Chapter 16 - Advertising, Sales Promotion, & PR - Review

1) Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor.
2) Product advertisements focus on selling a good or service and take three major forms. They are pioneering, competitive, and reminder.
3) Product advertisements focus on selling a good or service.
4) Advertisements can take either of two primary forms: product or institutional. Product ads focus on selling a specific good or service while institutional ads primary purpose is to build goodwill or to create or maintain an image for an organization. The ad described in the question is an informational product ad, designed to inform consumers of the newest features of a specific product.
5) The primary purpose of a pioneering advertisement is to inform the target market.
6) Pioneering advertisements are used in the introductory stage of the product life cycle to tell people what the product is, what the product can do, and where the product can be found. The key objective of the pioneering ad is to inform the target market. Informative ads have been found to be interesting, convincing, and effective.
7) The primary purpose of a competitive advertisement is to persuade the target market to select the firm’s brand rather than that of a competitor.
8) Advertising that promotes a specific brand’s features and benefits is competitive. The objective of these messages is to persuade the target market to select the firm’s brand rather than that of a competitor.
9) 8) Comparative advertisements are competitive advertisements that show one brand’s strengths relative to those of competitors.
10) An increasingly common form of competitive advertising is comparative advertising, which shows one brand's strengths relative to those of the competitors. Studies indicate that comparative ads attract more attention and increase the perceived quality of the advertiser’s brand. Firms that use comparative advertising need market research to provide legal support for their claims.
11) The purpose of a reminder advertisement is to reinforce previous knowledge of a product.
12) Reminder advertising is good for products that have achieved a well-recognized position and are in the mature phase of their product life cycle. In this case, Campbell’s is a well-known, established brand in the mature phase of the product life cycle. Consumers just need to be reminded to purchase the brand.
13) Advertisements whose objective is to build goodwill or an image for an organization rather than promote a specific good or service are called institutional advertisements.
14) The objective of institutional advertisements is to build good will or an image for an organization, rather than promote a specific good or service. Often this form of advertising is used to support the public relations plan or respond to negative publicity. Four forms of institutional advertisements are often used: advocacy, pioneering institutional, compettive institutional, and reminder institutional. Alternative d is incorrect as it is not one of the four listed forms.
15) The purpose of an advocacy advertisement is to state the position of a company on an issue.
16) An ad for an international consulting firm was intended to communicate the company philosophy—that you can be big and nimble at the same time—rather than sell any one particular service provided by the company. The ad is an example of pioneering advertising.
17) The state of Florida Department of Citrus developed the “To Your Health” campaign to show the benefits of orange juice. The goal of these ads is to increase demand for orange juice as it competes with other beverages. This is an example of acompetitive institutional cadvertisement.
18) The purpose of competitive institutional advertisements is to promote the advantages of one product class over another.
19) The purpose of reminder institutional advertisements is to bring the company's name to the attention of the target market again.
20) The first step of the promotion decision process is developing the promotion program. This can be applied to advertising, so the steps in developing the advertising program are (1) identify the target audience, (2) specify the advertising objectives, (3) set the advertising budget, (4) design the advertisement, (5) select the right media (6) schedule the advertising.
21) An advertising message usually focuses on key benefits of the product that are important to the buyer.
22) The advertising message depends on the appeal used and the actual words included in the ad.
23) Most advertising messages are made up of both informational and persuasional elements. Information and persuasive content can be combined in the form of an appeal to provide a basic reason for the consumer to act. Although the marketer can use many different types of appeals, common advertising appeals include fear appeals, sex appeals, and humorous appeals.
24) Fear appeals suggest to the consumer that he or she can avoid some negative experience through the purchase and use of a product or through a change in behavior. When using fear appeals, the advertiser must be sure the appeal is strong enough to get the audience's attention and concern but not so strong it will lead them to tune out the message.
