficulty: Easy

Chapter LO: 2


21) Which of the following promotion tools will most likely make a consumer feel the need to listen and immediately respond to a seller?

A) digital advertising

B) personal selling

C) sales promotion

D) public relations

E) television advertising

Answer: B

Difficulty: Easy

Chapter LO: 2


22) Which of the following is true of personal selling?

A) It is the most effective promotional tool for geographically dispersed buyers.

B) It allows firms to dramatize product offers through arts and visuals.

C) It is the most expensive promotional tool for companies to utilize.

D) It is an ineffective method for building long-term customer relationships.

E) It presents a firm's message as news rather than as a sales-directed communication.

Answer: C


Chapter LO: 2

Course LO: Describe the steps of the personal selling process and discuss the process of managing a sales force

23) A company that offers an early bird discount to the first fifty purchasers of a new product is using the promotional tool of ________.

A) direct marketing

B) public relations

C) advertising

D) personal selling

E) sales promotion

Answer: E

Difficulty: Easy

Chapter LO: 2

Course LO: Discuss the selection of appropriate sales promotion tools

24) Which of the following is most likely a difference between advertising and sales promotions?

A) Advertising is a sales-directed form of communication, while sales promotions are endorsed as company news.

B) Advertising is an invitation to buy the product, while a sales promotion is an incentive to buy the product immediately.

C) Advertising can be used to dramatize product offers, but sales promotion cannot be used for this purpose.

D) Advertising can trigger quick sales, while sales promotions cannot.

E) Advertising is not as effective in building long-term brand preferences as sales promotions are.

Answer: B


Chapter LO: 2


25) A company which uses a press release to explain the resignation of a former CEO is using ________ to maintain its brand image.

A) personal selling

B) sales promotion

C) public relations

D) direct marketing

E) advertising

Answer: C

Difficulty: Easy

Chapter LO: 2

Course LO: Discuss the selection of effective public relations tools

26) Which of the following is true of public relations?

A) It provides quick incentives to make product purchases.

B) It is not a sales-directed form of communication.

C) It involves training a dedicated sales force to meet customers.

D) It cannot be used to dramatize a product or company.

E) It is the most widely used promotional tool.

Answer: B


Chapter LO: 2


27) Which of the following is an example of a combination of sales promotions and direct marketing?

A) a company giving discounts on their product prices in order to gain a brand image

B) a company releasing a nationwide television ad about every buyer having a chance to win a lottery prize

C) a company holding a press conference to talk about their new product

D) a company's sales representatives meeting customers directly to present customized offerings

E) a company sending an e-mail to a customer about a discount on a product during a holiday season

Answer: E


Chapter LO: 2



28) Which of the following is true of direct marketing?

A) Its marketing message is fixed and does not change according to the customer's requirements.

B) It is suited for highly targeted marketing efforts and for building one-to-one customer relationships.

C) It is presented as company news rather than as a sales-directed communication.

D) It does not involve any interaction between the company and its customers.

E) It is an impersonal promotion tool that hinders two-way communication.

Answer: B


Chapter LO: 2


29) A company that uses telephone marketing to sell its products to customers is most likely using the promotion tool of ________.

A) advertising

B) public relations

C) direct marketing

D) retailing

E) merchandising

Answer: C

Difficulty: Easy

Chapter LO: 2


30) Which of the following promotion mix approaches involves a producer promoting a product to different channel members who in turn promote the product to customers?

A) direct marketing

B) a push strategy

C) the publish-subscribe method

D) a pull strategy

E) vertical integration

Answer: B

Difficulty: Easy

Chapter LO: 2

Course LO: Explain the various product and branding decisions marketers make

31) A ________ strategy involves a company spending a lot of money on advertising and promotion to induce consumers into buying the product by creating a demand vacuum.

A) push

B) direct marketing

C) vertical integration

D) pull

E) publish-subscribe

Answer: D

Difficulty: Easy

Chapter LO: 2


32) Pearl Sands is a resort in the town of Willington. It attracts the maximum number of customers in the summer. In the spring, Pearl Sands sponsors shows on TV and puts up billboards in Willington and the surrounding towns. The billboards advertise Pearl Sands as an ideal holiday spot, whether for a weekend getaway in the summer heat or for a family vacation. This is an example of a ________ strategy.

