Advertising and Promotion An Integrated Marketing Communications Perspective 11Th Edition By George Belch – Test Bank
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Sample Test
Chapter 03 Test Bank
Student: ___________________________________________________________________________
1. The
primary function of promotional planners is to provide information or
entertainment to their subscribers, viewers, or readers.
True False
2. Digital/interactive
agencies and public relations firms are examples of organizations that provide
specialized marketing communication services.
True False
3. While
many people both inside and outside the organization have some input into the
advertising and promotion process, direct responsibility for administering the
program must be assumed by someone within the firm.
True False
4. In
the most common example of a centralized system, the advertising or marcom
manager controls the entire promotions operation.
True False
5. An
advantage of the centralized system is that each brand receives concentrated
managerial attention, resulting in faster response to both problems and
opportunities.
True False
6. Retail
giant Target has an internal creative department that handles the design of its
weekly circulars, direct-mail pieces, in-store displays, promotions, and other
marketing materials. This is an example of an in-house agency.
True False
7. A
decentralized organizational system is often used when companies do not have
many different divisions, product or service lines, or brands to advertise.
True False
8. A
disadvantage of the decentralized system is that each brand does not receive
concentrated managerial attention, resulting in slower response to both
problems and opportunities.
True False
9. In-house
agencies are preferred by some companies because they keep the marketing
communications function more closely tied to top management.
True False
10.
Nearly two-thirds of the domestic billings are handled by 900 of
the smallest agencies in the United States.
True False
11.
Superagencies were formed when large advertising organizations
disintegrated to form separate, more specialized individual agencies.
True False
12.
The role of account representatives is likely to disappear as
agencies and their clients are beginning to liaise directly with each other.
True False
13.
Account planners work with the client as well as other agency
personnel, including the account executives, creative team members, research
department personnel, and media specialists.
True False
14.
The creative services department of an agency analyzes, selects,
and contracts for space or time in the media that will be used to deliver the
client’s advertising message.
True False
15.
The layout of a print ad is known as a storyboard.
True False
16.
Media buying services have found a niche by specializing in the
analysis and purchase of advertising time and space.
True False
17.
Programmatic buying has declined in recent years.
True False
18.
Proponents of the commission system argue that the system is
more flexible than it appears as agencies often perform other services for
large clients at no extra charge.
True False
19.
A cost-plus system requires that the agency keep detailed
records of the costs it incurs in working on a client’s account.
True False
20.
The agency evaluation is often done on a subjective, informal
basis, particularly in smaller companies where ad budgets are low.
True False
21.
The qualitative audit focuses on how the agency conducts its
business. It is designed to verify costs and expenses, the number of personnel
hours charged to an account, and payments to media and outside suppliers.
True False
22.
Loyalty to a single agency is becoming more common as marketers
seek new ways of connecting with consumers.
True False
23.
A typical direct-marketing agency does not include a creative
department.
True False
24.
One of the more widely used collateral service organizations is
the marketing research firm.
True False
25.
An agency with integrated marketing capabilities can create a
single image for the product or service and address everyone, from wholesalers
to consumers, with one voice.
True False
26.
According to marketing executives, the biggest obstacle to
implementing integrated marketing communications (IMC) is the lack of people
with the broad perspective and skills to make it work.
True False
27.
_____ are the major participants in the integrated marketing
communications process who pay for advertising campaigns and promotions.
28.
Collateral service providers
29.
Clients
30.
Advertising agencies
31.
Media organizations
32.
Special service organizations
28.
Momentum Automobiles, an automobile manufacturer, hires Dreams
Inc. to cater to its advertising needs. Momentum is only required to provide
the necessary finances and does not take part in any decision making. In the
given scenario, Momentum Automobiles would be classified as a(n)
29.
client.
30.
illustrator.
31.
full-service agency.
32.
advertising agency.
33.
media organization.
29.
In the ad agency industry, clients refer to
30.
an advertiser or organization that has the product, service, or
cause that needs to be marketed.
31.
the media, which plays a crucial role in the process of marketing
communication.
32.
a purchaser of the consumer product advertised.
33.
a market for business or consumer products.
34.
an advertising agency that specializes in the creation of the
communications message.
30.
A(n) _____ is an outside firm that specializes in the creation,
production, and/or placement of the communications message and that may provide
other marketing and promotions-related services.
31.
media organization
32.
sales promotion firm
33.
research organization
34.
advertising agency
35.
creative boutique
31.
From the perspective of a promotional planner, the primary
purpose of media is to
32.
represent the company’s senior management in negotiations with
an ad agency.
33.
provide the company with strategic recommendations and analysis.
34.
provide an environment for the firm’s marketing communications
message.
35.
help conduct a SWOT analysis.
36.
provide appropriate funding for all marketing activities.
32.
The primary function of most media is to
33.
assist the market research organization by conducting market
surveys.
34.
coordinate their activities with direct-marketing agencies.
35.
provide information and entertainment to their audience.
36.
prepare the budget for the advertising and promotion process.
37.
compensate ad agencies through a commission system.
33.
Creative Networks is a major participant in the advertising and
promotion process. It attracts various companies to buy space and time with
them by providing the same at discounted rates. Creative Networks helps these
companies reach their target market effectively by communicating their message.
In this scenario, Creative Networks is a(n)
34.
advertiser.
35.
collateral service provider.
36.
media organization.
37.
creative boutique.
38.
sales promotion agency.
34.
With respect to the major participants in the advertising and
promotions process, which of the following participants include sales promotion
agencies, digital/interactive agencies, and public relations firms?
35.
advertising agencies
36.
media organizations
37.
collateral service agencies
38.
specialized marketing communications services agencies
39.
bait-and-switch marketing service agencies
35.
Basic functions of the manager and staff in advertising and
marketing communications include all of the following
36.
administration and execution.
37.
coordination with other departments.
38.
preparing materials for the sales force.
39.
managing the sales force.
40.
coordination with outside agencies and services.
36.
In companies that follow a centralized organizational system,
who among the following is likely to be given the title “marketing
communications manager”?
37.
art director
38.
brand manager
39.
advertising manager
40.
product manager
41.
copywriter
37.
Which of the following statements is true about the role of top
management in the advertising and promotion decision-making process?
38.
The top management’s day-to-day responsibilities usually include
decision making and operations of advertising and promotion.
39.
The top management does not provide input in the advertising and
promotion process.
40.
The top management is usually interested in how the advertising
program represents the organization.
41.
The top management is only interested in the amount of money
that must be allocated to advertising and promotion.
42.
The top management is more interested in tactical planning than
strategic planning.
38.
Under a centralized organizational system, the responsibility
for planning and controlling the advertising and promotional functions lies
with the
39.
brand manager.
40.
marketing communications manager.
41.
product manager.
42.
art director.
43.
account planning supervisor.
