Ch 7

Question 1

An important reason for setting specific objectives is that they provide a benchmark against which the success or failure of the promotional campaign can be measured.

Answer 1

true

Question 2

To be effective, marketing objectives must be quantifiable, realistic, and attainable.

Answer 2

true

Question 3

In the business world, the only marketing-mix variable that impacts sales results is promotion.

Answer 3

false

Question 4

Advertising can always make consumers buy a particular brand, even if it is priced higher than a competing brand.

Answer 4

false

Question 5

Direct-response advertising is one type of advertising that evaluates its effectiveness on the basis of sales.

Answer 5

true

Question 6

One of the foundational methods for setting objectives Innovation Marketers often uses is the DAGMAR approach. Working with Sum Company to measure advertising effectiveness, they are using this approach to guide Sum Company, focusing their attention on

Answer 6

communications-based rather than sales-based objectives.

Question 7

Innovation Marketers is helping Sum Company in their planning process by establishing communication objectives. Sum Company wants to make sure the budget limitations are also included, showing ________ between the communication analysis and determining the budget.

Answer 7

two-way interaction

Question 8

A budgeting technique used by Sum Company is profits equal gross margin minus advertising expenditures. This method is known as

Answer 8

marginal analysis.

Question 9

Sum Company’s new board realized that the purpose of their advertising and promotion has been ignored for a period of time. Innovation Marketers was hired to conduct an analysis and concluded there is a lack of systematic planning to create communication objectives tied to the budget. Sum Company has been practicing

Answer 9

arbitrary allocation.

Question 10

Jason gained responsibility for advertising at his firm. For which element of the marketing mix is he responsible?

Answer 10

promotion

Question 11

One of the objectives set by Halo, a manufacturer of food products, was “to introduce our new flavored milk, Milkola, and capture 10 percent of the total demand within one year.” This is an example of a ________ objective.

Answer 11

marketing

Question 12

Which of the following statements is true of marketing goals that are defined in terms of sales, profit, or market share increases?

Answer 12

They are usually not appropriate promotional objectives.

Question 13

Which of the following statements is true of sales objectives?

Answer 13

Sales are a function of many factors, not just advertising and promotion.

Question 14

Under the DAGMAR approach, an advertising goal involves a ________ task that is specific and measurable.

Answer 14

communications

Question 15

Which of the following statements is a correct conclusion based on research on advertising during a recession?

Answer 15

There is strong evidence that cutting back on advertising can hurt sales during and after a recession.

Question 16

According to the concept of marginal analysis,

Answer 16

as advertising expenses increase, sales and gross margins also increase to a point, but then they level off.

Question 17

The marginal analysis method is most suitable as a basis of budgeting for

Answer 17

direct-response advertising.

Question 18

Timber-On, a furniture-manufacturing company, has a total budget of $3 million for all its expenses in the current year. It has determined from the previous years that it will require about $2.5 million for production and operational purposes. The balance of $0.5 million has been allocated for advertising and promotion. Which of the following budgeting approaches is the firm following?

Answer 18

affordable method

Question 19

One of the main disadvantages of the percentage-of-sales method of promotional budgeting is that it

Answer 19

treats advertising as an expense.

Question 20

Doodle Corporation, a manufacturer of safety pins, decided that the company had to increase the awareness of its glow-in-the-dark pins among children and mothers. It also wished to increase the sales of its basic steel pins by 10% in the current financial year. It was convinced that, in order to attain these goals, it had to spend $1.5 million, so it allocated this amount for promotional expenditure. Which of the following promotional budgeting methods was used by Doodle Corporation?

Answer 20

Objective and task method