Name: Advertising And Integrated Brand Promotion 6th Edition By Thomas O'Guinn - Test Bank - Eazyquizes
Price: 25.00 USD
Availability: InStock

Description

Advertising And Integrated Brand Promotion 6th Edition By Thomas O’Guinn – Test Bank

Sample Questions

Instant Download With Answers

Chapter 2 – The Structure of the Advertising and Promotion Industry: Advertisers, Agencies, Media, and Support Organizations

TRUE/FALSE

Overall, media fragmentation is a big plus for consumers but a big headache for advertisers and agencies.

ANS: T DIF: Easy REF: p. 45 OBJ: 2-Intro

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Comprehension

One or more of the major business and societal forces—technological advances, economic conditions, cultures, lifestyles, business philosophies, etc.—are always affecting advertising and promotion efforts.

ANS: T DIF: Easy REF: p. 46 OBJ: 2-Intro

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Comprehension

Social media come in highly accessible forms, allowing individuals and groups to share almost unlimited textual and visual information.

ANS: T DIF: Easy REF: p. 47 OBJ: 2-1

NAT: AACSB Communication | CB&C Model Customer TYP: Comprehension

Once considered amateurish and unsophisticated, blogs have begun to gain respect, now numbering about 133 million, with almost 350 million people around the world visiting them.

ANS: T DIF: Moderate REF: p. 47 OBJ: 2-1

NAT: AACSB Communication | CB&C Model Customer TYP: Comprehension

Now more than ever, advertisers are in greater control of the information they disseminate, and the way it is delivered, regarding product categories and the brands within those categories.

ANS: F DIF: Easy REF: p. 48 OBJ: 2-1

NAT: AACSB Communication | CB&C Model Customer TYP: Comprehension

Despite the explosion of new media in recent years—cable television stations, direct marketing technologies, Web options, digital and mobile alternatives—today’s media options are actually reduced from those of past decades.

ANS: F DIF: Moderate REF: p. 48 OBJ: 2-1

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Comprehension

Even in the face of new communication formats such as online, branded¸ and sponsorship options, today’s companies are putting more faith and energy back into traditional advertising formats placed in mainstream media.

ANS: F DIF: Moderate REF: p. 48-49 OBJ: 2-1

NAT: AACSB Communication | CB&C Model Strategy TYP: Comprehension

The industry’s media and agencies seem to be consolidating into fewer and fewer large firms, thus, there are fewer media options.

ANS: F DIF: Difficult REF: p. 49 OBJ: 2-1

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Comprehension

Given the backlash against advertising that clutter can cause, advertisers and their agencies are integrating more tools within the overall promotional effort to try and reach more consumers in different ways.

ANS: T DIF: Moderate REF: p. 49 OBJ: 2-1

NAT: AACSB Communication | CB&C Model Creativity TYP: Comprehension

Spending on all forms of integrated brand promotion, including advertising, now exceeds a trillion dollars a year.

ANS: T DIF: Moderate REF: p. 52 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Among the twenty largest advertisers in the United States in 2008, eleven actually showed a decrease in overall advertising spending.

ANS: T DIF: Moderate REF: p. 52 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

In 2009, spending on integrated brand promotion tools other than advertising totaled nearly $100 billion annually across all forms of promotion.

ANS: T DIF: Moderate REF: p. 52-53 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

Just about all types of organizations, regardless of industry, product, service, or message, tend to use advertising and promotion in the same ways.

ANS: F DIF: Moderate REF: p. 54 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

Scott and Mark hear a local radio spot for McDonald’s as they begin driving on an interstate highway one morning. Later they see a billboard for McDonald’s, so they pull over at the next exit and have lunch there. In these ways, McDonald’s acts as a large local reseller that uses various promotion efforts to communicate with customers on a local basis.

ANS: F DIF: Moderate REF: p. 56 OBJ: 2-2

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Application

The majority of service firms, governments, social organizations, and agencies cannot afford to participate in today’s advertising process.

ANS: F DIF: Moderate REF: p. 56-57 OBJ: 2-2

NAT: AACSB Diversity | CB&C Model Promotion TYP: Comprehension

It is common for social organizations to advertise at the national, state, and local levels.

ANS: T DIF: Moderate REF: p. 57 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

While many full-service agencies have depended on giant accounts, some have managed to build a stable base of international clients by acquiring and grooming one smaller or midsize account at a time.

ANS: T DIF: Moderate REF: p. 59 OBJ: 2-3

NAT: AACSB Communication | CB&C Model International Perspective

TYP: Comprehension

Creative boutiques are often referred to as “idea factories.”

