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118) Describe the six buyer-readiness stages along with the marketing strategies used at each
stage.
119) While using the ________ method for setting an advertising budget, a company starts with
total revenues, deducts operating expenses and capital outlays, and then devotes some portion
of the remaining funds to advertising.
A) integrated
B) moving-average
C) competitive-parity
D) percentage-of-sales
E) affordable
120) Which of the following statements is true regarding the affordable method for setting a
promotion budget?
A) It is mostly used by large businesses.
B) It completely ignores the effects of promotion on sales.
C) It tends to place promotion first among spending priorities.
D) It leads to a certain annual promotion budget.
E) It almost always results in overspending.
121) Though the ________ method of setting an advertising budget is simple to use and helps
management think about the relationships among promotion spending, selling price, and profit
per unit, it wrongly views sales as the cause of promotion rather than the result.
A) percentage-of-sales
B) integrated
C) competitive-parity
D) objective-and-task
E) regression
122) Which of the following methods is used by companies to set their advertising budgets
based on the industry average?
A) percentage-of-sales method
B) affordable method
C) competitive-parity method
D) objective-and-task method
E) regression method
123) Sam, the owner of a small company, learned that a competitor was planning to spend
$150,000 on promotion in the next financial year. As soon as he learned this, Sam called his
finance manager and said, "I want to spend $150,000 on promotion next year." In this case,
which method of promotional budgeting does Sam use?
A) the objective-and-task method
B) the competitive-parity method
C) the percentage-of-sales method
D) the affordable method
E) the pull-push method
124) Which of the following statements is most likely true regarding the competitive-parity
method?
A) This method involves starting with total revenues, deducting operating expenses and capital
outlays, and then devoting some portion of the remaining funds to advertising.
B) It is based on the availability of funds rather than on opportunities.
C) It wrongly views sales as the cause of promotion rather than as the result.
D) In this method, promotion budgets are set to match competitors' outlays.
E) This method involves setting the promotion budget at a certain percentage of current or
forecasted sales.
125) Which of the following is the most logical budget-setting method?
A) percentage-of-sales method
B) affordable method
C) competitive-parity method
D) objective-and-task method
E) push method
126) Which budgeting method entails defining specific promotion goals, determining the
necessary tasks, and estimating the costs to determine a promotion budget?
A) percentage-of-sales method
B) objective-and-task method
C) affordable method
D) exponential task method
E) competitive-parity method
127) Which of the following statements is most likely true regarding the objective-and-task
method of budget setting?
A) It forces management to spell out its assumptions about the relationship between the money
spent and promotion results.
B) It is the simplest and least time consuming method to use.
C) It is the least logical budget-setting method.
D) It involves setting the promotion budget to match competitors' outlays.
E) It wrongly views sales as the cause of promotion rather than as the result.
128) Using a(n) ________ strategy, the producer directs its marketing activities toward final
consumers to induce them to buy the product.
A) pull
B) blitz
C) push
D) buzz
E) pulse
129) Which of the following is most likely a shortcoming of advertising?
A) It is the most expensive promotion tool.
B) It cannot reach masses of geographically dispersed buyers.
C) It is impersonal and lacks the direct persuasiveness of company salespeople.
D) It cannot trigger quick sales.
E) It cannot be used to build up a long-term image for a product.
130) Which of the following is a strength of advertising?
A) It is the most inexpensive promotion tool.
B) It reaches masses of geographically dispersed buyers at low cost per exposure
C) It is impersonal and lacks the direct persuasiveness of company salespeople.
D) It cannot trigger quick sales.
E) It cannot be used to build up a long-term image for a product.
131) In most cases, what is the most expensive promotion tool?
A) advertising
B) personal selling
C) mass media
D) public relations
E) publicity
132) Which of the following promotional tools is the most effective in building up buyers'
preferences, convictions, and actions?
A) mass-market advertising
B) sales promotion
C) segmented advertising
D) personal selling
E) public relations
133) ________ consists of strong short-term incentives that invite and reward quick responses
from customers.
A) Public relations
B) Personal selling
C) Advertising
D) Sales promotion
E) Direct marketing
134) Suppose Amazon.com has offered you free shipping on your next purchase of more than
$35. This offer is an example of ________.
A) sales promotion
B) personal selling
C) a public relations strategy
D) horizontal diversification
E) a pull strategy
135) ________ is very believable because news stories, features, sponsorships, and events seem
more real and believable to readers than ads do.
A) Differentiated marketing
B) Public relations
C) Direct marketing
D) Sales promotion
E) Personal selling
136) A newspaper article announced that Connect Wireless, the sixth-largest wireless carrier in
a country, was changing its name to M-Mobile and that to begin the makeover process it had
replaced spokesperson Robert Garmon with Catherine Naylor. Which of the following elements
of a promotion mix is represented in this example?
A) sales promotion
B) advertising
C) public relations
D) personal selling
E) direct marketing
137) Which promotional tool is the most immediate, customized, and interactive?