A) push

B) vertical integration

C) pull

D) publish-subscribe

E) direct marketing

Answer: C


Chapter LO: 2



33) Which of the following is the first step in developing an advertising program?

A) setting the advertising budget

B) developing an advertising strategy

C) developing a brand message

D) setting advertising objectives

E) evaluating advertising campaigns

Answer: D

Difficulty: Easy

Chapter LO: 3

Course LO: Describe the steps involved in developing an advertising campaign

34) ________ advertising is used heavily when introducing a new product category.

A) Reminder

B) Comparative

C) Personal

D) Informative

E) Persuasive

Answer: D

Difficulty: Easy

Chapter LO: 3


35) The objective of ________ advertising is to build primary demand.

A) reminder

B) comparative

C) personal

D) informative

E) persuasive

Answer: D

Difficulty: Easy

Chapter LO: 3


36) Inglast, a chocolate producer, is faced with a class action suit when customers find pieces of plastic in boxes of cocoa powder. Inglast settles the case and then releases an advertising campaign to show the new and improved safety seals on all containers of cocoa powder. Which kind of advertisement has Inglast most likely used?

A) classified

B) informative

C) comparative

D) personalized

E) reminder

Answer: B


Chapter LO: 3



37) The primary objective of ________ advertising is to build selective demand.

A) reminder

B) classified

C) personal

D) informative

E) persuasive

Answer: E

Difficulty: Easy

Chapter LO: 3


38) ________ advertising would most likely result in advertising wars between competitors.

A) Reminder

B) Comparative

C) Personal

D) Informative

E) Classified

Answer: B

Difficulty: Easy

Chapter LO: 3


39) ________ advertising primarily maintains brand relationships and is important for mature products.

A) Comparative

B) Persuasive

C) Personalized

D) Reminder

E) Classified

Answer: D

Difficulty: Easy

Chapter LO: 3


40) Zephyr Inc., an electronics manufacturer, wants to enter the commercial tracking device market with its latest product, FindIt. Unlike other tracking devices, FindIt is very small and relatively cheap, but it can be used only within small areas as it has a low detection-range. Which type of advertising would be best for FindIt?

A) informative advertising

B) reminder advertising

C) classified advertising

D) comparative advertising

E) personalized advertising

Answer: A


Chapter LO: 3



41) Which statement is most likely true about the affordable method of setting an advertising budget?

A) Spending on advertising is calculated based on the financial objectives a company wishes to accomplish.

B) Spending on advertising is calculated after operating expenses, and capital outlays are deducted from total revenues.

C) Spending on advertising is based on a predetermined percentage of current or forecasted sales for the year.

D) Spending on advertising is calculated as a percentage of the unit sales price.

E) Spending on advertising is based on a competitor's advertising outlays.

Answer: B


Chapter LO: 3


42) Which statement is most likely true about the affordable method of setting an advertising budget?

A) It typically overlooks how promotion affects sales.

B) It always results in overspending on advertising.

C) It is especially ideal for long-range market planning.

D) It leads to an overly fixed annual promotion budget.

E) It is most often used by firms with large advertising budgets.

Answer: A


Chapter LO: 3


43) Which method of setting advertising budgets best helps management think about the relationship between promotion spending, selling price, and profit per unit?

A) adaptive-control method

B) objective-and-task method

C) competitive-parity method

D) affordable method

E) percentage-of-sales method

Answer: E

Difficulty: Easy

Chapter LO: 3


44) In the competitive-parity method of setting an advertising budget, the budget is set based on ________.

A) a percentage of future sales

B) the total revenues that a company makes

C) the amount spent by similar companies in the same industry

D) objectives set by the company and the cost required to accomplish them

E) a percentage of current sales

Answer: C


Chapter LO: 3


45) According to the text, the most logical budget-setting method in advertising is the ________ method.

A) adaptive-control

B) objective-and-task

C) competitive-parity

D) affordable

E) percentage-of-sales

Answer: B

Difficulty: Easy

Chapter LO: 3


46) Which of the following best describes the term "Madison and Vine"?

A) utilizing the slice of life style of advertising

B) emphasizing reach over impact in advertising

C) using social media for advertising a brand

D) merging advertising with entertainment

E) voicing social concerns through advertising

Answer: D

Difficulty: Easy

Chapter LO: 3


47) The aim of ________ is to make ads so engaging or useful that people want to watch them.