39.
Which of the following is true of the role of an advertising
manager, under a centralized management system?
40.
It includes budgeting and planning media schedule.
41.
It primarily involves checking the accuracy of financial reports
and records.
42.
It includes employee compensation management.
43.
It involves administering the firm’s sales and sales promotion
programs.
44.
It ensures that day-to-day sales targets are met.
40.
Which of the following is true about the functions of the
advertising manager in a centralized system?
41.
The advertising manager is responsible for all sales and sales
management activities.
42.
The advertising manager has the final say in determining the
sales forecasts.
43.
The role of an advertising manager is similar to the role of an
art director in a decentralized organization.
44.
The advertising manager controls the entire promotions
operation.
45.
The advertising manager does not deal with planning and
budgeting.
41.
In a centralized organizational structure, the _____ department
is responsible for developing promotional plans that will be approved by management
and recommending a promotions program based on the overall marketing plan,
objectives, and budget.
42.
production
43.
finance
44.
auditing
45.
advertising
46.
product planning
42.
A company often uses a centralized organizational system when
43.
it has many different divisions within the company.
44.
it does not want to involve the top management in the
decision-making process.
45.
it does not have many product lines or brands to advertise.
46.
it wants to involve a large number of people in making program
decisions.
47.
it wants to have a category management system in place.
43.
Which of the following differentiates a centralized organization
from a decentralized organization?
44.
In a centralized organization, the advertising manager is
responsible for all promotions activities including sales, whereas in a
decentralized organization, the advertising manager is responsible for all
promotions activities except sales.
45.
A centralized organizational system is used in large companies
with more than 1,000 employees, whereas a decentralized organizational system
is used only in smaller companies with no more than 500 employees.
46.
In a centralized organization, an advertising manager controls
the entire promotions operation for all the products of a company, whereas in a
decentralized organization, each product is assigned to a different brand
manager.
47.
A centralized organizational structure includes a category
management system, whereas a decentralized organizational structure does not
include one.
48.
In a centralized organization, the efforts of all the brand
managers are coordinated by the category managers, whereas in a decentralized
organization, the efforts of all the brand managers are coordinated by the
advertising managers.
44.
Which of the following is true of the problems associated with
the centralized organizational structure?
45.
It does not enable a transfer of functions and responsibilities
associated with advertising and promotions to the brand manager.
46.
It does not facilitate coordination with external advertising
agencies.
47.
It makes it difficult for the advertising department to
understand the overall marketing strategy of the brand.
48.
It makes it difficult for the brand manager to coordinate with
the various departments within the organization.
49.
It facilitates disassociation of advertising managers from the
category management system.
45.
In a decentralized system, a(n) _____ is responsible for the
total management of the brand, including planning, budgeting, sales, and profit
performance.
46.
brand manager
47.
media manager
48.
collateral services provider
49.
account executive
50.
sales manager
46.
Under a decentralized system, the advertising department is
generally a part of
47.
finance.
48.
sales.
49.
product development.
50.
marketing services.
51.
research and development.
47.
Jim, an employee of CL Inc., is responsible for planning,
marketing, budgeting, sales, and profit performance of a specific brand. He has
two assistants who help in planning, implementing, and controlling the
marketing program. In this scenario, Jim is an example of a(n)
48.
product manager.
49.
art director.
50.
account executive.
51.
copywriter.
52.
account director.
48.
When Procter & Gamble, Unilever, PepsiCo, Google, and Nestle
assign each product/service or brand to a brand manager who is responsible for
the total management of the brand, including planning, budgeting, sales, and
profit performance, these companies are using a _____________________________
system.
49.
finance
50.
sales
51.
decentralized
52.
centralized
53.
product
49.
In a decentralized system, individuals who oversee management of
the entire product category and focus on the strategic role of the various
brands in order to build profits and market share are known as
50.
category managers.
51.
art directors.
52.
account executives.
53.
account supervisors.
54.
media planners.
50.
A company often uses a decentralized organizational system when
51.
it has multiple divisions and many different products.
52.
it does not facilitate a manufacturing or industrial operation.
53.
it wants one advertising manager to handle the promotional
activities of all the products.
54.
it has a top management that is actively involved in day-to-day
decision making.
55.
it lacks the ability to handle multiple brands.
51.
Which of the following describes a limitation associated with
the decentralized organizational structure for advertising?
52.
Brand managers are often overqualified and tend to feel superior
to product managers.
53.
Brand managers are typically from nonmanagement backgrounds.
54.
Brand managers do not devote enough attention to short-term
planning and administrative tasks.
55.
Brand managers often end up competing for management attention,
marketing budgets, and other resources.
56.
Brand managers typically rely on intuition and often jeopardize
the creative activities of the advertising agency.
52.
Diva Boutique, located in Manhattan, relies on external
advertising agencies for its advertising needs, but due to its growing global
presence, it is now worried that using external agencies may lead to
inconsistency in delivery of its brand image. It also wants to maintain tighter
control over its advertising and promotional activities. Which of the following
advertising agencies should it adopt?
53.
collateral service agency
54.
buzz marketing agency
55.
in-house agency
56.
Centralized agency
57.
creative boutique
53.
Which of the following is true of an in-house advertising
agency?
54.
It avoids top management involvement with the marketing
communications function.
55.
It increases advertising and promotion costs.
56.
It provides greater stability.
57.
It provides more objectivity and range of services in comparison
to outside agencies.
58.
It offers more access to top creative talent.
54.
A major reason why some companies choose to use an in-house
agency is to
55.
maintain creative freshness.
56.
reduce advertising and promotions costs.
57.
reduce the threat of potential lawsuits.
58.
make use of top creative talent.
59.
dissimilate brand management and advertising from under one
roof.
55.
Which of the following is a potential benefit of an in-house
advertising agency?
56.
greater control
57.
access to more highly skilled specialists
58.
potential to obtain varied perspective on advertising problems
59.
greater flexibility
60.
greater objectivity
56.
A company that uses an in-house agency might turn its
advertising and promotion tasks over to an outside agency in order to
57.
obtain greater control over the advertising process.
58.
reduce costs.
59.
obtain greater objectivity.
60.
make coordination of the advertising and promotional process
easier.
61.
save media commissions.
57.
Which of the following is a disadvantage of using a centralized
organizational system?
58.
longer response time
59.
very little top-management involvement
60.
involvement of many people in making program decisions
61.
lack of communication
62.
discontinuity in staff
58.
Which of the following is an advantage of a decentralized
organizational system?
59.
effective decision making
60.
Rapid response to problems and opportunities
61.
lack of internal conflicts
62.
enhanced authority
63.
external rather than internal focus
59.
Which of the following is a disadvantage of a decentralized
organizational system?
60.
inability to handle multiple product lines
61.
ineffective decision making
62.
longer response time
63.
lack of flexibility
64.
lack of managerial attention
60.
