Deck 7: Establishing Objectives and Budgeting for the Promotional Program

Question 1

When times get tough, managers who treat the communications budget as an investment instead of an expense tend to cut down the advertising and promotional budget first.
Most managers treat the communications budget as an expense rather than an investment. As a result, when times get tough, the advertising and promotional budget is the first to be cut-even though there is strong evidence that exactly the opposite should occur.

Answer 1

False

Question 2

Repositioning of a product requires lesser time than creating or increasing the awareness levels for a brand.
Awareness levels for a brand can be created or increased fairly quickly through an intensive media schedule of widespread, repetitive advertising to the target audience. Repositioning of a product requires a change in consumers' perceptions and takes much more time.

Answer 2

False

Question 3

Under the Defining Advertising Goals for Measured Advertising Results (DAGMAR) approach, an advertising goal involves a communications task that is specific and measurable.
Under the DAGMAR approach, an advertising goal involves a communications task that is specific and measurable. A communications task, as opposed to a marketing task, can be performed by, and attributed to, advertising rather than to a combination of several marketing factors.

Answer 3

True

Question 4

While the social consumer decision journey may differ from traditional response hierarchies, it is also similar in that it envisions going through stages in the purchase decision.
While the social consumer decision journey may differ from traditional response hierarchies, it is also similar in that it envisions going through stages in the purchase decision. Like traditional model, marketers need to take specific marketing actions to help the consumer along through the process.

Question 5

Planners who view promotion from a communications perspective believe that the objective of advertising is to increase market share through sales.
Many planners approach promotion from a communications perspective and believe that the objective of advertising and other promotional-mix elements is usually to communicate information or a selling message about a product or service. Other managers argue that sales or some related measure, such as market share, is the only meaningful goal for advertising and promotion and should be the basis for setting objectives.

Question 6

Marginal analysis assumes that sales are a direct result of advertising and promotional expenditures and that this effect can be measured.
While marginal analysis seems logical intuitively, certain weaknesses limit its usefulness. These weaknesses include the assumptions that (1) sales are a direct result of advertising and promotional expenditures and this effect can be measured and (2) advertising and promotion are solely responsible for sales.

Question 7

There is strong, consistent evidence that cutting back on advertising does not hurt sales during and after a recession.
There is strong, consistent evidence that cutting back on advertising can hurt sales during and after a recession.

Question 8

Critics of communications-oriented objectives argue that it is too difficult to translate a sales goal into a specific communications objective.
Not all marketing and advertising managers accept communications objectives; they say that it is too difficult to translate a sales goal into a specific communications objective.

Question 9

If sales is used as a direct measure of response to advertising, products characterized as large-dollar purchases and those in the maturity or decline stages of the product would be less likely to benefit.
A weakness in attempting to use sales as a direct measure of response to advertising is that various situational factors may have an effect. Products characterized as large-dollar purchases and those in the maturity or decline stages of the product would be less likely to benefit.

Question 10

An advantage of sales-oriented objectives is that they provide sufficient guidance to those responsible for planning and developing the promotional program.
One problem with sales objectives is that they offer little guidance to those responsible for planning and developing the promotional program. The creative and media people working on the account need some direction as to the nature of the advertising message the company hopes to communicate, the intended audience, and the particular effect or response sought.

Question 11

In the arbitrary allocation approach, no systematic thinking occurs and no objectives are budgeted for.
The arbitrary allocation approach has no obvious advantages. No systematic thinking has occurred, no objectives have been budgeted for, and the concept and purpose of advertising and promotion have been largely ignored.

Question 12

In the objective and task method to budget setting, managers closest to the marketing effort do not have specific strategies to achieve the objective.
The major advantage of the objective and task method is that the budget is driven by the objectives to be attained. The managers closest to the marketing effort will have specific strategies and input into the budget-setting process.

Question 13

An inside-out planning process for integrated marketing communications (IMC) starts with the customer and builds backward to the brand.
Inside-out planning process begins with the marketer. It focuses on what the marketer wants to say, when the marketer wants to say it, and about things the marketer believes are important. An outside-in planning process for IMC starts with the customer and builds backward to the brand.

