40) Which of the following is typically the last step in developing a retail communication
program?
A) Implement and evaluate programs.
B) Establish objectives.
C) Determine a budget.
D) Allocate the budget.
E) Develop social media campaigns.
41) When developing a retail communication program, sales goals are set when the
A) objectives are established.
B) budget is determined.
C) budget is allocated.
D) program is implemented and evaluated.
E) program is proposed.
42) When developing a retail communication program, communication objectives are set when the
A) program is implemented and evaluated.
B) budget is determined.
C) objectives are established.
D) budget is allocated.
E) program is finished.
43) Which of the following is a well-stated communication program objective?
A) Increase sales over 12 months.
B) Increase awareness in our target market.
C) Reduce customer complaints.
D) Increase brand awareness by 15% in the next 6 months.
E) Communicate our customer service commitment to our customers.
44) A(n) ________ is a promotional program undertaken by a vendor and a retailer working
together.
A) cooperative program
B) customer relationship management program
C) employee feedback management program
D) employee assistance program
E) work-life balance program
45) In a national print advertisement, Levi’s was showcasing its new line of denim jackets. At the
bottom of the ad, the Macy’s logo was found as a place where the new jackets could be purchased
by customers. This is an example of
A) co-op advertising.
B) partnering promotions.
C) a double truck.
D) a double pocket promotion.
E) a spot promotion.
46) A sporting goods retailer anticipates running a print advertisement campaign during the
beginning of the year in support of customers’ anticipated New Year’s resolutions to get in physical
shape. The sporting goods retailer asks its key vendors to partner with it in covering the expenses
of the ad campaign. Vendors agree to support the ________ as long as they are certain that their
products will be featured in the advertisements.
A) co-op advertising
B) partnering promotions
C) double truck
D) double pocket promotion
E) spot promotion
47) ________ is based on the economic principle that firms should increase communication
expenditures as long as each additional dollar spent generates more than a dollar of additional
contribution.
A) Objective-and-task analysis
B) Rule-of-thumb analysis
C) Marginal analysis
D) Affordable budgeting analysis
E) Percentage-of-sales analysis
48) When developing a retail communication program, a marginal analysis takes place when
A) the budget is allocated.
B) the program is implemented and evaluated.
C) the objective is determined.
D) the budget is determined.
E) the budget is proposed.
49) In most cases, which of the following is a reason why it is very hard to perform a marginal
analysis?
A) It causes a brain drain within the organization.
B) It is a very expensive and time-consuming process.
C) It is hard to acquire accurate sales data from within the organization.
D) It is hard to acquire accurate information on communication expenditure.
E) Managers don’t know the relationship between communication and sales.
50) The ________ determines the budget required to undertake specific tasks to accomplish
communication objectives.
A) competitive parity method
B) percentage-of-sales method
C) affordable budgeting method
D) rule-of-thumb method
E) objective-and-task method
51) Luke was interested in developing a communication budget for the holistic vitamin shop he
will be opening in 30 days. He is planning a few promotional sales and will advertise through local
newspapers. With the available information, what method would be best for Luke to pursue to
develop his communication program?
A) Affordable method
B) Objective-and-task method
C) Percentage-of-sales method
D) Competitive-parity method
E) Developmental method
52) The ________ uses past sales and communication activities to determine the present
communication budget.
A) percentage-of-sales method
B) rule-of-thumb method
C) gross margin percent
D) percentage-of-profit
E) break even method
53) When retailers use the ________ method, it is easiest to cut communication program expenses
if retail sales fail to meet the sales plan rather than increasing the communication expenses to try
and generate additional sales.
A) affordable budgeting
B) objective-and-task
C) percentage-of-sales
D) competitive parity
E) marginal analysis
54) The ________ method uses the difference between the forecasted sales and the expenses plus
the desired profit for the communication budget.
A) affordable budgeting
B) objective-and-task
C) percentage-of-sales
D) competitive parity
E) marginal analysis
55) The ________ method assumes that communication expenses are just a cost of business and do
not promote sales and profit.