Lack of long-term objectivity, flexibility, and creativity are a
few of the reasons why a company might move away from
61.
a decentralized marketing system.
62.
an in-house agency.
63.
the use of full-service advertising agencies.
64.
a centralized marketing system.
65.
the use of creative boutiques.
61.
Which of the following is a disadvantage of using an in-house
advertising agency?
62.
external focus rather than internal
63.
limited access to top-level talent
64.
reduced cost savings
65.
less stability
66.
decreased coordination
62.
Which of the following refers to the amount of client money that
agencies spend on media purchases and other equivalent activities?
63.
billings
64.
media commissions
65.
retainers
66.
activity fees
67.
ad traffic compensation
63.
Superagencies were formed
64.
because advertisers were disenchanted with large agencies.
65.
because advertisers wanted agencies to be more flexible and
responsive than traditional agencies.
66.
to save money for clients.
67.
so that agencies could provide their clients with integrated
marketing communications services worldwide.
68.
to lessen the need for competitive pricing.
64.
Which of the following statements is true about superagencies?
65.
They were formed when large advertising agencies were broken down
into smaller, more specialized agencies.
66.
Advertisers who became disenchanted with the superagencies moved
to smaller agencies that were flexible and more responsive.
67.
They were formed so that agencies could provide clients with
effective supply chain management.
68.
Advertisers who generally worked with superagencies converted
them into in-house agencies to gain greater flexibility and objectivity.
69.
They were formed so that agencies could provide clients with
just-in-time inventory management systems.
65.
Which of the following statements explains why an organization
would want to use an external advertising agency?
66.
It reduces advertising and promotional costs for the client.
67.
It enables the client to gain more control of the promotional
activities.
68.
It allows more access to the top management of the client firm.
69.
It helps provide a consistent and integrated global brand image.
70.
It provides the client with the services of highly skilled
individuals.
66.
Which of the following statements is true about outside advertising
agencies?
67.
Typically, external ad agencies do not use media analysts and
researchers.
68.
External agencies are often preferred for their greater skill
and expertise levels.
69.
Generally, most external ad agencies do not offer creative
services.
70.
External ad agencies are generally cheaper than in-house
agencies.
71.
Unlike in-house agencies, outside agencies can be used to
portray a singular global image.
67.
Which type of ad agency is most likely to offer its clients an
extensive range of marketing, communications, and promotions services,
including planning, creating, and producing the advertising; performing
research; and selecting media?
68.
a creative boutique
69.
a full-service agency
70.
a media buying service
71.
a collateral agency
72.
a switch marketing agency
68.
An ad agency that offers its clients a complete range of
marketing, communication, and promotion services is known as a(n)
69.
creative boutique.
70.
media buying service.
71.
account service agency.
72.
full-service agency.
73.
buzz marketing agency.
69.
Mars Inc., a San Diego–based advertising agency, offers various
services, such as sales promotion, marketing research, package design, direct
marketing, and publicity as well as planning, creation, and advertising
production. In this scenario, Mars is an example of a(n)
70.
creative boutique.
71.
full-service agency.
72.
media buying organization.
73.
account service organization.
74.
media specialist company.
70.
Gerald is responsible for keeping track of his agency’s
________________, or the amount of client money his agency spends on media purchases
and other equivalent activities.
71.
billings
72.
publicity
73.
promotions
74.
media buying
75.
direct marketing
71.
Which of the following statements is true about account
services?
72.
It is an in-house service for the advertisement agency that is
independent of its clients’ obligations.
73.
It is an advertising agency that solely provides media space and
time.
74.
It provides the creative team with in-depth storyboards.
75.
It is a research department in the advertising agency that
assists in creating the advertising message for the client.
76.
It is the link between the advertising agency and its clients.
72.
A(n) _____ is responsible for understanding the advertiser’s
marketing and promotional needs and interpreting them to agency personnel.
73.
account executive
74.
database manager
75.
media specialist
76.
copywriter
77.
art director
73.
Which of the following is true of the role of an account
executive?
74.
It is primarily considered a research function.
75.
It is used only by centralized organizations.
76.
It is generally considered a subsidiary function.
77.
It includes an extensive creative aspect.
78.
It is the focal point of agency-client relationships.
74.
In a full-service agency, the function of gathering, analyzing,
and interpreting information that is useful in developing advertising is the
responsibility of the _____ department.
75.
audit
76.
personnel
77.
media
78.
account management
79.
research
75.
Greg is hired into the marketing services department of a
full-service advertising agency. His job profile includes gathering information
relating to the client’s product and service that can be used in the
development of the creative strategy. He has to collect information from
various other departments in the firm to gain a better understanding of the
client’s target audience. In this scenario, Greg has been hired as a(n)
76.
art director.
77.
account planner.
78.
illustrator.
79.
media specialist.
80.
account executive.
76.
The _____ is a document that the agency’s creative department
uses to guide the development of advertising ideas and concepts.
77.
tagline brief
78.
product data sheet
79.
creative brief
80.
copywriter collateral
81.
marketing plan
77.
Account planning has become a very important and demanding
function in many agencies because
78.
it facilitates organizations in reducing the number of effective
communication channels.
79.
it enables organizations with a centralized management to reduce
costs.
80.
it provides greater value to the final consumer.
81.
it provides the creative team with more insight into consumers.
82.
it has replaced brand management as the primary marketing
function.
78.
Which of the following departments of a full-service agency
analyzes, selects, and contracts for space or time to publish or broadcast the
client’s advertising message?
79.
research department
80.
media department
81.
account management department
82.
creative services department
83.
art department
79.
Which of the following statements is true of media departments?
80.
Their brief is primarily creative.
81.
They lack the ability or the authority to negotiate prices.
82.
They review information on demographics and radio listenership.
83.
They are in charge of creating the clients’ advertising message.
84.
They are generally headed by an account planner.
80.
_____ are the individuals in the creative services department of
an ad agency who conceive the ideas for the ads and compose the advertising
message.
81.
Copywriters
82.
Art directors
83.
Account planners
84.
Account executives
85.
Media planners
81.
Which of the following statements is true of media departments?
82.
Their brief is primarily creative.
83.
They lack the ability or the authority to negotiate prices.
84.
They review information on demographics and radio listenership.
85.
They are in charge of creating the clients’ advertising message.
86.
They are generally headed by an account planner.
82.
_____ are drawings that show what the print ad will look like
and from which the final artwork will be produced.
83.
Creative briefs
84.
Packshots
85.
Layouts
86.
Art infusions
87.
Product sheets
83.
Which department within an advertising agency supervises the
casting of people to appear in the ad and the setting for the scenes?
84.
account services department
85.
art department
86.
traffic department
87.
media department
88.
production department
84.