Question 14

The initial stages, at the base of the communications effects pyramid, are harder to accomplish than those toward the top, such as trial and repurchase.
The initial stages, at the base of the pyramid, are easier to accomplish than those toward the top, such as trial and repurchase or regular use. Thus, the percentage of prospective customers will decline as they move up the pyramid (or down the funnel).

Question 15

The competitive parity method takes advantage of the collective wisdom of the industry.
In the competitive parity method, managers establish budget amounts by matching the competition's percentage-of-sales expenditures. The argument is that setting budgets in this fashion takes advantage of the collective wisdom of the industry.

Question 16

Managers generally believe that promotional spending represents an investment of a firm's resources that requires an economic justification.
Promotional spending represents an investment of a firm's resources that requires an economic justification. Managers generally compare investment options on a common financial basis, such as return on investment (ROI).

Question 17

An objective is said to be measurable if it specifies a method and criteria for determining how well a program is working.
One characteristic of good objectives is that they are measurable; they specify a method and criteria for determining how well the promotional program is working. By setting specific and meaningful objectives, the promotional planner provides a measure(s) that can be used to evaluate the effectiveness of the marketing communications program.

Question 18

According to the concave-downward function model, as the amount of advertising decreases, its incremental value increases.
The effects of advertising budgets follow the microeconomic law of diminishing returns. As the amount of advertising increases, its incremental value decreases. The logic is that those with the greatest potential to buy will likely act on the first (or earliest) exposures, while those less likely to buy are not likely to change as a result of the advertising.

Question 19

In the top-down approach, the budgetary amount is established usually at the departmental level.
In top-down approaches, budgetary amount is established usually at an executive level and then the monies are passed down to the various departments. These budgets are essentially determined and have no true theoretical basis.

Question 20

In the integrated marketing communications (IMC) model, the flow between the communications analysis and budget determination is a two-way interaction.
In the IMC planning model, flow of the processes is unidirectional, while the flow between the communications analysis and budget determination is a two-way interaction. What this means is that while establishing objectives is an important part of the planning process, the limitations of the budget are important too.

Question 21

Which of the following is at the base of the communication effects pyramid?

A)Awareness
B)Preference
C)Trial
D)Purchase
E)Repurchase

Question 22

Direct-response advertisers generally set objectives and measure success in terms of:

A)brand awareness.
B)brand attitudes.
C)purchase intentions of the target audience.
D)sales response generated by an ad.
E)brand equity.

Question 23

Which of the following is at the top of the communication effects pyramid?

A)Awareness
B)Knowledge
C)Liking
D)Preference
E)Repurchase

Question 24

Which of the following statements best describes the relationship between marketing and communications objectives?

A)Marketing objectives and communications objectives are synonymous.
B)Marketing objectives evolve from communications objectives.
C)Communications objectives are derived from marketing objectives.
D)Communications objectives can be developed before the development of marketing objectives.
E)Both communications and marketing objectives are defined only in terms of the reach of a promotional strategy.

Question 25

Many marketing managers prefer sales-oriented objectives for advertising because they believe that:

A)the reason a company spends money on advertising and promotion is to sell its products or service.
B)the objective of advertising and other promotional mix elements is usually to communicate information or a selling message about a product or service.
C)the primary role of an IMC program is to communicate.
D)objectives should be based on the achievement of communication objectives.
E)they must provide relevant information and create favorable predispositions toward the brand before purchase behavior will occur.

Question 26

Which of the following problems is a manager most likely to face if he uses sales as a measure of advertising effectiveness?

A)Sales results offer little guidance or direction to those responsible for planning and developing the advertising program.
B)There is a short, often immeasurable, time period between when advertising is run and when sales actually occur.
C)Sales results are affected by no marketing-mix variable other than price and promotion.
D)No internal-environmental variables have any significant influence on sales results.
E)Sales are generally not considered a good indicator for an IMC program.

Question 27

Managers who use the communications effects pyramid to set objectives believe that:

A)lower-level objectives such as purchase and reuse form the foundation of the communications program.
B)the foundation of the communications program is set by accomplishing lower-level objectives such as awareness, knowledge, and comprehension.
C)advertising and promotion should first accomplish lower-level objectives such as trial and purchase.
D)advertising and promotion should first accomplish higher-order objectives, such as trial and purchase, and then create awareness and brand knowledge.
E)advertising and promotion cannot accomplish lower-order objectives.

