Ch 3

Question 1

Media organizations provide an environment for a firm’s marketing communications message.

Answer 1

true

Question 2

A company that follows a centralized system and contains a separate advertising department cannot make use of an outside advertising agency.

Answer 2

false

Question 3

Abound Industries is a multiproduct firm. In addition to competing with outside manufacturers, each brand it produces actually competes against other brands within the company. Abound brands also compete for corporate resources, leading to unproductive rivalries. The type of approach Abound Industries has been using is called

Answer 3

a decentralized approach.

Question 4

An ad agency is a service organization that specializes in planning and executing advertising programs for its clients.

Answer 4

true

Question 5

Money Backed Enterprises still uses an agency commission system designed in the 1990s. They say that the commission system of agency compensation is more flexible; by charging a large commission, they have the flexibility to perform other services for large clients at no extra charge. In addition, the commission system

Answer 5

is easy to administer.

Question 6

Database development and management is becoming one of the most important services provided by direct-response agencies.

Answer 6

true

Question 7

Proponents of integrated marketing communications (IMC) services argue that maintaining control of the entire promotional process achieves greater synergy among the communications program elements.

Answer 7

true

Question 8

CL Inc., a manufacturing firm, decided to outsource its entire advertising function. The company launched a new product and paid for the campaign to promote the product. In this scenario, CL Inc., is

Answer 8

a client

Question 9

Joy Fruit Juices took the help of a company called Innovators Inc. to create and produce the communication message for its products and in return paid Innovators $20,000 as compensation. However, the final decisions regarding the advertising and promotional program rested with Joy Fruit Juices. In this scenario, Innovators is

Answer 9

an advertising agency

Question 10

Blueberry Designs, a boutique, has an advertising department along with sales, marketing, and research departments. The manager of the advertising department heads and controls all the functions of that department, such as budgeting, planning media schedules, and administering the sales promotions programs for all of the company’s products and services. Blueberry Designs employs a

Answer 10

centralized marketing system

Question 11

Which term is also used to describe the position of a brand manager who is responsible for the total management of the brand, including planning, budgeting, sales, and profit performance?

Answer 11

product manager

Question 12

When a company has one or more additional layers of management above brand managers to coordinate the efforts of all the brand managers handling a related group of products, it is generally using a ________ system.

Answer 12

category management

Question 13

Superagencies are

Answer 13

an amalgamation of several small, medium, and large advertising agencies.

Question 14

Leon works for an ad agency and is responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel. He also presents the agency’s recommendations to the client and obtains approval from them. Leon has a strong marketing background and understands the advertising process comprehensively. What is Leon’s position in the organization?

Answer 14

account executive

Question 15

NW Inc. specializes in buying radio, television, and newspaper space at discounted rates. Yummy Foods approaches NW Inc. to buy newspaper space at less than market rate. NW’s personnel also help Yummy Foods plan their media strategies. However, they do not perform any other functions. In this scenario, NW Inc. is an example of

Answer 15

a media specialist company

Question 16

Under ________, the client agrees to pay the agency a fee based on the expenditure of its work plus some agreed-on profit margin, often a percentage of total costs.

Answer 16

a cost-plus system

Question 17

According to the survey conducted by the Association of National Advertisers, which of the following is a primary qualitative criterion that is used to evaluate the performance of ad agencies?

Answer 17

teamwork

Question 18

Mars Inc. is a specialized agency that provides various services such as database management, infomercial production, creative services, telemarketing, research, and media services. In this scenario, Mars Inc. is

Answer 18

a direct-marketing agency

Question 19

Seth works for Don Jagoda Associates, an agency that provides promotional planning, creative research, tie-in coordination, premium design and manufacturing, and contest/sweepstakes management, among other services. What type of specialized services agency is Don Jagoda Associates?

Answer 19

sales promotion agency

Question 20

Which of the following is not one of the pros of integrated marketing services?

Answer 20

Synergy and economies of scale are difficult to achieve.

Question 21

GSI industries is looking for several dedicated services to develop and maintain their website and digital marketing. They also need support to create a strategy and media plan to refresh their brand. A medium-size company, GSI may want to engage the services of ________ to coordinate these IMC services.

Answer 21

an agency of record

Question 22

A small entrepreneurial firm for the last five years, Clear Cite industries is ready to broaden their efforts to expand beyond the tri-state area to a nationwide market. With their growth, they have identified the need for new roles in their organization. They have a number of salespeople, but their promotions effort has been lacking. They have determined a critical role with key responsibilities for coordinating input from people both inside and outside the organization to help define the advertising and promotion process. This position is called

Answer 22

an advertising manager.

Question 23

Sum Company has depended on key people in each product line to come up with advertising to promote their individual products. This approach has not produced the results they anticipated, and the board is seeking a change in process. They are now looking for an advertising agency that offers its clients a full range of marketing, communications, and promotion services, including planning, creating, and producing the advertising, performing research, and selecting media. Sum is looking for ________.

Answer 23

a full-service agency

Question 24

Firm Software Co. has audited their advertising budget for the last three years, identifying a pattern of expenses. They found that their media expenses were fairly consistent from year to year. They decided to change their compensation plan for their agency from a monthly billing to a monthly fee where media commission received by the agency will be credited against the fee. If the commissions are less than the fee, Firm Software will make up the difference in a quarterly billing cycle. This form of commission is called ________ combination.

Answer 24

a fee-commisson

Question 25

Reflective Enterprises has depended on magazine, newspaper, and television advertising for most of their advertising efforts. They are losing market share. They recognize that they need to change their strategy to reach an audience that rarely engages in these forms of media. They are looking for a new agency partner to develop a social media campaign. To help develop the resources to support this new direction, the VP of marketing engages the services of a

Answer 25

digital agency