A) branded entertainment

B) advertainment

C) social advertising

D) subliminal advertising

E) infotainment advertising

Answer: B

Difficulty: Easy

Chapter LO: 3


48) Which of the following is an example of branded entertainment?

A) a company placing its product in a movie scene

B) a company using a celebrity to endorse a product

C) a company airing its advertisements in movie theaters

D) a company using an acclaimed movie director to film an advertisement

E) a company using a famous song in its advertisement

Answer: A


Chapter LO: 3


49) Lazer Telecom, a cell phone manufacturer, has signed a contract with a production house to fund a new movie. The conditions of the agreement state that the movie will feature Lazer Telecom phones onscreen. What kind of advertising technique has Lazer Telecom most likely adopted in this example?

A) geofencing

B) advertainment

C) product placement

D) vertical integration

E) subliminal advertising

Answer: C


Chapter LO: 3



50) The ________ style of advertising shows ordinary people clearly using a product in a normal setting.

A) personality symbol

B) slice of life

C) mood or image

D) testimonial evidence

E) technical expertise

Answer: B

Difficulty: Easy

Chapter LO: 3


51) Trainstar, a sportswear equipment manufacturer, releases a new line of energy drinks called VitaZing. The television ad for the energy drink shows people jogging, working out in a gym, and doing aerobics. The actors then take a break to drink VitaZing, which visibly re-energizes them and leads them to continue exercising. Which advertising style is most likely used in the VitaZing ad?

A) scientific evidence

B) technical expertise

C) personality symbol

D) testimonial evidence

E) lifestyle

Answer: E


Chapter LO: 3



52) Which of the following best describes the personality symbol style of advertising?

A) using ordinary people to show how a product affects them in their daily lives

B) using scientific evidence to support claims about a product in an advertisement

C) using an animated character or mascot to represent a product in an advertisement

D) using a technical expert to recommend a product in an advertisement

E) using a celebrity to endorse a product in an advertisement

Answer: C


Chapter LO: 3


53) An ad that shows real-life examples of people whose lives have changed due to a product is an example of the ________ style of advertising.

A) scientific evidence

B) testimonial evidence

C) technical expertise

D) mood or image

E) fantasy

Answer: B

Difficulty: Easy

Chapter LO: 3


54) Which of the following is a disadvantage of standardization of advertising messages?

A) It gives rise to higher advertising costs.

B) It complicates the advertising process.

C) It is less responsive to local market needs.

D) It tends to suffer from poor coordination.

E) It gives rise to inconsistent messages.

Answer: C


Chapter LO: 3


55) Which of the following media is most suitable for advertising a product that needs to be demonstrated?

A) television

B) radio

C) newspaper

D) magazine

E) billboard

Answer: A


Chapter LO: 3


56) What is the primary disadvantage of outdoor advertising?

A) It provides low flexibility.

B) It permits low repeat exposure.

C) It provides poor positional selectivity.

D) It provides little audience selectivity.

E) It has high message competition.

Answer: D


Chapter LO: 3


57) What is the primary advantage of using television as an advertising medium?

A) It involves a low cost per exposure.

B) It supports a high degree of audience selectivity.

C) It involves low absolute costs.

D) It contains low ad clutter.

E) It permits prominent exposure.

Answer: A


Chapter LO: 3


58) Which of the following is a disadvantage of using online, mobile, and social media for advertising?

A) The costs are high.

B) Audience selectivity is low.

C) The audience controls ad exposure.

D) The interactive capabilities are low.

E) There is little scope for personalization.

Answer: C


Chapter LO: 3


59) Which of the following is a disadvantage of using a magazine as an advertising medium?

A) It has a poor pass-along readership.

B) It involves high costs.

C) It has low geographic selectivity.

D) It has low credibility and image.

E) It consists of low-quality reproduction.

Answer: B


Chapter LO: 3


60) Which of the following is an example of a firm utilizing public relations as a promotion tool?

A) a firm using its personal sales force at an expo to sell its products

B) a firm sending its catalog directly to customers through e-mail

C) a firm informing customers of special discounts on its Web site

D) a firm providing interesting information about a product to the news media

E) a firm using a celebrity to endorse a product in a television commercial

Answer: D


Chapter LO: 4



61) A firm that sends e-mail updates to customers about new products is engaging in personal selling.