Question 28

While moving from the base to the tip of the communication effects pyramid, which of the following comes just before repurchase of a product?

A)Awareness
B)Comprehension
C)Trial
D)Liking
E)Knowledge

Question 29

Encouraging current buyers of Spirit, an energy drink, to drink more of the beverage would be an example of a _____ objective.

A)sales-oriented
B)repositioning
C)product development
D)public-relations
E)diversification

Question 30

Sales-oriented objectives are appropriate for:

A)all online-marketing strategies.
B)retail advertising promoting special events.
C)products that have been introduced in highly volatile markets.
D)any advertising campaign aimed at maintaining brand awareness.
E)bait-and-switch marketing campaigns.

Question 31

The carryover effect:

A)has no impact on sales objectives.
B)has no effect on the relationship between advertising and sales.
C)encourages the use of nonspecific objectives.
D)is particularly apparent with mature, low-priced, and frequently purchased products.
E)helps in determining the precise relationship between advertising and sales.

Question 32

To be effective, marketing objectives need to be:

A)realistic and attainable.
B)erudite and challenging.
C)philosophical and fungible.
D)unquantifiable.
E)elaboratE.Good marketing objectives are quantifiable; they delineate the target market and note the time frame for accomplishing the goal (often one year).To be effective, objectives must also be realistic and attainable.

Question 33

The concept of advertising expenditures producing long-term, rather than immediate, results is known as:

A)the carryover effect.
B)the communication effect.
C)the low-involvement effect.
D)the halo effect.
E)the mirror-image effect.

Question 34

One important purpose of setting specific advertising goals and objectives is to:

A)provide a benchmark against which performance can be measured.
B)put constraints on the creative department.
C)have a method of determining when to delete products from the product line.
D)forecast the market share level that can be attained by good advertising.
E)protect all investors and debt holders.

Question 35

For which of the following would an advertiser be most likely to use a sales-oriented objective?

A)A direct-response ad for a record album
B)A commercial for a new type of electric-powered automobile
C)A political announcement
D)An anti-drug public announcement
E)A commercial comparing two telecommunication giants

Question 36

Arden's task is to determine what was accomplished by his company's advertising and promotional program for a vinyl-siding cleanser. We can tell him that:

A)his task is impossible.
B)all he needs is the sales results to determine what the program accomplished.
C)his task could be made easier by setting specific communication objectives.
D)he requires just the post-promotional consumer awareness levels to determine what the program accomplished.
E)all he needs to do is measure the effectiveness of the media used for promoting the product.

Question 37

While moving from the base to the tip of the communication effects pyramid, which of the following comes just before trial of a product?

A)Knowledge
B)Preference
C)Repurchase
D)Awareness
E)Comprehension

Question 38

Before setting objectives for advertising and promotion, an organization should:

A)conduct a situation analysis to identify marketing and promotional issues facing the firm.
B)develop its media plan and allocate the budget to each media.
C)evaluate the effectiveness of the advertising and promotional strategies.
D)conduct test marketing to check the effectiveness of the marketing strategies developed for the current products and services.
E)set its advertising and promotional budgets.

Question 39

The more specific the firm's advertising objectives, the:

A)easier it becomes to measure advertising effectiveness.
B)more difficult it is for competitors' advertising to be effective.
C)easier it is to measure the advertising-sales response function.
D)lesser the funding needed to meet advertising goals.
E)more difficult it is for a competitor to use competitive parity budgeting.

Question 40

Which of the following is true of marketing objectives?

A)The only aim of a firm's marketing objectives revolves around buying the right media at the right price.
B)They are usually defined in terms of specific outcomes such as sales volume, market share, profits, or return on investment.
C)They are stated only in a company's communication plan.
D)They are statements of what various aspects of the IMC program will accomplish and how a message will be delivered to the target audience.
E)The only aim of a firm's marketing objective is to communicate information or a selling message about a product or service to the target audiencE.Marketing objectives are generally stated in the firm's marketing plan and are statements of what is to be accomplished by the overall marketing program within a given time period.Marketing objectives are usually defined in terms of specific, measurable outcomes such as sales volume, market share, profits, or return on investment.

