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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
(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.
How would an advertiser hope to benefit from sponsoring the WaveRunner?
a. by avoiding the ego-driven decision making often associated with traditional
advertising
b. by strategically placing its product at a sporting event to reach as wide an audience as
possible
c. by taking part in the most cost-efficient form of promotion and advertising
d. by transferring consumers' positive feelings about yacht racing to the product
You are owner of a 15-person advertising agency in a major market. You've been
invited to pitch the Girl Powerz account, the largest female-only fitness center chain in
the region, one that could quickly grow into a national franchise. If you land the
account, it will be your biggest revenue producer by far. You'll be able to staff up, move
to a nicer space, and buy some decent office furniture. It also will put you, personally,
in a position to make a ton of money by selling out to a larger agency some day.
Considering the importance of the pitch to Girl Powerz execs, you have decided to
spearhead the pitch yourself.You announce that you will write the part of the ad plan
that contains the crucial information that Girl Powerz execs need to know, even if they
remember nothing else. This means you will write the ____ section.
a. situation analysis
b. execution
c. strategy
d. executive summary
Peer-to-peer influencer programs have a different tone than those involving
professionals in that they focus more on
a. superior product benefits and features.
b. sharing advice or expertise with another consumer.
c. evidence or data to back up product claims.
d. something fun or provocative involving a brand.
Until recently, what was the traditional amount of commission paid to advertising
agencies by the media purchased?
a. 5 percent
b. 10 percent
c. 15 percent
d. 25 percent
A media buyer is glancing through the latest edition of the industry trade publication,
Advertising Age, and notices an ad targeted at media buyers. The ad encourages the
purchase of space in a fast-growing magazine that reaches 12- to 18-year-olds girls. It
invites media buyers to contact the sales department at the teen-oriented magazine for
more information. She considers this, as she has a cosmetics manufacturer as a client
who may benefit from this type of ad placement.
The cosmetics client is still concerned about paying a lot of money for an ad in a fairly
new magazine that hasn't yet proven its popularity. The best way for the client to make
sure that the advertisement will meet its minimum exposure goals is to ask about the
magazine's
a. newsstand circulation.
b. subscription base.
c. pass-along readership.
d. guaranteed circulation.
State Farm's "Like a Good Neighbor" ad campaign is an example of consistent
positioning over time.
The essence of agency-client teamwork is to answer the question concerning what
brand should be promoted within the market.
The old physiological approaches to measuring physical responses during ad viewing
have been replaced by PT or MRI scans of brain activity, and these are commonly used
in copy research today.
There is evidence that as the media environment gets more cluttered, feeling-based ads
may actually do better than thought-based ads.
Online brand communities behave much like communities in the traditional sense,
complete with their own cultures, rituals, and traditions.
Advertising is only one area of the marketing mix, and it represents only one of many
different IBP tools used in the marketing mix.
Since almost 90 percent of all U.S. households now own a television, the total number
of television households is just a bit less than the total number of American households,
about 11 million.