ANS: T DIF: Moderate REF: p. 60 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

Digital/interactive agencies are those that have expertise in preparing communications for new media, such as the Internet, mobile marketing, and interactive television.

ANS: T DIF: Easy REF: p. 60 OBJ: 2-3

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Knowledge

The reason prominent advertisers like Benetton, Calvin Klein, and Revlon do most of their work in-house is to maintain control over marketing activities such as product development and distribution tactics.

ANS: T DIF: Moderate REF: p. 61 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Product/Distribution

TYP: Application

Media specialists can typically acquire media time and space at lower costs than an agency can.

ANS: T DIF: Moderate REF: p. 62 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Comprehension

A marketer for a large corporation often turns to a media specialist, especially when time is short. This is because media specialists often have time and space in inventory and can offer last-minute placement to advertisers.

ANS: T DIF: Difficult REF: p. 62 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Strategy TYP: Application

Firms that maintain and manage large databases of mailing lists as one of their services are alternatively referred to as direct marketing agencies, database agencies, or direct response agencies.

ANS: T DIF: Moderate REF: p. 62 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

A graphic mark that identifies a company, and often a brand, is called a logo.

ANS: T DIF: Easy REF: p. 63 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Today’s media planners and buyers often examine an enormous number of options to put together an effective media plan within a client’s budget.

ANS: T DIF: Moderate REF: p. 66 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Strategy TYP: Comprehension

Most large agencies, such as Omnicom, Chiat/Day, and Fallon McElligott, set up digital/interactive media groups only recently in response to the sudden surge of client demands that Internet and mobile media options be included in nearly every IBP plan.

ANS: F DIF: Difficult REF: p. 66-67 OBJ: 2-3

NAT: AACSB Technology | CB&C Model Strategy TYP: Application

The four most prevalent agency compensation methods are commission, consultant, external facilitator, and production facilitator plans.

ANS: F DIF: Moderate REF: p. 67 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Knowledge

Changes in consumer media use over the past two decades, and particularly in the past five years, have made both advertisers and agencies question the wisdom of using the commission system.

ANS: T DIF: Difficult REF: p. 67-68 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Pricing TYP: Comprehension

Procter and Gamble’s global marketing officer identified the basis for compensation change when he declared that the media-based model dependent on the 30-second TV spot was “broken.”

ANS: T DIF: Difficult REF: p. 68 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Pricing TYP: Comprehension

A fee system is much like that used by consultants or attorneys, whereby the advertiser and the agency agree on an hourly rate for different services provided.

ANS: T DIF: Easy REF: p. 68 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Knowledge

The most popular form of agency compensation used today is the markup charge.

ANS: F DIF: Easy REF: p. 68 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Knowledge

MULTIPLE CHOICE

Collectively, millions of individuals are continually creating and sharing content through blogs, social media, wikis, and video sites. What is the term for this phenomenon?

a.	Internet facilitation
b.	crowdsourcing
c.	Web 2.0
d.	digital/interactive production

ANS: C DIF: Moderate REF: p. 47 OBJ: 2-1

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Comprehension

What type of digital media has emerged as the most significant form of consumer control over information creation and communication?

a.	Web advertising
b.	social media
c.	interactive television
d.	mobile marketing

ANS: B DIF: Moderate REF: p. 47 OBJ: 2-1

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Comprehension

Websites frequented by individuals with common interests where they can post facts, opinions, and personal experiences have emerged as sophisticated sources of product and brand information. This definition refers to

a.	spam.
b.	blogs.
c.	phishing.
d.	chat rooms.

ANS: B DIF: Moderate REF: p. 47 OBJ: 2-1

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Knowledge

Research shows that compared to traditional marketing efforts, ___ communication between consumers is more meaningful and results in longer lasting impressions that affect buying behavior.

a.	word-of-mouth
b.	social network
c.	online
d.	mobile

ANS: A DIF: Moderate REF: p. 47 OBJ: 2-1

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Knowledge

Which company has become a media conglomerate on the Web, amassing its own digital empire of diverse Internet sites?

a.	ABC Broadcasting Network
b.	Facebook
c.	Dell
d.	InterActiveCorp

ANS: D DIF: Difficult REF: p. 48 OBJ: 2-1

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Knowledge

With media clutter and fragmentation, there are

a.	many more options and players in the industry.
b.	more receptive consumers than ever before.
c.	less and less media choices available to advertisers.
d.	opportunities for accreditation of advertising agency principals.

