229) Promotion objectives should possess three important qualities. They should cover a
specified time period, be measurable, and
A) unique in character.
B) appealing.
C) be designed for a well-defined target audience.
D) repeatable.
E) creative.
230) Which of the following companies had the largest U.S. promotional expenditures
(advertising plus all other promotions) according to Figure 17-7?
A) General Motors
B) AT&T
C) Johnson & Johnson
D) Comcast
E) Walmart
231) All of the following are methods that firms use to set their promotion budgets except
which?
A) objective and task
B) lost-horse forecast
C) competitive parity
D) percentage of sales
E) all you can afford
232) Percentage of sales budgeting refers to
A) matching a competitor’s absolute level of spending or the proportion per point of market
share.
B) allocating funds to a promotion only after all other budget items are covered.
C) allocating funds to a promotion as a percentage of past or anticipated sales, in terms of either
dollars or units sold.
D) determining a firm’s promotion objectives, outlining the tasks to accomplish these objectives,
and determining the advertising cost of performing these tasks.
E) allocating funds to a promotion based on expected profits generated from it.
233) A budgeting method that allocates funds to a promotion as a percentage of past or
anticipated sales, in terms of either dollars or units sold, is referred to as ________ budgeting.
A) percentage of sales
B) competitive parity
C) all-you-can-afford
D) objective and task
E) linear forecast
234) In which sales budgeting approach is the amount of money spent based on past or
anticipated sales?
A) competitive parity
B) all-you-can-afford
C) objective and task
D) percentage of sales
E) relative scale
235) A major fallacy of ________ budgeting is that sales cause promotion. Using this method, a
company may reduce the amount it spends on promotion if sales declined the previous period
when it may actually need to spend more.
A) competitive parity
B) all-you-can-afford
C) objective and task
D) linear forecast
E) percentage of sales
236) The owner of a cosmetics start-up told his employees, “We had a good year, and next year
looks to be even better. I’m going to raise this year’s promotion budget by 4.5 percent compared
to last year’s. We had strong growth in sales of close to 10 percent this year so I think we can do
more advertising.” This company is most likely using ________ budgeting.
A) percentage of sales
B) competitive parity
C) all-you-can-afford
D) objective and task
E) linear forecast
237) The promotion-to-sales ratio is a measure used in the ________ budgeting approach.
A) competitive parity
B) all-you-can-afford
C) percentage of sales
D) objective and task
E) linear forecast
238) Managers often use the promotion-to-sales ratio on their marketing dashboards to assess
how effective the integrated marketing communications program expenditures were at generating
A) sales.
B) customer satisfaction.
C) profits.
D) promotional sustainability.
E) CPM.
239) The promotion-to-sales ratio can be used by managers to make year-to-year comparisons of
their programs or to compare with
A) calculated break-even points.
B) estimated return on investments.
C) promotion-to-expense ratios.
D) competitors or industry averages.
E) advertising-to-sales promotion ratios.
240) A common way to assess the effectiveness of all promotion expenditures during the past
year is to calculate
A) a break-even point.
B) a promotion-to-sales ratio.
C) ROI.
D) a promotion-to-expenses ratio.
E) an advertising-to-sales promotion ratio.
241) The formula to calculate a promotion-to-sales ratio is: Total promotion expenditures
divided by
A) total marketing costs.
B) unit sales price.
C) average revenue.
D) net sales.
E) total sales.
242) A marketing manager at an auto company computed its promotion-to-sales ratio, that of the
major competitor, and the auto industry itself. She found that the company’s ratio was 2.8
percent, the competitor’s ratio was 4.5 percent, and the auto industry average was 6.7 percent.
She then realized
A) she was spending too little on promotional efforts.
B) she needed to explain these numbers to her boss, especially in relation to the industry.
C) the competitor shortly would be taking market share from the company.
D) she spent her promotional dollars effectively.
E) overall the industry was wasting money on ineffective sales promotions such as cash-back
offers.
243) Competitive parity budgeting refers to
A) matching a competitor’s absolute level of spending or the proportion per point of market
share.
B) allocating funds to a promotion as a percentage of past or anticipated sales, in terms of either
dollars or units sold.
C) allocating funds to a promotion only after all other budget items are covered.
D) determining a firm’s promotion objectives, outlining the tasks to accomplish these objectives,
and determining the advertising cost of performing these tasks.
E) allocating funds to a promotion based on expected profits generated from it.
244) Allocating funds to promotion by matching the competitor’s absolute level of spending or
the proportion per point of market share is referred to as ________ budgeting.
A) percentage of sales
B) competitive parity
C) all-you-can-afford
D) objective and task
E) linear forecast
245) Another name for competitive parity budgeting is ________ budgeting.
A) linear forecast
B) all-you-can-afford
C) share of market
D) comparative
E) matched media
246) Allocation of funds to promotion only after all other budget items are covered is referred to
as
A) percentage of sales budgeting.
B) all-you-can-afford budgeting.
C) competitive parity budgeting.
D) objective and task budgeting.
E) linear forecast budgeting.
247) All-you-can-afford-budgeting refers to
A) allocating funds to a promotion as a percentage of past or anticipated sales, in terms of either
dollars or units sold.
B) matching a competitor’s absolute level of spending or the proportion per point of market
share.
C) determining a firm’s promotion objectives, outlining the tasks to accomplish these objectives,
and determining the advertising cost of performing these tasks.
D) allocating funds to a promotion only after all other budget items are covered.
E) allocating funds to a promotion based on expected profits generated from it.