The _____ department coordinates all phases of production to see
that the ads are completed on time and that all deadlines for submitting the
ads to the media are met.
85.
research
86.
production
87.
art
88.
traffic
89.
personnel
85.
With respect to the creative services department of a
full-service agency, the layout for TV commercials is known as a(n)
86.
storyboard.
87.
logo.
88.
art infusion.
89.
packshot.
90.
creative brief.
86.
Which of the following is true of the traffic department in a
full-service agency?
87.
It is headed either by an art director or a graphic designer who
produces the final artwork for the ad.
88.
It can be located only within the research department and is
used to gather information through primary or secondary sources.
89.
It gathers, analyzes, and interprets information that will be
useful in developing advertising for the agency’s clients.
90.
It may be located in the creative services area of the agency or
be a part of media or account management.
91.
It is headed either by a copywriter or a media planner who
selects and contracts for space and time in media.
87.
Which of the following departments in a full-service agency is
responsible for the development and execution of advertisements?
88.
traffic department
89.
account services department
90.
media planning department
91.
creative services department
92.
production department
88.
Within the creative services department of a full-service
agency, once the copy, layout, illustrations, and mechanical specifications of
the ad have been completed and approved, the ad is turned over to the _____
department.
89.
traffic
90.
account planning
91.
production
92.
research
93.
art
89.
A sequence of frames or panels that depict a TV commercial in
still form is called a(n)
90.
screenplay.
91.
creative brief.
92.
storyboard.
93.
placard.
94.
art infusion.
90.
The majority of an advertising agency’s expenses are in the area
of
91.
media costs.
92.
salaries and benefits for employees.
93.
sales promotions.
94.
production overheads.
95.
market research.
91.
J&J is an advertising agency that handles each of its
clients by assigning individuals from various departments to work together as a
team on their accounts. With respect to the organizational structures employed
by a full-function advertising agency, J&J is using a _____ organizational
system.
92.
departmental
93.
group
94.
matrix
95.
creative boutique
96.
media boutique
92.
With respect to the types of organizational structures, some
advertising agencies prefer the departmental system because
93.
it completely avoids the usage of a commission system to compensate
ad agencies.
94.
it gives employees the opportunity to develop expertise in
servicing a variety of accounts.
95.
it converts a full-function advertising agency into a creative
boutique.
96.
it avoids the involvement of the top management in the
decision-making processes.
97.
it allows the creative team and the media team to work together
as a group.
93.
With respect to the types of organizational structures, many
advertising agencies prefer the group system because
94.
it completely avoids the usage of the incentive-based
compensation system.
95.
it leads to continuity in client servicing.
96.
it avoids the involvement of the top management in the
decision-making processes.
97.
it converts a full-service agency into a media specialist
agency.
98.
it keeps the departments within an organization independent of
each other.
94.
Which of the following is true of a creative boutique?
95.
They lack media, research, and account planning capabilities.
96.
They lack creative personnel such as copywriters and artists.
97.
They are headed by a media buying director.
98.
They have an inherent disadvantage of being cumbersome and
time-consuming.
99.
They have lesser access to creative talent.
95.
Pluto Inc. is a small agency that employs writers, artists, and
other innovative personnel. It is a specialized agency and does not deal with
research, account planning, or television and radio space buying. In this
scenario, Pluto Inc. is an example of a(n)
96.
creative boutique.
97.
media specialist company.
98.
account services organization.
99.
media procurement specialist.
100.
content management specialist.
96.
Which of the following statements is true about creative
boutiques?
97.
They generally have media, research, and account planning
capabilities.
98.
They are large ad agencies that provide all types of advertising
and promotion services.
99.
They often subcontract work to full-service agencies.
100.
They tend to provide quicker innovative services due to less
bureaucracy.
101.
They are generally characterized by extensive internal politics.
97.
Independent companies that exclusively help in the purchase of
radio and television time are known as
98.
creative boutiques.
99.
SMM organizations.
100.
macro-marketing agencies.
101.
media specialist companies.
102.
storyboard specialists.
98.
Under which type of compensation system might an agency be more
inclined to recommend expensive media such as network television and national
magazines to its clients?
99.
commission system
100.
fee arrangement system
101.
cost-plus system
102.
incentive-based compensation system
103.
objective-and-task compensation system
99.
A major development in the purchasing of advertising media in
recent years has been the rapid growth of _________________________, which
refers to a wide range of technologies that are automating the buying,
placement, and optimization of advertising media.
100.
commission systems
101.
programmatic buying
102.
cost-plus systems
103.
incentive-based systems
104.
objective-and-task systems
100.
Defenders of the commission system argue that
101.
it is generally easier to administer and keeps the emphasis in
agency compensation on nonprice factors.
102.
it encourages agencies to recommend direct mail, sales
promotion, and public relations to their clients.
103.
it does not tie agency compensation to media costs.
104.
it helps in reducing skyrocketing media costs.
105.
it is similar to the fixed-fee method.
101.
CL Ads, an ad agency, provides media services for its clients.
It prepares and places ads in local and national magazines at a specified cost.
However, the agency bills its clients a flat 15 percent of the ad cost as
revenue. In this scenario, the agency is using a(n) _____ system.
102.
incentive-based
103.
flexible revenue
104.
cost-plus
105.
commission
106.
fixed-fee
102.
_____ is a system whereby the commissions average from 8 to 10
percent or are based on a sliding scale that becomes lower as the clients’
media expenditures increase.
103.
Negotiated commission system
104.
Fixed-fee commission system
105.
Cost-plus commission system
106.
Incentive commission system
107.
Pro-rata commission system
103.
Which of the following statements is true about agency
commissions?
104.
The negotiated commission system is increasingly replacing the traditional
commission system.
105.
Agencies are increasingly relying on mass media for their
income.
106.
Agencies rely on incentive-based commission as companies are
expanding their IMC programs.
107.
Typically, agencies are unwilling to negotiate their commission
rates.
108.
Generally, agencies receive their highest commissions from
direct mail and sales promotions.
104.
Negotiated commission rates for advertising agencies
105.
average between 8 and 10 percent.
106.
are usually set between 15 and 25 percent.
107.
are typically not based on a sliding scale.
108.
are rarely used by consumer-products advertisers.
109.
are designed primarily to benefit agencies.
105.
A(n) _____ is a type of compensation arrangement where an agency
charges a client a basic monthly amount for all of its services and credits to
the client any media commissions earned.
106.
fixed-fee method
107.
negotiated commission method
108.
cost-plus agreement method
109.
incentive-based compensation system
110.
objective-and-task compensation system
106.
Fixed-fee method of compensation is also called
107.
objective-and-task method.
108.
value-based compensation.
109.
incentive-based compensation.
110.
cost-plus fee method.
111.
straight-fee method.
107.