Question 41

The _____ stage in Russell Colley's hierarchical model of the communication process deals with informing consumers of the existence of the brand or company.

A)conviction
B)screening
C)comprehension
D)action
E)awareness

Question 42

Which of the following statements is true of communications objectives?

A)It is difficult to translate sales goals into communications objectives.
B)It is always easy to determine the relationship between communications objectives and sales performance.
C)Communications objectives cannot serve as operational guidelines to the planning, execution, and evaluation of promotional programs.
D)All marketing and advertising managers accept communications objectives.
E)Precise formulas are to be followed when translating sales goals into specific communications objectives.

Question 43

_____ is an approach to setting advertising goals and objectives which states that communication effects are the logical basis for advertising goals and objectives against which success or failure should be measured.

A)SOSTAC
B)The hierarchy of effects model
C)The BCG matrix
D)The Ansoff matrix
E)DAGMAR

Question 44

Which of the following is at the top of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?

A)Awareness
B)Imagery
C)Consideration
D)Shopping
E)Model intention

Question 45

According to DAGMAR, the basic function of advertising is to:

A)create sales.
B)communicate.
C)increase market share.
D)eliminate competition.
E)change consumer behavior.

Question 46

For which of the following advertising communication tasks should the specified time period be the longest?

A)Creating brand awareness
B)Increasing brand awareness levels
C)Creating knowledge of a brand attribute
D)Increasing knowledge levels of a brand attribute
E)Repositioning a brand

Question 47

Determining a target market's present level of awareness and knowledge of, and liking for, a product often requires _____ measures.

A)benchmark
B)sales interval
C)secondary
D)frequency
E)reach

Question 48

Which of the following statements is true of communications objectives?

A)When setting objectives using the communications effect pyramid, the last step to reach is trial.
B)Sales goals cannot be translated into communications objectives.
C)Marketing and advertising managers don't usually rely on experience and intuition when setting communications goals.
D)Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals.
E)Communication objectives are used particularly when the advertiser seeks an immediate responsE.Communications objectives are the criteria used in the DAGMAR approach to setting advertising goals and objectives, which has become one of the most influential approaches to the advertising planning process.

Question 49

DAGMAR is:

A)a model for setting advertising goals.
B)a philosophy of consumer behavior.
C)a method of setting sales objectives.
D)a tool used to measure financial assets.
E)an attitude measurement devicE.Colley developed the DAGMAR model for setting advertising objectives and measuring the results of an ad campaign.The major thesis of this model is that communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured.

Question 50

Which of the following is at the base of the GfK International purchase funnel that is used as a diagnostic model of consumer decision making?

A)Awareness
B)Purchase
C)Familiarity
D)Consideration
E)Imagery

Question 51

DAGMAR MOD II was developed to alleviate problems with:

A)the response hierarchy used in the original DAGMAR model.
B)the costs of using DAGMAR.
C)the fact that DAGMAR ignores sales results.
D)setting benchmark measures.
E)creating measurable communications objectives.

Question 52

According to DAGMAR, advertising objectives should be written in measurable terms that specify:

A)a communications task, a target market, a benchmark starting point, a time period, and the degree of change sought.
B)a budget, a message strategy, a media plan, and the degree of carryover effect desired.
C)the reach, frequency, and point of wearout for the advertising messages.
D)the purchase motives, demographic composition, and buying habits of the target market.
E)sales potentials, market share, return on investment, and budget forecasts.

Question 53

With respect to the stages in Russell Colley's hierarchical model of the communication process, the _____ stage deals with developing an understanding of what the product is and what it will do for the consumer.

A)conviction
B)comprehension
C)awareness
D)action
E)screening

Question 54

The DAGMAR approach to setting objectives has:

A)a negligible effect on the advertising planning process.
B)focused advertisers' attention on the value of using communications objectives rather than sales objectives.
C)never been criticized because it focuses on the hierarchy of effects model.
D)increased the degree of subjectivity used in the selection of objectives toward which planners' efforts should be directed.
E)been successful because it is easy to implement.