248) The owner of a nail shop that operates in a local strip mall told her daughter, “Well, after
budgeting for all of our expenses for next year, we still have about $7,500 remaining for
emergencies. Let’s budget 20 percent of that amount for advertising.” What budgeting technique
is the retailer most likely using?
A) all-you-can-afford budgeting
B) percentage of sales budgeting
C) competitive parity budgeting
D) objective and task budgeting
E) linear forecast budgeting
249) Allocating funds to promotion whereby the company determines its promotion objectives,
outlines the tasks to accomplish these objectives, and determines the promotion cost of
performing these tasks is referred to as
A) percentage of sales budgeting.
B) competitive parity budgeting.
C) all-you-can-afford budgeting.
D) linear forecast budgeting.
E) objective and task budgeting.
250) The best approach to budgeting is objective and task budgeting, whereby the company
determines its promotion objectives, outlines the tasks to accomplish these objectives, and
A) asks the ad agency for an estimate.
B) asks the media to propose a program.
C) determines the promotion cost of performing these tasks.
D) determines what spending level top management will allow for the proposed program.
E) surveys customers to determine what spending levels they think are appropriate.
251) Which of the following is the best approach to promotion budgeting?
A) objective and task budgeting
B) percentage of sales budgeting
C) competitive parity budgeting
D) all-you-can-afford budgeting
E) linear forecast budgeting
252) The difficulty with the objective and task approach to promotional budgeting is the
judgment required to
A) accurately estimate costs of tasks.
B) identify appropriate promotion objectives.
C) accurately determine previous year expenditures and sales.
D) perform the promotion tasks as intended.
E) accurately estimate what tasks will accomplish each promotion objective.
253) The Olympics have become a very visible example of a comprehensive integrated
communication program. For organizers, primary importance is placed on
A) advertising and personal selling.
B) personal selling and public relations.
C) public relations and publicity.
D) sales promotion and direct marketing.
E) direct marketing and personal selling.
254) The design of the promotion will play a primary role in determining the message that is
communicated to the audience. Successful designs are often the result of
A) accurately estimating costs of tasks.
B) identifying appropriate objectives.
C) accurately estimating what task will accomplish each objective.
D) obtaining insights regarding consumers’ interests and behavior.
E) obtaining insights regarding task performance.
255) Once the design of each of the promotional program elements is complete, it is important to
determine the most effective timing of their use. The ________ describes the order in which each
promotional tool is introduced and the frequency of its use during a campaign.
A) perceptual map
B) efficiency matrix
C) sensitivity analysis
D) promotion to sales ratio
E) promotion schedule
256) In terms of a promotional schedule, businesses such as ski resorts, airlines, and professional
sports teams are likely to reduce their promotional activity
A) when competitors leave the market.
B) during the off-season.
C) only when sales are down more than 10-20 percent.
D) if they find cheaper social media options to be effective.
E) when the target audience becomes younger.
257) Carrying out the promotion program can be expensive and time consuming. One researcher
estimates that “an organization with sales between $200 million and $500 million will need
________ years” to successfully implement an IMC program.
A) two
B) three
C) four
D) five
E) 10
258) According to the text, ________ recently won Advertising Age magazine’s coveted Media
Agency of the Year award.
A) 72 and Sunny
B) PHD
C) Fallon
D) LatinWorks
E) Disney
259) An important factor in developing successful IMC programs is to create a process that
facilitates their design and use. A tool used to evaluate a company’s current process is the IMC
A) audit.
B) sensitivity analysis.
C) what-if analysis.
D) perceptual map.
E) pretest.
260) Which of the following statements about executing and evaluating the promotion program
is most accurate?
A) Although there are five elements in the promotional mix, the only element that really benefits
from an IMC audit is advertising.
B) Most IMC programs have no difficulty creating a pretest, but posttests are much more
difficult to construct since a number of unknown elements must be measured.
C) In addition to ensuring that traditional forms of communication are integrated, companies
must be able to monitor consumer content, respond to inconsistent messages, and answer
questions from individual customers.
D) The ideal IMC program does not need any evaluation if it is executed according to plan.
E) The most effective IMC audits are external. Internal audits tend to bias the results in the favor
of the marketing staff’s expectations.
261) All of the following are forms of direct marketing except which?
A) catalogs
B) in-store free samples
C) telemarketing
D) television home shopping
E) direct mail
262) Which of the following forms of direct marketing has the lowest business expenditures?
A) direct mail
B) e-mail
C) telemarketing
D) paid search
E) advertising
263) Which of the following forms of direct marketing has the highest business expenditures?
A) e-mail
B) direct mail
C) paid search
D) telemarketing
E) advertising
264) Commonly used forms of direct marketing like direct mail and e-mail have response rates
between
A) 1 percent and 11 percent
B) 12 percent and 26 percent
C) 28 percent and 40 percent
D) 41 percent and 48 percent
E) 49 percent and 60 percent
265) Which of the following forms of direct marketing has the highest response rate?
A) direct mail
B) e-mail
C) paid search
D) telemarketing
E) advertising
266) Sales from which of the following direct marketing tools is growing the fastest at 33
percent?
A) mobile direct marketing
B) social network direct marketing
C) telemarketing
D) e-mail marketing
E) direct mail marketing
267) All of the following forms of direct marketing are used by consumers to purchase products
except which?
A) social media posts
B) rebates
C) online
D) mobile offers
E) mail
268) Customers report many benefits of direct marketing, including which of these?
A) There is more privacy than in-store shopping.
B) There are fewer product returns.
C) Instant gratification is higher.
D) There are a greater number of additional incentives from sellers to retain customer loyalty.
E) Products are generally bundled with other products to offer buyers greater value.