Under the _____ system of compensation, the client agrees to pay
the agency a fee based on the price of its work along with some agreed-on
profit margin.
108.
fixed-fee
109.
negotiated commission
110.
straight-fee
111.
incentive-based
112.
cost-plus
108.
Under which of the following compensation systems is the agency
compensation tied to performance?
109.
fixed-fee system
110.
incentive-based system
111.
cost-plus system
112.
negotiated commission system
113.
straight-fee system
109.
Dynamic Inc., an advertising agency in Manhattan, receives
compensation from its clients based on Dynamic’s sales and market share
performance. This is an example of a(n) _____ compensation system.
110.
fixed-fee
111.
straight-fee
112.
value-based
113.
cost-plus
114.
objective-and-task
110.
Thirty-seven percent of companies surveyed in an ANA study used
a combination of fees and commissions to compensate agencies, which is a _____
compensation system.
111.
fixed-fee
112.
straight-fee
113.
value-based
114.
cost-plus
115.
blended
111.
Which of the following is the reason why companies are
increasingly choosing to opt for an incentive-based system?
112.
to encourage agencies to use more mass-media advertising
113.
to encourage agencies to stop using network TV advertising
114.
to avoid the involvement of top management in the
decision-making process
115.
to demand more accountability and pay the agencies based on
their performance
116.
to encourage agencies to keep detailed records of the costs
incurred while working with clients
112.
As more companies adopt the integrated marketing communications
approach to their advertising and promotions
113.
they are increasingly concentrating on a mass-media strategy as
it is relatively cheaper.
114.
they are reducing their reliance on mass-media advertising,
which is leading to changes in the way they compensate their agencies.
115.
they are likely to move completely to cost-plus compensation
systems.
116.
incentive systems are becoming less important in compensating
agencies.
117.
fee agreements and cost-plus systems are generally being avoided
in favor of the traditional compensation method.
113.
A(n) _____ audit of an agency is designed to verify costs,
expenses, and payments to outside suppliers.
114.
financial
115.
operational
116.
departmental
117.
qualitative
118.
grant and contract
114.
A _____ audit focuses on the agency’s efforts in planning,
developing, and implementing the client’s advertising programs and considers
the results achieved.
115.
quantitative
116.
social
117.
financial
118.
qualitative
119.
contract-grant
115.
Pluto Inc., a new ad agency, primarily obtains clients through
cold calls, promotional letters, and following up on known leads. The company
maintains a separate department which is responsible for bringing in new
accounts. In this scenario, the company is obtaining clients through
116.
referrals.
117.
solicitation.
118.
public relations.
119.
publicity.
120.
reputation management.
116.
A(n) _____ is an individual who specializes in helping clients
choose their advertising agencies.
117.
social media consultant
118.
ad agency review consultant
119.
ad agency account representative
120.
brand manager
121.
ad agency compensation specialist
117.
The most effective way for an agency to acquire new business is
through
118.
its image and reputation.
119.
solicitation.
120.
a qualitative audit.
121.
presentations.
122.
its pricing strategy.
118.
_____ are agencies that specialize in offering services, such as
database management, and the ability to create, produce, and disseminate
different types of communications that go straight to target customers.
119.
Digital-interactive agencies
120.
Sales promotion agencies
121.
Direct-marketing agencies
122.
Public relations firms
123.
Creative boutiques
119.
Venus Corp. is an agency that specializes in providing media
services, direct mail, database management, and research services. It also
offers creative and production services to its clients. In this scenario, Venus
is an example of a _____ agency.
120.
creative boutique
121.
public relations
122.
digital-interactive
123.
direct-marketing
124.
sales promotion
120.
_____ specialize in the development and management of
sweepstakes, refund and rebate offers, and incentive programs.
121.
Sales promotion agencies
122.
Direct-response agencies
123.
Creative boutiques
124.
Interactive agencies
125.
Collateral agencies
121.
WriteOn Stationery is new in the market. They have hired a
specialized agency to promote their products in the market. Which type of
specialized service would help them coordinate a program to allow consumers to
mail in Universal Product Codes from three WriteOn products to receive a free
Redbox movie rental?
122.
sales promotion agency
123.
collateral agency
124.
creative boutique
125.
interactive agency
126.
direct-response agency
122.
Rapp and Wunderman are subsidiaries of large agency holding
companies that provide services for companies that want to communicate with
consumers through telemarketing, direct mail, television, the Internet, and
other forms of direct-response advertising. They are examples of
___________________ agencies.
123.
direct-marketing
124.
collateral
125.
boutique
126.
interactive
127.
sales promotion
123.
Organizations that specialize in the creation of marketing tools
such as websites for the Internet, banner ads, search engine optimization,
mobile marketing, and social media campaigns are known as
124.
sales promotion agencies.
125.
public relations firms.
126.
creative boutiques.
127.
interactive agencies.
128.
direct-response agencies.
124.
A _____ is the type of firm an organization would hire to
develop and implement programs to manage the organization’s image and affairs
with consumers and other relevant audience.
125.
PR agency
126.
sales promotion agency
127.
media mix organization
128.
creative boutique
129.
direct-response agency
125.
A client wants to organize a concert to raise funds for The
Little Ones, an orphanage in Houston. Which specialized service would be
responsible for preparing news releases and promoting and managing the concert?
126.
a digital agency
127.
a marketing research firm
128.
an interactive agency
129.
a public relations firm
130.
a sales promotion agency
126.
Interactive agencies are also called
127.
digital agencies.
128.
public relation firms.
129.
creative boutiques.
130.
sales promotion agencies.
131.
collateral agencies.
127.
Package design firms, market research companies, photographers,
and printers are examples of
128.
sales promotion agencies.
129.
interactive agencies.
130.
collateral service providers.
131.
companies that assist in media buying.
132.
creative boutiques.
128.
Which of the following is considered to be a collateral services
provider?
129.
public relation firms
130.
sales promotion agencies
131.
digital marketing agencies
132.
full-service interactive agencies
133.
market research firms
129.
Which of the following is likely to conduct in-depth interviews
and focus groups, as well as market surveys in order to gather objective
information that is valuable to the advertiser’s promotional programs?
130.
market research companies
131.
media specialist organizations
132.
media buying organizations
133.
creative boutiques
134.
sales promotion agencies
130.
Marketing research firms
131.
seldom conduct qualitative research for ad agencies.
132.
are one of the most widely used types of collateral service
organizations.
133.
typically do not provide quantitative market research services.
134.
are not typically used by ad agencies.
135.
can gather only subjective information.
131.
Which of the following is true about integrated services?
132.
They help in eliminating the requirement for economies of scale.
133.
They help in maintaining control of the entire promotional
process.
134.
They create individual branding for varied products or services.
135.
They make it difficult for the client to coordinate all of its
marketing efforts.
136.
They reduce synergy in the promotional process.
132.