Answer: FALSE


Chapter LO: 1


62) The new marketing communications model consists of promotional mixes that are designed to make traditional mass-media obsolete.

Answer: FALSE

Difficulty: Easy

Chapter LO: 2


63) Integrated marketing communications involves carefully coordinating a company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.

Answer: TRUE

Difficulty: Easy

Chapter LO: 2


64) Advertising can reach masses of geographically dispersed buyers at a low cost per exposure.

Answer: TRUE

Difficulty: Easy

Chapter LO: 2


65) Sales promotion is the best promotion tool to build personal and long-lasting relationships with customers.

Answer: FALSE

Difficulty: Easy

Chapter LO: 2


66) Public relations is the form of product advertising that is most widely utilized by U.S. firms.

Answer: FALSE

Difficulty: Easy

Chapter LO: 2


67) In a push promotion strategy, the producer promotes a product to channel members who in turn promote it to final consumers.

Answer: TRUE

Difficulty: Easy

Chapter LO: 2


68) A consumer demanding a product after watching its ad on television has responded to pull advertising.

Answer: TRUE


Chapter LO: 2


69) The push promotion strategy tends to be used by business-to-business marketers.

Answer: TRUE


Chapter LO: 2


70) An advertisement about a discount that can be availed if a product is ordered within 24 hours is an example of reminder advertising.

Answer: FALSE


Chapter LO: 3


71) Comparative advertising is a type of persuasive advertising.

Answer: TRUE

Difficulty: Easy

Chapter LO: 3


72) Reminder advertising is ideal for maintaining customer relationships with mature products.

Answer: TRUE

Difficulty: Easy

Chapter LO: 3


73) The affordable method of setting an advertising budget depends on the total revenues of a company.

Answer: TRUE

Difficulty: Easy

Chapter LO: 3


74) The principle behind the percentage-of-sales method of budget setting is viewing sales as the result of advertising.

Answer: FALSE


Chapter LO: 3


75) The competitive-parity method of setting promotion budgets prevents promotion wars between companies.

Answer: FALSE


Chapter LO: 3


76) Product placement is a form of brand integration.

Answer: TRUE

Difficulty: Easy

Chapter LO: 3


77) In the context of execution styles in advertising, using an animated character that represents a product in an advertisement is an example of an endorsement.

Answer: FALSE

Difficulty: Easy

Chapter LO: 3


78) In advertising, reach is a measure of the percentage of people in the target market who are exposed to an ad campaign during a given period of time.

Answer: TRUE

Difficulty: Easy

Chapter LO: 3


79) In advertising media selection, frequency describes the qualitative value of message exposure through a given medium.

Answer: FALSE

Difficulty: Easy

Chapter LO: 3


80) In any medium, the relevance of advertising content to an audience is less important than how many people the advertisement reaches.

Answer: FALSE

Difficulty: Easy

Chapter LO: 3


81) Newspapers, as a medium of advertising, provide poor local market coverage.

Answer: FALSE

Difficulty: Easy

Chapter LO: 3


82) Pulsing, as an ad pattern, means scheduling ads evenly over a given time period.

Answer: FALSE

Difficulty: Easy

Chapter LO: 3


83) Public relations can have a strong impact on public awareness at a much lower cost than advertising can.

Answer: TRUE

Difficulty: Easy

Chapter LO: 4


84) Usually, when using public relations, a company pays for the space or time in the media.

Answer: FALSE

Difficulty: Easy

Chapter LO: 4


85) Lobbying refers to a PR department maintaining relationships with shareholders and others in the financial community.

Answer: FALSE

Difficulty: Easy

Chapter LO: 4


86) What is a promotion mix? Define the major tools used in a promotion mix.

Answer: The specific blend of promotion tools that a company uses to persuasively communicate customer value and build customer relationships is known as promotion mix. A company's total promotion mixalso called its marketing communications mixconsists of the following promotion tools:

Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.

Personal selling: Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships.

Public relations: Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

Direct, digital, and social media marketing: Engaging in direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.


Chapter LO: 1


87) How has the new communications model changed the face of today's marketing communications?

