BUSMT 371 Midterm | Course Paper

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Following the announcement that the world’s largest e-tailer, Amazon.com, made a

profit for the first time since it started business in the early 1990s, the company saw

more than 90 percent of its market value disappear as part of the dot-com collapse. It is

questionable whether or not Amazon figured out a profitable business model after

changing its tune several times over those early years. Then it began circling back

somewhat to an earlier focus on becoming the Walmart of the Internet. It said it wanted

to sell huge volumes of merchandise cheaply, and in the process eke out enough of a

profit to satisfy Wall Street.Although investors had to wait some time for the e-tailer to

work out the kinks, and it’s uncertain how much longer they’ll remain patient, Amazon’s

mainstay retail business may see further improvements as it grows. As we all have now

witnessed, unlike brick-and-mortar retailers who must build new stores, stock them, and

hire people to staff them, Amazon has been able to open new stores with minimal

additional cost. Some years ago, it reported turning over its inventory 17 times a

year-close to double that of traditional retailers at the time. And on average, it reported

having gotten paid 32 days before it must pay its suppliers-in essence, providing

millions of dollars in cash flow.Information updated for 2011, based on the following

initial articles:

(David Shook, “Can Amazon Turn Baby Steps Into Strides?,” Businessweek Online,

February 13, 2002.)

(Rob Hof, “Why Amazon Could Keep Flowing,” Businessweek Online, January 5,

2005.)

Amazon.com began by facing a myriad of problems since its inception, with perhaps

the biggest obstacle being the demise of hundreds of dot-com companies in the late

1990s and early 2000. Those dot-com companies that did survive initially had a difficult

time making a profit, and over time a few began to face new competition. The issue as

to who will supply online consumers has been continually evolving and changing since

then. This type of information would most likely be noted in the ____ section of an ad

plan.

a. historical context

b. industry analysis

c. market analysis

d. competitor analysis

(Scenario 16-1) MakeWaves is a promotional company with a website that offers the

opportunity to sponsor a yacht in Grand Prix yacht racing. Commercial sponsors of the

WaveRunner yacht can buy space for logos and graphics on the WaveRunner‘s sails,

hulls, crew member uniforms, and trailer. For enough sponsorship money, the

WaveRunner will even change its name to better fit the sponsor. The WaveRunner is

scheduled to compete in five Grand Prix yacht-racing events every year. MakeWaves

claims on its website that sponsoring the WaveRunner in a race could result in millions

of impressions in sailing magazines and newspapers as well as on broadcast media, and

offers specific calculations to those who inquire.

MakeWaves is pitching a very specific sponsorship offer with its own benefits. But

overall, the category of event sponsorship has certain advantages. One of the main

advantages is that it

a. replaces expensive advertising as the main brand-building tool.

b. targets certain groups of consumers who already purchase the brand.

c. offers personal contact with consumers and publicity during and after the event.

d. embeds the brand in a very nondescript and subtle way.

Scenario 17-3

As the number of firms utilizing direct marketing continues to grow, so too does the

number of consumers opposed to the methods often described as “intrusive.” To combat

the growing number of opposed consumers, marketers need to find creative new ways

to optimize their direct marketing campaigns. One outlet firms are beginning to

experiment with is social media. Executives understand that many consumers view a

company’s Facebook page more often than the company’s home page, so they’ve grown

to realize that setting up some form of an email opt-in on social media sites is a great

way to build marketing databases. In addition to opt-in sections, social media allows

businesses to interact with consumers, which may make them less inclined to respond

negatively to a company’s direct marketing efforts. By utilizing social media more often

in the future, a number U.S. companies hope to build stronger and more useful

marketing databases.

Which of the following is often referred to as the most controversial of the various

direct marketing methods?

a. social media interaction

b. direct mail

c. bulk email

d. repetitive telemarketing

After a series of public relations setbacks, Japanese automaker Toyota unveiled a new

company slogan in 2010. The slogan read, “Drive a Toyota. You’ll never stop.” The

company hopes the new slogan can once again instill confidence into a number of

consumers who grew weary of the brand after a number of massive recalls in recent

years. The company chose to go with the slogan after turning down a number of others,

including, “Toyota Puts the Pedal to the Metal. And keeps it there,” and “Toyota. The

Last Car You’ll Ever Drive.” The new slogan will be featured in all of the company’s

future advertisements.(Andy Borowitz, “Toyota Unveils New Slogan: €Drive a Toyota.

You’ll Never Stop’.” The Huffington Post, February 6, 2010.)

To create ads featuring the new company slogan, Toyota assembles a creative team of

individuals who will focus solely on designing the new advertisements. Toyota realizes

that it will need to have a strong Internet and social media presence. In order to

effectively utilize these outlets, Toyota should consider hiring a(n)

a. production coordinator.

b. media planner.

c. advertising guru.

d. copywriter.

It has been known for a long time that jingles and slogans are linked to a concept called

____, that is, people find them catchy and easy to repeat.

a. rehearsal

b. appreciation

c. comparison

d. visualization

Which of the following is not a form of P-O-P advertising?

a. billboards at the entrances of all parking lots

b. computer kiosks at all stores to dispense recipes and product information

c. lighted outdoor signs at all stores to promote various brands

d. ads on all shopping carts

Market segmentation is the process of

a. creating a perceived difference between the brand of one firm and the brand of a

competitor.

b. adding a level of value and meaning to a product’s identity.

c. breaking down a large heterogeneous market into homogeneous submarkets.

d. identifying a competitive niche for a brand.

