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Unformatted text preview: of dollars, relative to sales, on
There is no minimum level of exposure for
advertising to have an effect on sales.
Advertising will not stimulate economic e. growth for the industry.
The firms with large market share do not have
to advertise anymore. ANS: A
There is a saturation point for advertising.
KEY: CB&E Model Promotion OBJ: 17-1 TOP: AACSB Reflective MSC: BLOOMS Analysis 5. Which of the following explains why sales and market share begin to decrease no matter how
much is spent on advertising and sales promotion?
Inverted promotion function
Just noticeable difference (JND)
Advertising response function
The advertising response function, a phenomenon of diminishing returns for advertising and sales
promotions, helps marketers use budgets wisely.
KEY: CB&E Model Promotion OBJ: 17-1 TOP: AACSB Reflective MSC: BLOOMS Knowledge 6. The advertising response function helps marketers:
create ads that will be noticed by consumers
each time the ad runs
use their advertising budgets wisely
calculate the break-even points for each
product being advertised
determine the reach and frequency of specific
select an executional appeal appropriate to the
product being advertised
The advertising response function is a phenomenon in which spending for advertising and sales
promotion increases sales or market share up to a certain level but then produces diminishing
KEY: CB&E Model Promotion OBJ: 17-1 TOP: AACSB Reflective MSC: BLOOMS Comprehension 7. Why do companies with new brands that have a small market share tend to spend proportionately
more for advertising and sales promotions compared to those with a large market share for
existing products? a.
e. As a result of experiential marketing research
To create the appropriate level of institutional
To determine which executional appeal is the
To achieve a certain minimum level of
exposure to measurably affect purchase habits
To prevent product cannibalization ANS: D
There are two reasons why companies with new brands with small market share tend to spend
proportionately more for advertising and sales promotions compared to those with existing
products and large market share. The first reason is in response to the advertising response
function. The second reason is to create product awareness in the minds of the target audience.
KEY: CB&E Model Promotion OBJ: 17-1 TOP: AACSB Reflective MSC: BLOOMS Analysis 8. When Gillette introduced its Venus razor for women several years ago, it spent $100 million on
advertising and other promotions and successfully boosted its market share. As an advertising
consultant, you would advise Gillette to now:
double its advertising budget in order to
double its market share
maintain the current advertising budget and
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This document was uploaded on 09/29/2013.
- Fall '13