Answer: (Students' answers may vary. The answer given below is indicative.)

The new communications model is changing the face of today's marketing communications in several ways. First, consumers are changing. In this digital age, wireless consumers are better informed and more communications empowered. Rather than relying on marketer-supplied information, they can use the Internet, social media, and other technologies to find information on their own. Second, marketing strategies are changing. As mass markets have fragmented, marketers are shifting away from mass marketing. More and more, they are developing focused marketing programs designed to build closer relationships with customers in more narrowly defined micromarkets. Finally, sweeping advances in digital technology are causing remarkable changes in the ways companies and customers communicate with each other. Although network television, magazines, newspapers, and other traditional mass media still remain very important, their dominance is declining. In their place, advertisers are now adding a broad selection of more-specialized and highly targeted media to reach smaller customer segments with more-personalized, interactive messages. In the new marketing communications world, rather than using old approaches that interrupt customers and force-feed them mass messages, new media formats let marketers reach smaller groups of consumers in more interactive, engaging ways. Mass-media costs are rising, audiences are shrinking, ad clutter is increasing, and viewers are gaining control of message exposure through technologies such as video streaming or DVRs that let them skip disruptive television commercials. As a result, marketers are shifting ever-larger portions of their marketing budgets away from old media mainstays and moving them to digital and other new-age media.


Chapter LO: 2


AACSB: Information technology

88) Why do today's firms need integrated marketing communications systems? How do firms benefit from such systems?


Consumers today are bombarded by commercial messages from a broad range of sources. But consumers don't distinguish between message sources the way marketers do. In the consumer's mind, messages from different media and promotional approaches all become part of a single message about the company. Conflicting messages from these different sources can result in confused company images, brand positions, and customer relationships. An integrated marketing communications system helps to integrate its many communications channels to deliver a clear, consistent, and compelling message about the organization and its brands. Integrated marketing communications calls for recognizing all touch points where the customer may encounter the company and its brands. Each brand contact will deliver a messagewhether good, bad, or indifferent. The company's goal should be to deliver a consistent and positive message to each contact. Integrated marketing communications leads to a total marketing communications strategy aimed at building strong customer relationships by showing how the company and its products can help customers solve their problems. Integrated marketing communications ties together all of the company's messages and images.


Chapter LO: 2



89) Watson Insurance is an insurance company that provides coverage for personal property and bodily injury. The company offers customized policy options for individual customers. High levels of interaction with customers are needed so that the company can provide the best customized service possible. What kind of promotional tool will best help Watson Insurance to sell its policies to its target customers?


Since Watson Insurance requires high levels of interactions with its customers, so as to customize its policies, the promotional tool of personal selling will best help Watson Insurance. Personal selling is the most effective tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions, and actions. It involves personal interaction between two or more people, so each person can observe the other's needs and characteristics and make quick adjustments. Personal selling also allows all kinds of customer relationships to spring up, ranging from matter-of-fact selling relationships to personal friendships. An effective salesperson keeps the customer's interests in mind to build a long-term relationship.


Chapter LO: 2


AACSB: Application of knowledge

90) Explain the use of sales promotions as a promotion mix tool.

Answer: Sales promotion includes a wide assortment of toolscoupons, contests, discounts, premiums, and othersall of which have many unique qualities. They attract consumer attention, offer strong incentives to purchase, and can be used to dramatize product offers and boost sagging sales. Sales promotions invite and reward quick response. Where advertising says, "Buy our product," sales promotion says, "Buy it now." Sales promotion effects are often short lived, however, and often are not as effective as advertising or personal selling in building long-run brand preference and customer relationships.


Chapter LO: 2


91) Contrast pull and push promotion mix strategies with suitable examples.


Marketers can choose from two basic promotion mix strategies: push promotion or pull promotion. A push strategy involves "pushing" the product through marketing channels to final consumers. The producer directs its marketing activities (primarily personal selling and trade promotion) toward channel members to induce them to carry the product and promote it to final consumers. For example, John Deere does very little promoting of its lawn mowers, garden tractors, and other residential consumer products to final consumers. Instead, John Deere's sales force works with Lowe's, Home Depot, independent dealers, and other channel members, who in turn push John Deere products to final consumers. Using a pull strategy, the producer directs its marketing activities (primarily advertising and consumer promotion, and direct and digital media) toward final consumers to induce them to buy the product. For example, Unilever promotes its Axe grooming products directly to its young male target market using TV and print ads, a brand Web site, its YouTube channel and Facebook page, and other channels. If the pull strategy is effective, consumers will then demand the brand from retailers.