Question 55

Before beginning its new advertising campaign, Capital Bank conducted a study to determine its clients' levels of awareness and knowledge of the bank and its services, as well as their perceptions of the bank's image. This was done to:

A)communicate advertising goals.
B)communicate tasks.
C)establish benchmark measures.
D)communicate DAGMAR objectives.
E)establish marketing research goals.

Question 56

The _____ stage in Russell Colley's hierarchical model of the communication process deals with getting the consumer to purchase the product.

A)action
B)conviction
C)screening
D)comprehension
E)awareness

Question 57

Under the DAGMAR model, a _____ can be performed by, and attributed to, advertising rather than to a combination of marketing factors.

A)human resources task
B)financial task
C)communications task
D)marketing task
E)product production task

Question 58

According to the criteria outlined in DAGMAR, which of the following makes the best quantitative communications objective?

A)"Increase product users to 40 percent of the total market."
B)"Double the production budget, hire more assembly workers, and double the production speed in one year."
C)"Increase the number of customers mentioning the brand name when asked for brand preference from 40 percent to 50 percent in one year."
D)"Increase awareness of the brand in one year."
E)"Increase sales revenue by 10 percent."

Question 59

An airline company set the following objective for its new advertising campaign: "To increase the percentage of consumers who know our fares are lower than the competitors' to 75 percent over the next six months." Using the criteria outlined by the DAGMAR approach to setting objectives, identify what is wrong with this objective.

A)It is not a concrete statement of what message the airline wants to communicate.
B)It does not contain a benchmark starting point and the degree of change sought.
C)It does not specify a specific time period for accomplishing the objective.
D)It does not specify a well-defined target audience.
E)It fails to utilize the IMC process.

Question 60

According to the DAGMAR model, which of the following is a characteristic of a good objective?

A)A good objective is elaborative in nature.
B)A good objective specifies the target audience.
C)A good objective avoids specifying a time period.
D)A good objective specifies the current market share.
E)A good objective is based only on sales results.

Question 61

The two models that are commonly used to explain the relationship between advertising and sales are the:

A)concave-downward function and the S-shaped response function.
B)S-shaped response function and the concave-upward function.
C)marginal utility function and the S-shaped demand function.
D)S-shaped demand function and the contribution margin function.
E)concave-upward function and the S-shaped demand function.

Question 62

According to Duncan's zero-based marketing communications planning approach:

A)advertising should always be the main tool for accomplishing marketing communications objectives.
B)sales promotion is usually the best tool for accomplishing marketing communications objectives.
C)big ideas for a promotional campaign are typically based on public relations, advertising, sales promotion, or media advertising.
D)integrated marketing communications programs should lead with the promotional function that least effectively addresses a company's communication problem or opportunity.
E)managers should focus on what the customer wants and work backward to the brand.

Question 63

In the social consumer decision journey, which of the following objectives is designed to take the consumer to long-term behavioral changes?

A)Respond
B)Amplify
C)Monitor
D)Lead
E)Benchmark

Question 64

In the case of the marginal-analysis approach, profits are shown to be a result of:

A)advertising expenditure minus sales.
B)sales minus advertising expenditures.
C)gross margin minus advertising expenditures.
D)gross margin minus sales.
E)net worth minus sales.

Question 65

Creative executives from the advertising industry might oppose the DAGMAR approach to setting objectives because it:

A)puts too much emphasis on the quantitative assessment of an advertising campaign.
B)requires that speculative presentations be created and used to set benchmark measures.
C)is only successful if it develops a message that contributes to brand equity.
D)does not provide any type of communications guidelines.
E)is too concerned with qualitative assessments of an advertising campaign.

Question 66

According to the IMC planning model, the flow between communications analysis and budget determination is _____.

A)a two-way interaction
B)nonlinear
C)unidirectional
D)diagonal
E)top-down

Question 67

In the social consumer decision journey, which of the following objectives involves the marketer being aware of what is being said online about the product or brand to gain insights into how it is being perceived in the marketplace, and then respond accordingly?