A) affordable budgeting
B) objective-and-task
C) percentage-of-sales
D) competitive parity
E) marginal analysis
56) Retailers use ________ to determine the communication budget by forecasting sales during the
budget period and then applying a predetermined percentage to set the budget.
A) percentage-of-profit
B) competitive parity method
C) marginal analysis method
D) percentage-of-sales method
E) affordable budgeting method
57) For a multi-chain’s new store location, the most inappropriate communication program budget
method would be
A) affordable budgeting.
B) objective-and-task.
C) percentage-of-sales.
D) competitive parity.
E) marginal analysis.
58) Which method for determining a communication method helps to ensure that the retailer will
not spend beyond its means?
A) Break-even analysis method
B) Objective-and-task method
C) Percentage-of-sales method
D) Competitive parity method
E) Marginal analysis method
59) Under the competitive parity method, the communication budget is set so that
A) sales forecasts will not affect the budget.
B) it resembles a fixed percentage of sales.
C) surplus cannot be allocated to other categories.
D) it is equal to the communication expenditure of competitor(s).
E) retailers can exploit opportunities they confront in the market.
60) Similar to the other rule-of-thumb methods, the ________ doesn’t allow retailers to exploit the
unique opportunities or problems they confront in the market.
A) percentage-of-sales method
B) competitive parity method
C) objective-and-task method
D) marginal analysis method
E) affordable budgeting method
61) The owner of a jewelry retail chain estimated advertising at $4,000 for the year and estimated
the downtown store location’s market share at 35 percent. By using the competitive parity method,
what is the jewelry downtown store location’s communication budget?
A) $6,600
B) $5,400
C) $600
D) $2,600
E) $1,400
62) The retailer allocates the budget to areas that will yield the greatest return. This approach for
allocating a budget is referred to as the
A) high-margin principle.
B) high-assay principle.
C) contribution principle.
D) attraction principle.
E) break-even principle.
63) In the late 90s, Sears spent much of its communication budget advertising the “Softer Side of
Sears” campaign since it felt the customer knew very little of Sears’ apparel assortments and thus
there would be a substantial return from advertising apparel versus advertising the more known
appliances. What principle for budget allocation was Sears potentially using?
A) Percentage of sales method
B) Rule of thumb method
C) Asset principle
D) High-assay principle
E) Affordable method
64) In new media, ________ refer to the number of times an ad appears in front of the user.
A) impressions
B) view rates
C) air rates
D) true views
E) expressions
65) Which of the following is the formula for calculating click-through rate?
A) Number of impressions + The number of times a user clicks on ad
B) The number of times a user clicks on an ad – Number of impressions
C) The number of times a user clicks on ad * Number of impressions
D) The number of times a user clicks on an ad/Number of impressions
E) Number of impressions – The number of times a user clicks on ad
66) A sponsored link was delivered 100 times, and 10 people clicked on it. Calculate the
click-through rate.
A) 125
B) -115
C) 600
D) 115
E) 10
67) Which of the following is the formula to determine the return on investment for an
advertisement?
A) (Net sales + Advertising cost)/Advertising cost
B) (Net sales – Advertising cost)/Advertising cost
C) Advertising cost/(Net sales + Advertising cost)
D) Advertising cost/(Net sales – Advertising cost)
E) (Advertising cost – Net sales)/Advertising cost
68) Calculate the return on investment for an advertisement from the given data. Net sales is
$1,000, and advertising cost is $50.
A) 18
B) 19
C) 21
D) 23
E) 25
69) Why is it necessary for retailers to develop and implement an integrated communication
program?
70) List the four steps involved in developing a retail communication program.
71) Why is marginal analysis the most economically correct method for setting communication
budgets? Why is it still a challenge for retailers to use this method?
72) What are the disadvantages associated with using the percentage-of-sales method for
establishing a retail communication budget?
73) What is the major disadvantage associated with using the competitive parity method of
determining a retail communication budget?
74) Why is it problematic for retailers to spend about the same on communication programs for
each geographic region?
75) Explain how sentiment analysis can be used by retailers and brands.