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92) Kronos Inc., a car manufacturer, makes a car called Hover that runs on the force generated by super magnets. Kronos is the first company to use super-magnet technology in automobile manufacturing, aiming to reduce dependency on non-renewable fuels. If Kronos plans to release television advertisements about Hover, what kind of advertising objective should it pursue when introducing the new product into the market?


Hover uses a new technology in its production, and its advertisement should reflect that. Introducing a new product and potentially creating a new market requires an advertising campaign that stresses on its uniqueness and usability. The best advertising model to follow for Hover would be informative advertising. Informative advertising is used heavily when introducing a new product category. In this case, the objective is to build primary demand.


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93) What methods of setting advertising budgets are directly based on company revenues? What are the disadvantages of such methods?

Answer: One of the methods of setting advertising budgets based on company revenues is called the affordable method. The team sets the promotion budget at the level they think the company can afford. Small businesses often use this method, reasoning that a company cannot spend more on advertising than it has. They start with total revenues, deduct operating expenses and capital outlays, and then devote some portion of the remaining funds to advertising. This method of setting budgets completely ignores the effects of promotion on sales. It tends to place promotion last among spending priorities, even in situations in which advertising is critical to the firm's success. It leads to an uncertain annual promotion budget, which makes long-range market planning difficult. Other companies use the percentage-of-sales method, setting their promotion budget at a certain percentage of current or forecasted sales. Or they budget a percentage of the unit sales price. The percentage-of-sales method has advantages. It is simple to use and helps management think about the relationships between promotion spending, selling price, and profit per unit. Despite these claimed advantages, however, the percentage-of-sales method has little to justify it. It wrongly views sales as the cause of promotion rather than as the result.


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94) With a suitable example, show how advancements in technology help consumers avoid advertisement cluttering. What implications does this trend hold for advertisers?


Until recently, television viewers were pretty much a captive audience for advertisers. But today's digital wizardry has given consumers a rich new set of information and entertainment choices. With the growth in cable and satellite TV, the Internet, video streaming, tablets, and smartphones, today's viewers have many more options. Digital technology has also armed consumers with an arsenal of weapons for choosing what they watch or don't watch. Increasingly, thanks to the growth of DVR systems, consumers are choosing not to watch ads. Forty-six percent of American TV households now have DVRs, triple the number reached only five years earlier. It is estimated that DVR owners view only about 44 percent of the commercials during DVR playback. At the same time, video downloads and streaming are exploding, letting viewers watch entertainment on their own timewith or without commercials.

Due to these developments, advertisers can no longer force-feed the same old cookie-cutter message content to captive consumers through traditional media. Just to gain and hold attention, today's content must be better planned, more imaginative, more entertaining, and more emotionally engaging. Simply interrupting or disrupting consumers no longer works. Unless ads provide information that is interesting, useful, or entertaining, many consumers will simply skip by them.


Chapter LO: 3

Course LO: Identify and discuss the factors influencing consumer buying behavior


95) Yuran Inc., a designer and seller of lifestyle products and inexpensive furniture, has decided to engage in brand integration to advertise its products. The decision coincides with Yuran's plan to release a new line of coffee tables that fold easily and do not take up much space. What are the different ways in which Yuran can achieve brand integration?

Answer: Yuran can achieve brand integration through product placement. Product placement involves embedding brands as props within other programming like TV shows, either being used in a show, or being scripted into the show. The Yuran coffee table, for example, could be placed in sitcoms which generally have home settings. The product could even be worked into the show's overall storyline, making it an integral part of that episode. It can even have product placement in movies, video games, comic books, and even pop music. Yuran can achieve brand awareness by being part of the entertainment rather than interrupting it.


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96) What are the important factors that a marketer should be aware of when developing a creative concept for an advertisement?