25) Sex appeals suggest to the audience that the product will increase the attractiveness of the user. Unfortunately many commercials that use sex appeals are only successful at gaining the attention of the audience, and they have little impact on how consumers think, feel, or act. Some advertising experts even argue that such appeals get in the way of successful communication by distracting the audience from the purpose of the ad.
26) Humorous appeals imply either directly or more subtly that the product is more fun or exciting than competitors’ offerings.
27) As with fear and sex appeals, the use of humor is widespread in advertising and can be found in many product categories. Unfortunately for the advertiser, humorous appeals tend to wear out quickly, eventually boring the consumer. Another problem with humorous appeals is that their effectiveness may vary across cultures if used in a global campaign.
28) When developing an advertisement, understanding the lifestyles, attitudes, and demographics of the target market is essential.
29) Advertising with an objective of creating awareness would be better matched with a magazine rather than a directory such as the Yellow Pages.
30) You might not remember who advertised during the 1990 Super Bowl, but is cost the companies $700,000 to place a 30-second ad. By 2005, the cost of placing a 30-second ad during Super Bowl XXXIX was $2.4 million. The reason for the escalating cost is the growing number of viewers.
31) Some facts about creating the advertising message: a) Copywriters are responsible for creating the text portion of the messages in advertisements, b) A high-quality 30-second TV commercial typically costs about $372,000 to produce. c) There are about 2,000 small commercial production companies in the US, and d) As companies have developed global campaigns, the need to shoot commercials in “exotic” locations has increased.
32) The means by which the advertising message is communicated to the target audience is through advertising media.
33) Television garners the largest amount of U.S. advertising expenditures at $67,791,000, followed by direct mail at $52,919,000, and newspapers at $46,614,000. The expenditures drop nearly in half for “other”, radio magazines, yellow pages, outdoor and internet.
34) Reach is defined as the number of different people or households exposed to an advertisement.
35) Rating is defined as the percentage of households in a market that are tuned to a particular television show or radio station.
36) Frequency is defined as the number of times an advertisement can be shown before it begins to lose effectiveness average number of times a person in the target audience is exposed to an advertisement.
37) Gross rating points (GRPs) are reach multiplied by frequency.
38) CPM with respect to advertising is defined as the cost of reaching 1000 individuals or households with the advertising message.
39) One of the advantages associated with television as an advertising medium is that it communicates with sight, sound and motion.
40) Program-length (30-minute) advertisements that take an educational approach to communication with potential customers are called infomercials.
41) One reason for using radio as an advertising medium is it is segmented.
42) Radio is low cost and can target specific local audiences. Radio ads can be quickly created and placed. Radio can use sound, humor, and intimacy effectively. Disadvantages include no visual element; short exposure time and perishable message; difficult to convey complex information.
43) Magazines can target specific audiences; use high-quality color. The ads have long lives; ads can be clipped and saved and can convey complex information. However, a long time is needed to place an ad; ads are relatively high cost; and compete for attention with other magazine features. Some magazines such as Time publish regional editions.
44) Newspapers are an important local medium with excellent reach potential. Because of the daily publication of most papers, they allow advertisements to focus on specific current events. Local retailers often use newspapers as their sole advertising medium. Newspapers are rarely saved by the purchaser, so companies are limited to ads that call for an immediate response. Color reproduction is not as good as that in most magazines. National advertising campaigns rarely include this medium except in conjunction with local distributors and usually both parties>
45) One reason for NOT using newspapers as an advertising medium is their short life span.
46) Yellow pages are a directional medium because they help consumers know where purchases can be made after other media have created awareness and demand.
47) A disadvantage of the Yellow Pages is the lack of timeliness.
48) Internet advertising has the following advantages: video and audio capabilities; animation can capture attention; ads can be interactive and link to advertiser. Internet advertising has the following disadvantage: effectiveness is still uncertain and difficult to measure.
49) Called rich media, these internet interactive ads have drop-down menus, built-in games, or search engines to engage viewers.
50) Billboard advertising is most effective for reminder advertising.