Which of the following is considered to be the greatest obstacle
in implementing integrated marketing communications (IMC)?
133.
IMC often results in greater economies of scale.
134.
Since each communication discipline has the same cost structure,
the concept of IMC itself becomes invalid.
135.
IMC is only compatible with smaller organizations and surveys
have witnessed compatibility issues when the process is scaled up.
136.
The implementation of IMC is most likely to result in
interdepartmental budget allocations problems.
137.
The lack of people with the requisite broad perspective and skills
to implement IMC presents the biggest obstacle.
133.
Which of the following is an statement about integrated
marketing communications firms?
134.
IMC often results in greater economies of scale.
135.
An agency that has all marketing operations in-house is usually perceived
as best in breed.
136.
Having one agency in control of the entire IMC process achieves
greater synergy among each of the communications program elements.
137.
One challenge to IMC is a lack of people with the requisite
broad perspective and skills to make it work.
138.
IMC agencies make it convenient for the client to coordinate all
of its marketing efforts through one agency.
Chapter 03 Test Bank Key
1. The
primary function of promotional planners is to provide information or
entertainment to their subscribers, viewers, or readers.
FALSE
The primary function of media organizations is to provide
information or entertainment to their subscribers, viewers, or readers. But
from the perspective of the promotional planner, the purpose of media is to
provide an environment for the firm’s marketing communications message.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
2. Digital/interactive
agencies and public relations firms are examples of organizations that provide
specialized marketing communication services.
TRUE
Organizations that provide specialized marketing communication
services include direct-marketing agencies, sales promotion agencies,
digital/interactive agencies, and public relations firms. These organizations
provide services in their areas of expertise.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
3. While
many people both inside and outside the organization have some input into the
advertising and promotion process, direct responsibility for administering the
program must be assumed by someone within the firm.
TRUE
While many people both inside and outside the organization have
some input into the advertising and promotion process, direct responsibility
for administering the program must be assumed by someone within the firm.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: The Steps in an Advertising Campaign
4. In
the most common example of a centralized system, the advertising or marcom
manager controls the entire promotions operation.
TRUE
In the most common example of a centralized system, the
advertising or marcom manager controls the entire promotions operation,
including budgeting, coordinating creation and production of ads, planning
media schedules, and monitoring and administering the sales promotions programs
for all the company’s products or services.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: Role of the Marketing Manager
5. An
advantage of the centralized system is that each brand receives concentrated
managerial attention, resulting in faster response to both problems and
opportunities.
FALSE
An advantage of the decentralized system is that each brand
receives concentrated managerial attention. The brand manager system is
also more flexible.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: Role of the Marketing Manager
6. Retail
giant Target has an internal creative department that handles the design of its
weekly circulars, direct-mail pieces, in-store displays, promotions, and other
marketing materials. This is an example of an in-house agency.
TRUE
An in-house agency is an advertising agency that is set up,
owned, and operated by the advertiser.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: The Steps in an Advertising Campaign
7. A
decentralized organizational system is often used when companies do not have
many different divisions, product or service lines, or brands to advertise.
FALSE
A centralized organizational system is often used when companies
do not have many different divisions, product or service lines, or brands to
advertise.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and disadvantages
of different ways to organize for advertising and promotion.
Topic: The Steps in an Advertising Campaign
8. A
disadvantage of the decentralized system is that each brand does not receive
concentrated managerial attention, resulting in slower response to both
problems and opportunities.
FALSE
An advantage of the decentralized system is that each brand
receives concentrated managerial attention, resulting in faster response to
both problems and opportunities. The brand managers have full responsibility
for the marketing program, including the identification of target markets as
well as the development of integrated marketing communications programs that
will differentiate the brand.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: The Steps in an Advertising Campaign
9. In-house
agencies are preferred by some companies because they keep the marketing
communications function more closely tied to top management.
TRUE
In-house agencies are preferred by some companies because they
keep the marketing communications function more closely tied to top management.
Another reason is the stability an in-house agency provides because external
agencies have much higher turnover levels, which can take a toll on the
client–agency relationship.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: The Steps in an Advertising Campaign
10.
Nearly two-thirds of the domestic billings are handled by 900 of
the smallest agencies in the United States.
FALSE
Nearly two-thirds of the domestic billings are handled by the
top 500 agencies. Just 10 U.S. agencies handle nearly 30 percent of the
total volume done by the top 900 agencies in the United States.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: The Role of Advertising
11.
Superagencies were formed when large advertising organizations
disintegrated to form separate, more specialized individual agencies.
FALSE
During the late 1980s and into the 1990s, the advertising
industry underwent major changes as large agencies merged with or acquired
other agencies and support organizations to form large advertising
organizations, or superagencies. These superagencies were formed so that
agencies could provide clients with integrated marketing communications
services worldwide.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: The Role of Advertising
12.
The role of account representatives is likely to disappear as
agencies and their clients are beginning to liaise directly with each other.
FALSE
Account representatives will continue to serve an important role
in managing the relationships between agencies and their clients. The account
executive is responsible for understanding the advertiser’s marketing and
promotions needs and interpreting them to agency personnel.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: The Steps in an Advertising Campaign
13.
Account planners work with the client as well as other agency
personnel, including the account executives, creative team members, research
department personnel, and media specialists.
TRUE
Account planners work with the client as well as other agency
personnel including the account executives, creative team members, media
specialists, and research department personnel to collect information that can
be helpful in gaining a better understanding of the client’s target audience
and the best ways to communicate with them.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: The Steps in an Advertising Campaign
14.
The creative services department of an agency analyzes, selects,
and contracts for space or time in the media that will be used to deliver the
client’s advertising message.
FALSE
The media department of an agency analyzes, selects, and
contracts for space or time in the media that will be used to deliver the
client’s advertising message.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: The Steps in an Advertising Campaign
15.
The layout of a print ad is known as a storyboard.
FALSE
For print ads, the art director and graphic designers prepare
layouts, which are drawings that show what the ad will look like and from which
the final artwork will be produced. For TV commercials, the layout is known as
a storyboard, a sequence of frames or panels that depict the commercial in
still form.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: The Steps in an Advertising Campaign
16.
Media buying services have found a niche by specializing in the
analysis and purchase of advertising time and space.
TRUE
Media buying services have found a niche by specializing in the
analysis and purchase of advertising time and space. The task of
purchasing advertising media has grown more complex due to the fragmentation of
media audiences and the growth of digital media.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: The Steps in an Advertising Campaign
17.
Programmatic buying has declined in recent years.
FALSE
Programmatic buying has grown, in part because of the wide range
of technologies that are automating the buying, placement, and optimization of
advertising media.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-03 Identify the types of advertising
agencies and the roles they play.
Topic: Promotion Budget
18.
Proponents of the commission system argue that the system is
more flexible than it appears as agencies often perform other services for
large clients at no extra charge.
