Topic 1

Question 1

What is advertising?

Answer 1

Any form of paid communications by an identified sponsor aimed to inform or persuade a target audience about a product, service or organisation.

Question 2

How many commercial messages is the average US consumer exposed to per day?

Answer 2

1,000

Question 3

According to McDonald & Scott (2007), what was the first type of advertising?

Answer 3

Outdoor advertising. Traders and merchants from ancient Egypt, Greece and Rome told their community what they were selling at what price.

Question 4

What important economic change led to the explosion of wealth of trade, plus a media to advertise with them?

Answer 4

The industrial revolution, 1730-1830.

Question 5

What do we call a label designated to a product to differentiate it from others?

Answer 5

Consumer brand.

Question 6

What do we call a summary statement used to meaningfully differentiate a brand from its competitors?

Answer 6

Unique selling point (USP)

Question 7

According to McDonald and Scott (2007), newspaper advertising is second to TV advertising. What percentage of media expenditures do print ads account for?

Answer 7

30%

Question 8

Magazine ads are specifically targeted towards those who share common interests, values and lifestyles, these groupings are called:

Answer 8

consumer segments.

Question 9

How much was spent on advertising in 2015?

Answer 9

$574 billion

Question 10

How much was spent on advertising in 2018?

Answer 10

$668 billion

Question 11

According to McDonald and Scott (2007), from the 1800’s to the early 20th century, print ads predominantly used informational OR argument based ads, which included the use of facts to appeal to reason. This type of approach is called the:

Answer 11

hard sell approach.

Question 12

The hard sell approach uses show and tell, using a set of persuasive arguments to convince prospective buyers. This argument based approach was also called:

Answer 12

the reason why approach.

Question 13

In the early 1900’s, advertising adopted a different approach, which used emotional OR affect based advertising to convince consumers emotions and feelings. This type of approach is called the:

Answer 13

soft sell approach.

Question 14

Which type of approach is used for durable goods in richer countries?

Answer 14

Informational or argument based approach.

Question 15

Which type of approach is used for new or recalled products?

Answer 15

Informational or argument based approach.

Question 16

What type of approach is used for existing products?

Answer 16

Emotional or affect based approach.

Question 17

Which type of approach is used for non-durable, experimental goods in poorer countries?

Answer 17

Emotional or affect based approach.

Question 18

According to Tybout et al. (1981), what type of approach did McDonalds used to effectively overcome a rumour about worms in their hamburger meat?

Answer 18

Emotional based approach.

Question 19

What are the 3 main ways advertising aids in the functioning of society?

Answer 19

1. Facilitates competition between companies, consumer attention and preferences, choice and consumer financial resources.
2. Is the prime means for companies to inform consumers about their goods and services.
3. Is a key source of funding for major mass media using sponsorship (e.g. YouTube).

Question 20

What are the 2 main ways advertising aids the individual consumer?

Answer 20

1. Informs: creates non-evaluative consumer responses such as knowledge and beliefs.
2. Persuades: generates or changes an evaluative (valenced) response to make the advertised brand more favourable.

Question 21

What are the 4 stages of the product lifestyle cycle?

Answer 21

1. Introduction
2. Growth
3. Maturity
4. Decline

Question 22

What occurs during the introduction phase (1) of the product lifestyle cycle, and what its main objectives?

Answer 22

What occurs:

Inform potential customers, induce product trial, secure distribution to retail outlets, focus on higher income groups, prices set high due to high manufacturing costs.

Objectives:

Create brand awareness, knowledge and attitude.

Question 23

What occurs during the growth phase (2) of the product lifestyle cycle, and what are its main objectives?

Answer 23

What occurs:

Maintain promotional expenditures, lower prices to appeal to price sensitive buyers, improve product quality, add new features/models/accessories, enter new market segments, increase distribution, shift to product preference advertising.

Objectives:

Promote brand attitude and preference.

Question 24

What occurs during the maturity phase (3) of the product lifestyle cycle, and what are its main objectives?

Answer 24

What occurs:

Pursue new customers (convert people), enter new market segments, increase product used through more additional applications, improve product, modify marketing programs, find niche, markdown prices, increase ads and promos, increase research and development for product, supply product for private label branding.

Objectives:

Promote brand attitude, create brand loyalty, increase customer satisfaction.

Question 25

What occurs during the decline phase (4) of the product lifestyle cycle, and what are its main objectives?

Answer 25

What occurs?

Increase company’s investment to dominate market, maintain firm investment until uncertainties resolved, decrease investment by dropping unprofitable customer groups whilst increase increasing investment in profitable ones, milk the investment for cash, divest the line.

Objectives:

Purchase new target consumer groups.

Question 26

What is the best type of approach to use when there are problems associated with a product or the need to do a product recall?

Answer 26

Informational based approach.

Question 27

Persuasion

According to Knowles and Linn (2004), what are the two strategies advertisers can use to persuade customers?

Answer 27

1. Alpha.

2. Omega.

Question 28

Persuasion

A type of approach motivation that uses strong arguments which increase incentives for accepting a message position, is called an:

Answer 28

alpha strategy.

Question 29

Persuasion

A type of avoidance motivation that stops a consumer from moving away from a position, such as by using fear based appeals to reduce resistance, distraction techniques, is called an:

Answer 29

omega strategy.