ANS: A DIF: Difficult REF: p. 49 OBJ: 2-1

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

What contemporary technique is used by organizations specifically to get consumers involved with and committed to brands, much more than passive advertising every could?

a.	Web 2.0
b.	trade reselling
c.	crowdsourcing
d.	event planning

ANS: C DIF: Moderate REF: p. 50 OBJ: 2-1

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Yearly spending on all forms of integrated brand promotion, including advertising, now exceeds

a.	$25 billion.
b.	$50 billion.
c.	$200 billion.
d.	$1 trillion.

ANS: D DIF: Moderate REF: p. 50 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Advertising is a major business in the United States. One indication of this is the fact that

a.	the United States spends more than $300 billion a year on advertising.
b.	advertising in the United States is subject to the fewest government restrictions of any country in the world.
c.	advertising agencies do not have to actively compete to get business.
d.	only agencies in the United States are financially capable of offering a complete range of advertising services.

ANS: A DIF: Moderate REF: p. 52 OBJ: 2-2

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Comprehension

There are many types of advertisers in the marketplace today. But which of the following would not be classified as an advertiser?

a.	the U.S. Army
b.	the city of Las Vegas
c.	the American Cancer Society
d.	the IRS Audit Department

ANS: D DIF: Moderate REF: p. 54 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

The largest manufacturers of consumer products and services in the United States have one thing in common. They all

a.	use advertising better than small manufacturers.
b.	are resellers of products.
c.	engage in global advertising.
d.	are the most prominent users of advertising and promotion.

ANS: D DIF: Moderate REF: p. 54-55 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

Who are today’s most visible reseller advertisers and promoters?

a.	wholesalers that deal with household goods
b.	retailers that sell in national or global markets
c.	transportation companies that work internationally
d.	industrial organizations that supply the construction industry

ANS: B DIF: Moderate REF: p. 56 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

The United States federal government spends more than $2 billion annually on advertising and promotion. Most of that money is spent in what two areas?

a.	lottery advertising and armed forces recruitment
b.	campaign advertising and armed forces recruitment
c.	armed forces recruiting and social issues
d.	social issue advertising and political campaign advertising

ANS: C DIF: Moderate REF: p. 56-57 OBJ: 2-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

In order to meet all the promotional needs of its clients, the owners of Barlow & Baley advertising agency have decided to add public relations and media buying to the creative services it offers clients. What kind of agency will it become?

a.	full-service
b.	large
c.	creative boutique
d.	promotion

ANS: A DIF: Moderate REF: p. 59 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

The owners of Bud’s Greenery, a small local chain of five garden and floral supply stores, handle most of their own marketing and promotion services. All they want from an outside agency is a lot of ideas to choose from, not a lot of services that they can handle themselves. Therefore, they are in need of a

a.	consultation firm.
b.	creative boutique.
c.	digital/interactive agency.
d.	full-service agency.

ANS: B DIF: Moderate REF: p. 59-60 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

There are many types of external facilitators in the advertising community. ____ help advertisers prepare communications for new media such as the Internet, mobile marketing and interactive television.

a.	Digital/interactive agencies
b.	Production facilitators
c.	Advertising research firms
d.	Communication organizations

ANS: A DIF: Moderate REF: p. 60 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

What is often called the advertising department within the firm?

a.	the creative boutique
b.	the digital/interactive firm
c.	the media-buying department
d.	the in-house agency

ANS: D DIF: Easy REF: p. 61 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Which entity acts as support for direct marketing agencies and follow-up for the delivery of their direct mail?

a.	creative boutiques
b.	in-house agencies
c.	pay-for-results systems
d.	fulfillment centers

ANS: D DIF: Easy REF: p. 62 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

What is the world’s largest list management and list brokerage firm?

a.	Starcom MediaVest Group
b.	Direct Media, Inc.
c.	Leo Burnett
d.	TheFutureBuzz.com

ANS: B DIF: Moderate REF: p. 62 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Which company is involved with listing and cataloguing producers of infomercials from around the world?

a.	InterActiveCorp
b.	Omnicom
c.	BBDO Worldwide
d.	AdProducers.com

ANS: D DIF: Moderate REF: p. 62 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Agencies that specialize in ____ are experts in designing incentive programs, trade shows, sale forces contests, and in-store merchandising.

a.	direct marketing
b.	trade-market sales promotions
c.	direct response advertising
d.	consumer sales promotions

ANS: B DIF: Moderate REF: p. 62-63 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

What kind of firm acts as an expert in finding locations, securing dates, scheduling activities, and pulling together teams of facilities managers, caterers, security people, entertainers, and celebrities?

a.	an event-planning agency
b.	a sales promotion agency
c.	a direct marketing agency
d.	a design firm

ANS: A DIF: Easy REF: p. 63 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