TRUE
Proponents of the commission system argue that the system is
more flexible than it appears as agencies often perform other services for
large clients at no extra charge as a way of justifying the large commission
they receive. Critics suggest it encourages agencies to recommend
high-priced media to their clients to increase commission levels.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-04 Explain how to select, compensate, and
evaluate advertising agencies.
Topic: Promotion Budget
19.
A cost-plus system requires that the agency keep detailed
records of the costs it incurs in working on a client’s account.
TRUE
The cost-plus system requires that the agency keep detailed
records of the costs it incurs in working on the client’s account. Direct costs
(personnel time and out-of-pocket expenses) plus an allocation for overhead and
a markup for profits determine the amount the agency bills the client.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-04 Explain how to select, compensate, and
evaluate advertising agencies.
Topic: Promotion Budget
20.
The agency evaluation is often done on a subjective, informal
basis, particularly in smaller companies where ad budgets are low.
TRUE
The agency evaluation is often done on a subjective, informal
basis, particularly in smaller companies where ad budgets are low or
advertising is not seen as the most critical factor in the firm’s marketing
performance.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-04 Explain how to select, compensate, and
evaluate advertising agencies.
Topic: Role of the Marketing Manager
21.
The qualitative audit focuses on how the agency conducts its
business. It is designed to verify costs and expenses, the number of personnel
hours charged to an account, and payments to media and outside suppliers.
FALSE
The qualitative audit focuses on the agency’s efforts in
planning, developing, and implementing the client’s advertising programs and
considers the results achieved.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 03-04 Explain how to select, compensate, and
evaluate advertising agencies.
Topic: Role of the Marketing Manager
22.
Loyalty to a single agency is becoming more common as marketers
seek new ways of connecting with consumers.
FALSE
While many successful agency-client relationships go on for
years, loyalty to a single agency is becoming less common as marketers seek new
ways of connecting with consumers. In recent years, a number of long-standing
client relationships have been terminated.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-04 Explain how to select, compensate, and
evaluate advertising agencies.
Topic: Role of the Marketing Manager
23.
A typical direct-marketing agency does not include a creative
department.
FALSE
A typical direct-marketing agency is divided into three main
departments: account management, creative, and media. Some agencies also have a
department whose function is to develop and manage databases for their clients.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-05 Identify the role and functions of
specialized marketing communication organizations.
Topic: The Role of Advertising
24.
One of the more widely used collateral service organizations is
the marketing research firm.
TRUE
One of the more widely used collateral service organizations is
the marketing research firm. Companies are increasingly turning to marketing
research to help them understand their target audiences and to gather
information that will be of value in designing and evaluating their advertising
and promotions programs.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-05 Identify the role and functions of
specialized marketing communication organizations.
Topic: The Role of Advertising
25.
An agency with integrated marketing capabilities can create a
single image for the product or service and address everyone, from wholesalers
to consumers, with one voice.
TRUE
An agency with integrated marketing capabilities can create a
single image for the product or service and address everyone, from wholesalers
to consumers, with one voice. It is convenient for the client to coordinate all
of its marketing efforts—media advertising, direct mail, special events, sales
promotions, and public relations—through one agency.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-06 Compare the pros and cons of using an
integrated marketing services agency.
Topic: IMC
26.
According to marketing executives, the biggest obstacle to
implementing integrated marketing communications (IMC) is the lack of people
with the broad perspective and skills to make it work.
TRUE
Marketing executives say the biggest obstacle to implementing
IMC is the lack of people with the broad perspective and skills to make it
work. Internal turf battles, agency egos, and fear of budget reductions are
also cited as major barriers to successful integrated marketing campaigns.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-06 Compare the pros and cons of using an
integrated marketing services agency.
Topic: IMC
27.
_____ are the major participants in the integrated marketing
communications process who pay for advertising campaigns and promotions.
1. Collateral
service providers
2. Clients
3. Advertising
agencies
4. Media
organizations
5. Special
service organizations
The advertisers, or clients, are the key participants in the
integrated marketing communications process. They have the products, services,
or causes to be marketed, and they provide the funds that pay for advertising
and promotions.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
28.
Momentum Automobiles, an automobile manufacturer, hires Dreams
Inc. to cater to its advertising needs. Momentum is only required to provide
the necessary finances and does not take part in any decision making. In the
given scenario, Momentum Automobiles would be classified as a(n)
1. client.
2. illustrator.
3. full-service
agency.
4. advertising
agency.
5. media
organization.
In the above scenario, Momentum Automobiles would be classified
as a client. The advertisers, or clients, are the key participants in the
integrated marketing communications process. They have the products, services,
or causes to be marketed, and they provide the funds that pay for advertising
and promotions.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
29.
In the ad agency industry, clients refer to
1. an
advertiser or organization that has the product, service, or cause that needs
to be marketed.
2. the
media, which plays a crucial role in the process of marketing communication.
3. a
purchaser of the consumer product advertised.
4. a
market for business or consumer products.
5. an
advertising agency that specializes in the creation of the communications
message.
The advertisers, or clients, are the key participants in the
integrated marketing communications process. They have the products, services,
or causes to be marketed, and they provide the funds that pay for advertising
and promotions.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
30.
A(n) _____ is an outside firm that specializes in the creation,
production, and/or placement of the communications message and that may provide
other marketing and promotions-related services.
1. media
organization
2. sales
promotion firm
3. research
organization
4. advertising
agency
5. creative
boutique
Many organizations use an advertising agency, an outside firm
that specializes in the creation, production, and/or placement of the
communications message and that may provide other services to facilitate the
marketing and promotions process.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
31.
From the perspective of a promotional planner, the primary
purpose of media is to
1. represent
the company’s senior management in negotiations with an ad agency.
2. provide
the company with strategic recommendations and analysis.
3. provide
an environment for the firm’s marketing communications message.
4. help
conduct a SWOT analysis.
5. provide
appropriate funding for all marketing activities.
Media organizations are another major participant in the
advertising and promotions process. The primary function of most media is to
provide information or entertainment to their subscribers, viewers, or readers.
But from the perspective of the promotional planner, the purpose of media is to
provide an environment for the firm’s marketing communications message.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
32.
The primary function of most media is to
1. assist
the market research organization by conducting market surveys.
2. coordinate
their activities with direct-marketing agencies.
3. provide
information and entertainment to their audience.
4. prepare
the budget for the advertising and promotion process.
5. compensate
ad agencies through a commission system.
Media organizations are another major participant in the
advertising and promotions process. The primary function of most media is to
provide information or entertainment to their subscribers, viewers, or readers.
But from the perspective of the promotional planner, the purpose of media is to
provide an environment for the firm’s marketing communications message.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
33.