51) A very effective medium for reminding consumers about products is outdoor advertising, such as the scoreboards at baseball stadiums. Billboards often result in good reach and frequency and have been shown to increase purchase rates. The visibility of this medium is good supplemental reinforcement for well-known products, and it is a relatively low-cost, flexible alternative. A disadvantage is that no opportunity exists for lengthy advertising copy.
52) The most common form of outdoor advertising is billboard advertising.
53) Transit advertising is a form of outdoor advertising that includes the interior and exterior of buses, subway cars, and taxis. Transit routes can provide geographic selectivity of audiences for advertisers. One disadvantage of transit advertising is that heavy travel times often do not permit riders to read advertising copy.
54) As traditional media have become more expensive and cluttered, advertisers have been attracted to a variety of nontraditional advertising options—in airports, doctors' offices, health clubs, or theaters—called place-based media.
55) Buyer turnover is defined as how often new buyers enter the market to buy the product.
56) The definition for purchase frequency is the more frequently the product is purchased, the less repetition is required.
 58) The three approaches to setting advertising schedules are continuous (steady), flighting (intermittent), and pulse (burst).
59) Continuous schedule advertising is run at a steady or regular schedule throughout the year when demand and seasonal factors are unimportant.
60) A basic approach to scheduling, in which periods of advertising are scheduled between periods of no advertising to reflect seasonal demand is called flighting.
61) A flighting schedule combined with a continuous schedule because of increases in demand, heavy periods of promotion, or introduction of a new product is called a pulse schedule. Candy would most likely need heavier promotion before Halloween, Valentine's Day, Mother's Day, etc. in addition to the fairly continuous ads for non-seasonal candy that run throughout the year.
62) Candy however, would most likely need heavier promotion before Halloween, Valentine's Day, Mother's Day, etc. in addition to the fairly continuous ads for non-seasonal candy that run throughout the year.
63) Because advertising is expensive, marketers want to be certain the advertisements they run communicate the intended message to the target audience. In order to accomplish this communication goal, marketers conduct pretests before advertisements are placed in a medium.
64) A portfolio test places an ad in a portfolio with several other ads and stories and consumers are asked to read through the portfolio. Afterward, subjects are asked for their impressions of the ads.
65) Jury tests involve showing the ad copy to a panel of consumers and having them rate how much they liked it, how much it drew their attention, and how attractive they thought it was. This approach is similar to the portfolio test in that consumer reactions are obtained. However, unlike the portfolio test, a test advertisement is not hidden within other ads.
66) Theater testing is the most sophisticated form of pretesting. Consumers are invited to view new television shows or movies in which test commercials are also shown. Viewers register their feelings about the advertisements either on hand-held electronic recording devices used during the viewing or on questionnaires afterward.
67) A full-service agency is an advertising agency provides the most complete range of services, including market research, media selection, copy development, artwork, and production.
68) A limited-service agency is an advertising agency that specializes in one aspect of the advertising process such as providing creative services to develop advertising copy or buying previously unpurchased media space.
69) An in-house agency made up of the company’s own advertising staff may provide full services or a limited range of services.
70) Tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose are referred to as posttests.
71) Sales tests allow a manufacturer, a distributor, or an advertising agency to manipulate an advertising variable (such as schedule or copy) and observe subsequent sales effects by monitoring data collected from checkout scanners in supermarkets.
72) In an aided recall posttest, respondents are first shown an ad and then asked whether their previous exposure to it was through reading, viewing, or listening.
73) The Starch test determines the percentage of those who remember seeing a specific magazine ad, who saw or read any part of the ad identifying the product or brand, and who read at least half of the ad. It is a type of aided recall test.
74) The other name used for aided recall tests is recognition-readership testing.
75) A question such as, "What ads do you remember seeing yesterday?" is asked of respondents without any prompting to determine whether they saw or heard advertising messages when using unaided recall posttests.