A)Monitor
B)Benchmark
C)Lead
D)Respond
E)Amplify

Question 68

Which of the following is considered a major criticism of the DAGMAR approach?

A)Its belief that the only relevant measure of advertising objectives is sales.
B)Its focus on using sales-based objectives rather than communications-based objectives.
C)Its inability to define what constitutes a good advertising objective.
D)Its reliance on the hierarchy of effects model.
E)Its lack of concern with the quantitative assessment of the impact on awareness.

Question 69

According to Robert Steiner, which of the following terms is synonymous with contribution margin?

A)Asset allocation
B)Net worth
C)Financial optimization
D)Marginal analysis
E)Capital margin

Question 70

According to Don Schultz, in which type of communications planning process do the promotional planners study the various media customers and prospects use, when the marketer's messages might be most relevant to customers, and when customers are likely to be most receptive to the message?

A)Zero-based communications planning
B)Inside-out planning
C)Outside-planning
D)The carryover process
E)The recency process

Question 71

According to Professor Don Schultz, inside-out planning:

A)focuses on what the marketer wants to say, when he wants to say it, and the media he wants to use.
B)is another term for zero-based communications planning.
C)starts with the customer and builds backward to the brand when developing an IMC program.
D)is a method of implementing DAGMAR objectives.
E)is used to forecast the validity of DAGMAR objectives.

Question 72

_____ is an approach to integrated marketing communications planning that involves determining what tasks need to be done and which marketing communications planning functions should be used to accomplish them.

A)The objective/task pyramid
B)DAGMAR
C)The BCG matrix
D)Zero-based communications planning
E)Refutation planning

Question 73

According to Professor Don Schultz, outside-in planning:

A)focuses on what the marketer wants to say, when the marketer wants to say it, things the marketer believes are important to his brand, and the media form the marketer wants to use.
B)is another term for zero-based communications planning.
C)starts with the customer and builds backward to the brand when developing an IMC program.
D)is a method of implementing DAGMAR objectives.
E)is used to forecast the validity of DAGMAR objectives.

Question 74

In the social consumer decision journey, which of the following objectives deals with marketers reacting to specific issues regarding the product or brand at a personal level?

A)Monitor
B)Respond
C)Benchmark
D)Lead
E)Amplify

Question 75

Which of the following statements describes an inherent weakness in the use of the marginal-analysis model for establishing an advertising budget?

A)It is unsuitable as a basis for budgeting only in the case of direct response advertising.
B)It only considers environmental factors that affect the effectiveness of the promotional program.
C)The budget is often set according to the FIFO method.
D)The budget is determined by management solely on the basis of what is felt to be necessary.
E)It assumes that sales are determined solely by advertising and promotion.

Question 76

According to the _____ model, the effects of advertising budgets follow the microeconomics law of diminishing returns.

A)concave-upward
B)S-shaped demand
C)S-shaped response
D)marginal utility
E)concave-downward

Question 77

In the social consumer decision journey, _____ deals with designing the communications program.

A)benchmarking
B)monitoring
C)amplification
D)leading
E)responding

Question 78

Robert is working in the advertising department of a large consumer-product company. He suggests that the company use the DAGMAR approach for setting advertising goals. Which of the following statements is Robert likely to hear as an argument against the use of the DAGMAR approach?

A)Communication should be the measure of advertising effectiveness rather than sales-oriented goals.
B)The DAGMAR approach is too creative and leads to difficulty in understanding.
C)DAGMAR can be quite expensive due to research costs and is, therefore, not suitable for large companies.
D)DAGMAR is too concerned with quantitative assessment of a campaign's impact on awareness.
E)DAGMAR is appropriate only in case of direct-response advertising.

Question 79

The concave-downward function model is based on:

A)the microeconomics law of diminishing returns.
B)the economic law of supply and demand.
C)price elasticity of demand quotients.
D)the change in contribution margins as item price is changed.
E)perceptual mapping results.

Question 80

According to the concave-downward function:

A)the incremental value of advertising increases.
B)creativity is the primary advertising function.
C)advertising is unlikely to be effective as a short-term solution.
D)as the amount of advertising increases, its incremental value decreases.
E)the effects of advertising do not diminish quickly.