Question 1

Percentage of sales budgeting is a budgeting method:

Accepted Answer

Percentage of sales budgeting is a budgeting method where funds are allocated to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold. This method is based on the assumption that there is a definite relationship between the amount spent on advertising and the level of sales achieved. It ensures that the promotion budget is proportional to the company's sales forecast and enables the company to adjust advertising expenditure up or down in line with variations in sales.

Question 2

All of the following are steps in completing the promotion decision for an IMC program,except:

Accepted Answer

The steps in completing the promotion decision for an IMC program are developing, implementing, executing, and evaluating the promotion program. The option "implementing" is already included in the process and is not a separate step. Therefore, the correct answer is D.

Question 3

When sales go down,many firms try to correct the problem by increasing promotion.However,the use of _____ budgeting would instead cause its user to decrease promotion budgets after a downturn in sales.

Accepted Answer

Percentage of sales budgeting ties the promotion budget to sales revenue, so when sales decrease, the promotion budget also decreases.

Question 4

Competitive parity budgeting is a budgeting method:

Accepted Answer

Competitive parity budgeting matches the competitors' absolute level of spending or the proportion per point of market share, hence it is the best choice. Option A describes the percentage-of-sales method and option D describes objective and task method, while option C describes the bottom-up budgeting method.

Question 5

The concept of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences is referred to as:

Accepted Answer

Integrated marketing communications (IMC) refers to the practice of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences. It involves integrating various elements of promotion such as advertising, public relations, personal selling, sales promotion, direct marketing, and online marketing in a coordinated manner to deliver a unified message to consumers. The aim of IMC is to create a seamless and coherent brand experience for the customer, resulting in increased brand awareness, customer loyalty, and sales.

Question 6

The sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product)is referred to as:

Accepted Answer

The sequence of stages that a prospective buyer goes through from initial awareness of a product to eventual action is known as the hierarchy of effects. This model includes several stages: awareness, knowledge, liking, preference, conviction, and purchase. These stages are sequential and cumulative, which means a buyer needs to complete one stage before moving to the next.

Question 7

TD Bank is forecasting sales of $10 million for their new business account.RBC also released a new business account and is spending $1 million on their advertising program.TD decides that their budget will also be $1 million.TD's budgeting strategy is known as:

Accepted Answer

TD's budgeting strategy is known as competitive parity because they decided to match RBC's advertising budget of $1 million.

Question 8

Often businesses assume that by tying budget to sales,a company may have the least amount to spend when it actually needs the greatest amount of promotion dollars.This is a major fallacy of which method?

Accepted Answer

This is a common flaw of the percentage of sales method, which ties marketing budget to a percentage of current or projected sales. This approach assumes that promotions and marketing are only necessary when sales are high, but in reality, businesses often need to invest more in marketing to drive sales and build brand recognition.

Question 9

All of the following steps are part of the process used to develop an organization's promotion program EXCEPT:

Accepted Answer

The answer of All of the following steps are part...

Question 10

Imagine you have overheard the owner of a medium-sized manufacturing company saying,"We had a good year,and I think next year will be even better.I'm going to raise this year's promotion budget to 4.5 percent of last year's gross sales.That will let me do more advertising than the 3.5 percent I budgeted last year." From this information,you know the small retailer used _____ budgeting.

Accepted Answer

The information given suggests that the company is using a percentage of sales budgeting approach. The owner states that they will increase the promotion budget to 4.5 percent of last year's gross sales, indicating that the budget is directly tied to the previous year's sales.

Question 11

Allegra is an antihistamine that is only available through prescription,but to create brand awareness,it is offering people who request information about the product a cushion to use at their favourite sporting event.Its television ad shows a woman half-heartedly watching some sporting event.The voiceover asks if she is bored or congested.Next scene,the person is having a great time and is uncongested after taking Allegra.This use of the same promotional theme throughout a company's promotion is an example of how marketers use:

Accepted Answer

The use of the same promotional theme throughout different communication channels such as television ad and the offer of a cushion for a sporting event is an example of integrated marketing communications (IMC). This approach aims to create a seamless and consistent message across all touchpoints with the audience.

Question 12

TD Bank expects that sales for their new monthly business account will be $10 million this year.The marketing department was given a budget that was 1/20 of this amount.This is an example of which method?

Accepted Answer

The marketing budget being set as a fraction (1/20) of the expected sales ($10 million) is an example of the "percentage of sales" method.

Question 13

Promotional programs are specifically directed to:

Accepted Answer

Promotional programs are designed to target specific audiences, such as potential customers, existing customers or a particular demographic group. The goal is to create interest, generate leads, and encourage sales or other desired actions. Diffusers, encoders, and media convergences are not related to promotional programs.

Question 14

All of the following are aspects of the development stage of the promotion program,EXCEPT

Accepted Answer

Developing the product is not an aspect of the development stage of the promotion program. It is a separate stage in the product development process. The other choices are all important aspects of the development stage of the promotion program.

Question 15

When Apple first launched the iPad,which steps of the hierarchy of effects were the most important?

Accepted Answer

All stages were important because the iPad was a new product category and Apple needed to create awareness, drive adoption, and encourage trial in order to be successful.

Question 16

Ann's young son suffers from allergies and complains about his watery eyes and drowsiness.Ann feels bad because she thought there was nothing she could do to help him.When Ann saw the ad for a new drug that counters these symptoms in Ladies' Home Journal magazine,she vowed to ask his doctor about this product on his next visit.At which stage in the hierarchy of effects is Ann?

Accepted Answer

Ann has moved quickly from the awareness stage to the interest stage because she has seen an ad for a new drug that counters her son's symptoms and has vowed to ask his doctor about it.

Question 17

CoolMax Alta is a fabric made by Dupont.It is used in the manufacture of exercise clothes because it keeps the user "cool and dry." The ads for the fabric in health and fitness ads convinced Kumar to buy a pair of socks made of the material.Since he had never before owned anything made of this fabric,Kumar was in which stage of the hierarchy of effects?

Accepted Answer

Kumar is in the trial stage of the hierarchy of effects because he has never owned anything made of this fabric before and is trying it out by buying a pair of socks made of the material. This stage is where consumers first try out a product to see if they like it and if it meets their needs.

Question 18

The first stage in the hierarchy of effects is:

Accepted Answer

The first stage in the hierarchy of effects is awareness. Before consumers can make a purchasing decision, they must first become aware of a product or service. This means that the consumer must have knowledge of the product or service, and understand its basic features and benefits. Without awareness, there can be no interest or evaluation of the product.

Question 19

No matter what the specific objective might be,from building awareness to increasing repeat purchases,promotion objectives should possess three important qualities.They should be designed for a well-defined target audience,cover a specified time period,and:

Accepted Answer

Promotion objectives should be measurable so that their effectiveness can be evaluated and adjustments can be made if necessary. Relying on fear or humor may not necessarily be appropriate for every promotion objective, and appealing to intermediaries may not always apply.

Question 20

The first decision in developing a promotion program is to:

Accepted Answer

Identifying the target audience is the first step in developing a promotion program. This helps in understanding the needs, preferences, and behavior of the target audience, which is crucial for designing effective promotional activities. Setting the budget, stating the mission, and selecting the appeal are important decisions, but they follow after understanding the target audience.

Quiz 16: Integrated Marketing Communications and Direct Marketing