76) When using attitude posttests, respondents are asked questions to measure changes in their attitudes after an advertising campaign, such as whether they have a more favorable attitude toward the product advertised.
77) With inquiry tests, additional product information, product samples, or premiums are offered to an ad's readers or viewers, and ads generating the most inquiries are presumed to be the most effective.
78) Sales tests allow a manufacturer, a distributor, or an advertising agency to manipulate an advertising variable (such as schedule or copy) and observe subsequent sales effects by monitoring data collected from checkout scanners in supermarkets.
79) Directed to ultimate consumers, consumer-oriented sales promotions, or simply consumer promotions, are sales tools used to support a company’s advertising and personal selling. The alternative consumer-oriented sales promotion tools include coupons, deals, premiums, contests, sweepstakes, samples, continuity programs, point-of-purchase displays, rebates, and product placement.
80) Coupons are sales promotions that usually offer a discounted price to the consumer, which encourages trial. The redemption rate is typically about 2 percent.
81) A deal is a sales promotion that offers a short-term price reduction, commonly used to increase trial among potential customers or to retaliate against a competitor’s actions.
82) A premium is a sales promotion that consists of offering merchandise free or at significant savings over its retail price. By offering a premium, companies encourage customers to return frequently or to use more of the product.
83) A premium is called self-liquidating when the cost charged to the consumer covers the cost of the item.
84) Contests are sales promotions in which customers apply their creative skills or analytical thinking to win a prize.
85) Sweepstakes are sales promotions that require participants to submit some kind of entry form but are purely games of chance requiring no analytical or creative effort by the consumer.
86) Sampling is a common consumer sales promotion which offers the product free or at a greatly reduced price. Often used for new products, sampling puts the product in the consumer’s hands. A trial size is generally offered that is smaller than the regular package size.
87) Sampling is an appropriate strategy for products which are in the introductory stage of the product life cycle.
88) Loyalty programs are a sales promotion tool used to encourage and reward repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate.
89) A sales promotion that takes the form of an advertising sign, which sometimes actually holds or displays the product, and which is often located in high-traffic areas near the cash register or the end of an aisle are called point-of-purchase displays.
90) Rebates are sales promotions in which money is returned to the customers based on proof of purchase. When the rebate is offered on lower-priced items, the time and trouble of mailing in a proof of purchase to get the rebate check often means that many buyers never take advantage of it.
91) The consumer promotion that involves the use of a brand-name product in a movie, television show, video, or a commercial for another product is called product.
92) Trade-oriented sales promotions, or simply trade promotions, are sales tools used to support a company’s advertising and personal selling directed to wholesalers, retailers, or distributors. There are three common approaches targeted uniquely to intermediaries: (1) allowances and discounts, (2) cooperative advertising, and (3) training of distributors’ sales forces.
93) A merchandise allowance reimburses a retailer for extra in-store support or special featuring of a brand.
94) A case allowance is a discount on each case of goods ordered during a specific period of time.
95) A finance allowance involves paying retailers for financing costs or financial losses associated with consumer sales promotions.
96) Cooperative advertising are programs in which a manufacturer pays a percentage of a retailer's local advertising expense for advertising the manufacturer's products.
97) One of the many functions the intermediaries perform is customer contact and selling for the producers they represent. Both retailers and wholesalers employ and manage their own sales personnel. A manufacturer’s success often rests on the ability of the reseller’s sales force to represent its products. It is in the best interest of the manufacturer to help train the reseller’s sales force. Because the reseller’s sales force is often less sophisticated and knowledgeable about the products than the manufacturer might like, training can increase their sales performance. Training activities include producing manuals and brochures to educate the reseller’s sales force. The sales force then uses these aids in selling situations.
98) Publicity tools are methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost.
99) A news release consists of an announcement regarding changes in the company or the product line.
100) A publicity tool that is heavily relied on by nonprofit organizations, and which involves free space or time donated by the media is called a public service announcemant.

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