Answer: An advertiser must develop a compelling creative conceptor big ideathat will bring a message strategy to life in a distinctive and memorable way. The creative concept will guide the choice of specific appeals to be used in an advertising campaign. Advertising appeals should have three characteristics. First, they should be meaningful, pointing out benefits that make the product more desirable or interesting to consumers. Second, appeals must be believable. Consumers must believe that the product or service will deliver the promised benefits. However, the most meaningful and believable benefits may not be the best ones to feature. Appeals should also be distinctive. They should tell how the product is better than competing brands.


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97) John works as a junior marketing executive at Frontloop Corporation. Frontloop Corporation manufactures guitars and other stringed instruments. It designs a new guitar, the Loneway, customized for the folk music genre. It plans to attract both folk artists and folk music lovers with its advertising campaigns and decides to exclusively use mass-media marketing techniques to advertise the Loneway guitar. What arguments can John use if he wants to convince Frontloop to adopt digital media instead of television advertising?


The Loneway guitars are specifically designed for folk music lovers, who form a niche market in music. Marketing these guitars through mass-media outlets like television will not help the company reach its target customers efficiently. The costs of mass media are rising, and their audiences are reducing in number. Though mass media have good coverage, they provide low audience selectivity. In contrast, the digital media, like the Internet, are relatively inexpensive and highly customer selective. They are also highly interactive. The Loneway guitar ads could be placed at strategic Web sites that folk music enthusiasts frequently visit. The ads can be uploaded on sites like YouTube, or Facebook, which are very apt at reaching target customers and niche markets. On the other hand, television advertising is highly cluttered and provides fleeting exposure to potential customers. Using the Internet also saves time as compared to television, which may have a higher ad purchase lead time. Hence, advertising the Loneway line of guitars through online advertising is the cheaper, more audience selective, and customer interactive outlet that the Frontloop Corporation can adopt, especially when compared to television advertising.


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98) "Brand standardization has many benefits." Counter this statement with reference to international advertising and provide an example.


Standardization produces many benefitslower advertising costs, greater global advertising coordination, and a more consistent worldwide image. It also has drawbacksit ignores the fact that country markets differ greatly in their cultures, demographics, and economic conditions. Thus, most international advertisers need to "think globally but act locally." They must develop global advertising strategies that make their worldwide efforts more efficient and consistent. Then they adapt their advertising programs to make them more responsive to consumer needs and expectations within local markets. For example, although Visa employs its "more people go with Visa" theme globally, ads in specific locales employ local language and inspiring local imagery that make the theme relevant to the local markets in which they appear.

Moreover, advertising media costs and availability differ vastly from country to country. Countries also differ in the extent to which they regulate advertising practices. Many countries have extensive systems of laws restricting how much a company can spend on advertising, the media used, the nature of advertising claims, and other aspects of the advertising program. Such restrictions often require advertisers to adapt their campaigns from country to country.

Thus, although advertisers may develop global strategies to guide their overall advertising efforts, specific advertising programs must usually be adapted to meet local cultures and customs, media characteristics, and regulations.


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AACSB: Diverse and multicultural work environments

99) What are the different functions of a public relations (PR) department?

Answer: PR departments may perform any or all of the following functions:

Press relations or press agency: Creating and placing newsworthy information in the news media to attract attention to a person, product, or service.

Product publicity: Publicizing specific products.

Public affairs: Building and maintaining national or local community relationships.

Lobbying: Building and maintaining relationships with legislators and government officials to influence legislation and regulation.

Investor relations: Maintaining relationships with shareholders and others in the financial community.

Development: Working with donors or members of nonprofit organizations to gain financial or volunteer support.


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100) How does public relations help in creating an integrated marketing communications system?

Answer: An integrated marketing communications system is required to deliver a consistent and positive message of a company's brand to its customers. Public relations is used to promote products, people, places, ideas, activities, organizations, and even nations. Companies use PR to build good relations with consumers, investors, the media, and their communities. Public relations can have a strong impact on public awareness at a much lower cost than advertising can. When using public relations, a company does not pay for the space or time in the media. Rather, it pays for a staff to develop and circulate information and manage events. If the company develops an interesting story or event, it could be picked up by several different media and have the same effect as advertising that would cost millions of dollars. Moreover, public relations has the power to engage customers and make them a part of the brand story. Hence, public relations works hand in hand with advertising within an integrated marketing communications program to help build brands and customer relationships.


Chapter LO: 4



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