Creative Networks is a major participant in the advertising and
promotion process. It attracts various companies to buy space and time with
them by providing the same at discounted rates. Creative Networks helps these
companies reach their target market effectively by communicating their message.
In this scenario, Creative Networks is a(n)
1. advertiser.
2. collateral
service provider.
3. media
organization.
4. creative
boutique.
5. sales
promotion agency.
In the above scenario, Creative Networks is a media
organization. Media organizations are a major participant in the advertising
and promotions process. The media must have editorial or program content that
attracts consumers so that advertisers and their agencies will want to buy time
or space with them. While the media perform many other functions that help
advertisers understand their markets and their customers, a medium’s primary
objective is to sell itself as a way for companies to reach their target
markets with their messages effectively.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: The Steps in an Advertising Campaign
34.
With respect to the major participants in the advertising and
promotions process, which of the following participants include sales promotion
agencies, digital/interactive agencies, and public relations firms?
1. advertising
agencies
2. media
organizations
3. collateral
service agencies
4. specialized
marketing communications services agencies
5. bait-and-switch
marketing service agencies
Organizations that provide specialized marketing communications
services are one of the major participants in the advertising and promotions
process. Specialized marketing communications services include direct-marketing
agencies, sales promotion agencies, digital/interactive agencies, and public
relations firms.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: IMC
35.
Basic functions of the manager and staff in advertising and marketing
communications include all of the following
1. administration
and execution.
2. coordination
with other departments.
3. preparing
materials for the sales force.
4. managing
the sales force.
5. coordination
with outside agencies and services.
The advertising department may be responsible for preparing
materials the sales force can use when calling on customers, but it does not
manage the sales force.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: The Steps in an Advertising Campaign
36.
In companies that follow a centralized organizational system,
who among the following is likely to be given the title “marketing
communications manager”?
1. art
director
2. brand
manager
3. advertising
manager
4. product
manager
5. copywriter
In some companies that follow a centralized organizational
system, an advertising manager is also given the title marketing communications
manager. The advertising manager is responsible for all promotions activities
except sales.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: Role of the Marketing Manager
37.
Which of the following statements is true about the role of top
management in the advertising and promotion decision-making process?
1. The
top management’s day-to-day responsibilities usually include decision making
and operations of advertising and promotion.
2. The
top management does not provide input in the advertising and promotion process.
3. The
top management is usually interested in how the advertising program represents
the organization.
4. The
top management is only interested in the amount of money that must be allocated
to advertising and promotion.
5. The
top management is more interested in tactical planning than strategic planning.
Top management is usually interested in how the advertising
program represents the firm, and this may also mean being involved in
advertising decisions even when the decisions are not part of its day-to-day
responsibilities.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 03-01 Describe how companies organize for
advertising and integrated marketing communications functions.
Topic: Role of the Marketing Manager
38.
Under a centralized organizational system, the responsibility
for planning and controlling the advertising and promotional functions lies
with the
1. brand
manager.
2. marketing
communications manager.
3. product
manager.
4. art
director.
5. account
planning supervisor.
In a centralized system, the advertising manager controls the
entire promotions operation, including budgeting, coordinating creation and
production of ads, planning media schedules, and monitoring and administering
the sales promotions programs for all the company’s products or services. In
some companies this individual has the title of marketing communications
manager.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: Role of the Marketing Manager
39.
Which of the following is true of the role of an advertising
manager, under a centralized management system?
1. It
includes budgeting and planning media schedule.
2. It
primarily involves checking the accuracy of financial reports and records.
3. It
includes employee compensation management.
4. It
involves administering the firm’s sales and sales promotion programs.
5. It
ensures that day-to-day sales targets are met.
In a centralized system, the advertising manager is responsible
for all promotional activities except sales. The advertising manager controls
the entire promotions operation, including budgeting, coordinating creation and
production of ads, planning media schedules, and monitoring and administering
the sales promotions programs for all the company’s products or services.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: Role of the Marketing Manager
40.
Which of the following is true about the functions of the advertising
manager in a centralized system?
1. The
advertising manager is responsible for all sales and sales management
activities.
2. The
advertising manager has the final say in determining the sales forecasts.
3. The
role of an advertising manager is similar to the role of an art director in a
decentralized organization.
4. The
advertising manager controls the entire promotions operation.
5. The
advertising manager does not deal with planning and budgeting.
The advertising manager is responsible for all promotions
activities except sales. The specific duties of the advertising or marketing
communications manager depend on the size of the firm and the importance it
places on promotional programs.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: Role of the Marketing Manager
41.
In a centralized organizational structure, the _____ department
is responsible for developing promotional plans that will be approved by
management and recommending a promotions program based on the overall marketing
plan, objectives, and budget.
1. production
2. finance
3. auditing
4. advertising
5. product
planning
In a centralized organizational structure, the advertising
department is responsible for developing advertising and promotions plans that
will be approved by management and recommending a promotions program based on
the overall marketing plan, objectives, and budget.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: The Steps in an Advertising Campaign
42.
A company often uses a centralized organizational system when
1. it
has many different divisions within the company.
2. it
does not want to involve the top management in the decision-making process.
3. it
does not have many product lines or brands to advertise.
4. it
wants to involve a large number of people in making program decisions.
5. it
wants to have a category management system in place.
A centralized organizational system is often used when companies
do not have many different divisions, product or service lines, or brands to
advertise. Many companies prefer a centralized advertising department because
developing and coordinating advertising programs from one central location
facilitates communication regarding the promotions program, making it easier
for top management to participate in decision making.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: The Steps in an Advertising Campaign
43.
Which of the following differentiates a centralized organization
from a decentralized organization?
1. In a
centralized organization, the advertising manager is responsible for all
promotions activities including sales, whereas in a decentralized organization,
the advertising manager is responsible for all promotions activities except
sales.
2. A
centralized organizational system is used in large companies with more than
1,000 employees, whereas a decentralized organizational system is used only in
smaller companies with no more than 500 employees.
3. In a
centralized organization, an advertising manager controls the entire promotions
operation for all the products of a company, whereas in a decentralized
organization, each product is assigned to a different brand manager.
4. A
centralized organizational structure includes a category management system,
whereas a decentralized organizational structure does not include one.
5. In a
centralized organization, the efforts of all the brand managers are coordinated
by the category managers, whereas in a
decentralized organization, the efforts of all the brand
managers are coordinated by the advertising managers.
In a centralized system, the advertising manager controls the
entire promotions operation, including budgeting, coordinating creation and
production of ads, planning media schedules, and monitoring and administering
the sales promotions programs for all the company’s products or services. In a
decentralized organization, each brand is assigned to a brand manager who is
responsible for the total management of that brand, including planning,
budgeting, sales, and profit performance.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 03-02 Compare the advantages and
disadvantages of different ways to organize for advertising and promotion.
Topic: The Steps in an Advertising Campaign
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