A) segmented advertising
B) sales promotion
C) direct marketing
D) horizontal diversification
E) public relations
138) Under which promotional mix strategy does the producer direct its marketing activities
toward channel members to induce them to carry the product and promote it to final
consumers?
A) pull strategy
B) blitz strategy
C) push strategy
D) buzz strategy
E) pulse strategy
139) The manufacturer of Crest toothpaste provides free samples of its toothpaste to dentists
and encourages them to distribute these samples to their patients and to inform the patients
about advantages of using Crest. The manufacturer of Crest toothpaste is using ________.
A) sales promotion
B) direct marketing
C) a push strategy
D) a pull strategy
E) a vertical diversification strategy
140) Glasis is a type of paint made specifically for use on cars. An ad in Motor Trend magazine
advising consumers to request their auto body shops to use Glasis paint is an example of how a
company uses ________.
A) word-of-mouth influence
B) public relations
C) buzz marketing
D) a push strategy
E) a pull strategy
141) Business-to-consumer companies are more likely to emphasize a ________ promotion
strategy, while business-to-business companies are more likely to emphasize a ________
promotion strategy.
A) pull; push
B) push; pull
C) pulse; pull
D) blitz; pull
E) push; blitz
142) John Deere does very little promoting of its lawn mowers and garden tractors to final
consumers. Instead, John Deere's sales force works with Lowe's, Home Depot, independent
dealers, and other channel members, who in turn sell John Deere products to final consumers.
According to this information, which of the following promotion mix strategies is being used
by John Deere?
A) public relations strategy
B) direct marketing strategy
C) push strategy
D) blitz strategy
E) pull strategy
143) Which of the following would be classified as bait-and-switch advertising?
A) advertising a cheaper brand but making only a more expensive one available to customers
B) advertising the advantages of a product by comparing it to its competitors
C) providing free samples of a product
D) providing discount coupons with a product
E) favoring certain customers over others through trade promotions
144) The FTC has adopted a three-day cooling-off rule to give special protection to ________.
A) customers who purchased because of deceptive advertising
B) customers who purchased because of bait-and-switch tactics
C) customers who were not seeking a product
D) resellers who do not receive proportionately equal treatment from manufacturers
E) resellers who are not covered by the Robinson-Patnam Act
145) Of the following actions, which is permitted in personal selling activities?
A) obtain or use trade secrets
B) criticize competitors by using inaccurate information
C) bribes to those who can influence a sale
D) offer incentives such as discounts based on size of an order
E) stretching the truth when describing advantages of a product
Refer to the scenario below to answer the following question(s).
John Mayes opened Sparkle Janitorial in 2005. John began his business by acquiring two
contracts for office cleaning services from two local manufacturing facilities. For two years,
John and his wife, Barb, performed the cleaning services alone. After acquiring three additional
cleaning contracts in 2007, John hired two employees. "Up to that point, we had room to grow
but we really had no advertising plan," John stated. "We were relying mostly on word-of-
mouth."
By 2010, Barb hired another two full-time employees to begin Sparkle's new endeavor: carpet
cleaning in homes and offices. "Competition was getting tough for both of our services at that
point," Barb added. "We ran a local radio spot three times each week. Then we had an
advertiser print coupons on placemats. That gave us a little more exposure."
John and Barb Mayes admit that they did not realize the value of a sound promotional plan
earlier. "We wish we would have put together something catchy with a jingle long before now,"
they said.
146) When starting their business, John and Barb would most likely have benefitted from
understanding ________.
A) social media
B) buzz marketing
C) public relations campaigns
D) network television advertising
E) integrated marketing communications
147) The affordable method of setting advertising budgets takes into consideration the effects
of promotion on sales.
148) The affordable method of setting advertising budgets more frequently results in
overspending, rather than in underspending.
149) The percentage-of-sales method wrongly views sales as the cause of promotion rather than
as the result.
150) The percentage-of-sales budget is based on the availability of funds rather than on
opportunities.
151) The affordable method involves setting promotion budgets to match competitors' outlays.
152) Large-scale advertising conveys a positive message about the seller's size, popularity, and
success.
153) If the pull strategy is effective, then consumers will demand the product from channel
members, who will in turn demand it from producers.
154) Using a push strategy, the producer directs its marketing activities (primarily advertising
and consumer promotion) toward final consumers to induce them to buy the product.
155) Integrating the promotion mix starts with suppliers.
156) Because personal selling involves developing relationships, it is acceptable for salespeople
to stretch claims they make about a product's advantages.
157) Discuss sales promotion.
158) Describe the significance of public relations as a promotion tool.
159) Discuss direct marketing.
160) When is it advisable to predominantly use sales promotions in a promotion mix?
161) Marketers can choose from two basic promotion mix strategies—push promotion or pull
promotion. Compare these two strategies.
162) What is the FTC three-day cooling off rule? What purpose does the rule serve?
163) Discuss the percentage-of-sales method used for setting the total budget for advertising.
164) Discuss the affordable method of setting the total budget for advertising.
165) What is personal selling? What are the advantages and disadvantages of a firm using
personal selling to promote a product or service?
166) Discuss the advantages and disadvantages of advertising.