________, established by the Better Business Bureau, evaluates ads directed at children

based on guidelines that encourage sensitivity to their level of sophistication and

knowledge, as well as emphasis on positive social traits such as friendship and

kindness.

a. The Family Research Council

b. The Children’s Food and Beverage Advertising Initiative

c. The Children’s Advertising Review Unit

d. Action for Children’s Television

Scenario 15-2

The Sounds Good recording company is getting ready to release the first compact disc

from its newest band, Planet Moon. Sounds Good’s last three releases have been dismal

failures, and the struggling company needs a quick influx of cash. The owners decide to

use sales promotions to move the Planet Moon disc through record stores and into

customers’ hands.

Sounds Good has placed a small catalog inside each compact disc. The catalog features

a variety of Planet Moon items that can be ordered-the band’s music video as well as

T-shirts, ball caps, and travel mugs. These items are considered self-liquidating

premiums because the consumer

a. does not directly receive them within the packaging of a product.

b. is unknowingly helping to liquidate unwanted product inventory.

c. has the chance to buy them only by purchasing the CD.

d. pays most of the cost for them.

Advertisers have a wide choice of objectives and methods when creating an ad for a

product, no matter what the product category is. For example, both Taylor and Yamaha

sell guitars. Both have created ads that have been recognized by the advertising industry

as outstanding creative efforts. However, they have chosen different ways to use

magazine advertising to sell guitars.A representative advertisement for Taylor features a

photograph of a beautiful, lush, fog-shrouded green forest. The headline reads, “If a tree

falls in the forest and you’re not there to hear it, does it make a sound? Yes, it just might

take 7 or 8 years.” The copy is three sentences long and talks about the time and

attention that Taylor takes in making quality guitars. Only the top couple inches of a

guitar featuring the Taylor logo is shown. While the ad could be classified as

exemplifying a number of approaches to meeting message objectives, it most closely

fits the description of the USP method by linking a key attribute (quality) to the brand

name (Taylor).The main visual in an ad for the Yamaha Pacifica is a bold shot of the

guitar. The headline reads, “To survive, you need four things: Food. Sex. Shelter.

Guitars. Make that two things.” This ad also features characteristics of several

approaches to meeting message objectives. However, the headline seems to define it as

using the humor method to persuade consumers to prefer the brand.Unique Selling

Proposition ads, such as Taylor’s, try to

a. link attributes to a brand, either explicitly or implicitly.

b. place brands in socially desirable environments.

c. use comparisons to other brands to create an image.

d. engage the consumer on a high cognitive level.

American Express is dissatisfied with the degree of penetration of its Gold Rewards

Plus card in the U.S. market. Marketing managers at American Express feel that the

firm needs to increase advertising to small entrepreneurial businesses to encourage

more acceptance of the card for use in purchasing office supplies and durable goods like

computers and office furniture. American Express feels that to accomplish the goal of

increased penetration in this sector, the budget should be based on communications

objectives aimed at certain target markets.The marketers are keenly aware that many

budgeting methods fail to address the objectives originally set and relate these to the

dollars to be spent. Which budgeting technique does American Express ultimately most

likely decide to use, based on this awareness and the information in this scenario?

a. share-of-market approach

b. objective-and-task approach

c. percentage-of-sales approach

d. share-of-voice approach

Taylor, Frenz, and Hynes have recently published a short booklet entitled Media

Choices: Efficiency and Competitive Assessment. This is a tool that advertising agencies

and media planners can offer to clients so they can understand how to better determine

their media mix. Included below are several short excerpts from the booklet. Please

complete the missing part of each excerpt, based on your study of the chapter.

“Among advertising agencies, the client’s agency of record is the one chosen by the

client specifically to

a. gather all data necessary to measure media exposure.”

b. correlate creative efforts with media budgets.”

c. purchase all time and space.”

d. keep records of all ongoing research efforts.”

A national radio broadcasters association hosts an annual convention that attracts station

owners and program managers as well as ad agencies and media planners. As a media

planner, you take part in forums on the current status of traditional radio, the

competition between AM and FM formats, the growth of satellite and Internet radio,

and the rise of new technologies. During one forum, a professor of broadcasting sparks

discussion by posing a number of questions based on real-life situations that he has

encountered over the years.

A nationwide fast-food chain is considering next year’s media plan and is reviewing the

pros and cons of various media options. Radio advertising has its disadvantages, and

many are being addressed at this convention. Which of the following represents one of

those disadvantages?

a. the short closing periods for ad placement

b. the absolute and contact cost

c. the reach and frequency

d. the chaotic buying procedures

What is one of the main challenges of the copywriter early in the campaign process?

a. combining texts and visuals to create a unified whole

b. writing lively and colorful words about products that are often dull and lifeless

c. extracting meaning from massive amounts of analytical data, product technology

information, and market research

d. creating the mood, tone, or humorous angle that gives the product real value