According to the text, which marketing professionals don’t get enough credit for their part in today’s advertising and promotion process?

a.	agency owners and consultants
b.	media planners and account services executives
c.	designers and graphics specialists
d.	e-commerce experts and Web masters

ANS: C DIF: Moderate REF: p. 63 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Why has TBWA of the Omnicom Group created a new position called Chief Compensation Officer?

a.	because so many of its clients are facing bankruptcy
b.	because its traditional commission is not being paid
c.	because financial talks between clients and agency aren’t working
d.	because TBWA is facing bankruptcy

ANS: C DIF: Difficult REF: p. 65 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

One advertiser needs to get its message out to a number of diverse communities within the U.S. Another advertiser wants to reach populations in diverse nations across the three continents where its product is sold. Which person in the advertising agency will work with both of these clients to translate cultural and consumer values into advertising messages?

a.	media services director
b.	director of production
c.	account services manager
d.	administrative executive

ANS: C DIF: Moderate REF: p. 65 OBJ: 2-3

NAT: AACSB Communication | CB&C Model International Perspective

TYP: Knowledge

Which person in a marketing research group coordinates the research effort, and is on par with an account executive?

a.	graphics designer
b.	event planner
c.	account planner
d.	media buyer

ANS: C DIF: Moderate REF: p. 65 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

What kind of groups are responsible for coming up with the concepts that express the benefits of a brand?

a.	creative and production services
b.	direct-marketing departments
c.	account services
d.	marketing research departments

ANS: A DIF: Easy REF: p. 66 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

The ____ services department of an advertising agency typically houses its art directors, illustrators, and copywriters.

a.	creative
b.	account
c.	marketing
d.	production

ANS: A DIF: Easy REF: p. 66 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

What type of firm or group takes creative ideas and turns them into actual ads?

a.	marketing research services
b.	creative services
c.	account services
d.	production services

ANS: D DIF: Easy REF: p. 66 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

Though many agencies no longer use the traditional commission system for compensation, Starr Agency does. Using the standard percentage rate, how much would Starr Agency receive from billing $500,000 of television airtime?

a.	$150,00
b.	$125,000
c.	$100,000
d.	$75,000

ANS: D DIF: Moderate REF: p. 67 OBJ: 2-3

NAT: AACSB Analytic | CB&C Model Pricing TYP: Application

One method of agency compensation has been accused of encouraging advertising agencies to recommend only the most costly media vehicles available. This method is the _____ system.

a.	commission
b.	fee
c.	retainer
d.	markup charge

ANS: A DIF: Moderate REF: p. 67-68 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Comprehension

A Los Angeles agency uses a compensation system much like that used by consultants or attorneys to bill clients. This agency is using a ____ system.

a.	fee
b.	commission
c.	markup charge
d.	media commission

ANS: A DIF: Easy REF: p. 68 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Application

Which type of compensation system became popular in the advertising industry due to all the outside facilitators that were being used?

a.	markup
b.	fee
c.	pay-for-results
d.	commission

ANS: A DIF: Easy REF: p. 68 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Knowledge

Harper, Kane, and Charles advertising agency sets an hourly rate for its services, based on the average salary of all the members of a particular department. Harper, Kane, and Charles uses the ____ system.

a.	commission
b.	fixed-fee
c.	markup charge
d.	fee

ANS: D DIF: Moderate REF: p. 68 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Application

A small Midwest agency agrees to a fixed fee, or contract, with a new client. What is the downside for an agency like this when it uses the fixed-fee system?

a.	Most clients do not want to pay a flat 15 percent rate for all ads placed.
b.	Standard percentage rates to be charged keep dropping.
c.	Client and agency rarely agree on a fee without hard feelings or conflicts.
d.	More work may be needed than is originally predicted.

ANS: D DIF: Moderate REF: p. 68 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Application

Ad agencies have recently developed compensation programs that are based upon achievement of specific objectives for the client. These programs are known as ____ compensation.

a.	pay-for-results
b.	markup
c.	commission
d.	fee-based

ANS: A DIF: Moderate REF: p. 68-69 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Comprehension

Kowalski and Associates has been a successful mid-sized, full-service advertising agency for more than two decades. In an attempt to serve its clients more efficiently in a competitive marketplace, the agency has changed its compensation package to include payment based on results. If the client agrees, Kowalski and Associates will likely be evaluated on increases in

a.	sales as well as brand awareness and identification.
b.	market share.
c.	positive consumer attitudes toward brand.
d.	fees following market performance measures.

ANS: A DIF: Moderate REF: p. 68-69 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Pricing TYP: Application

McMann and Young advertising agency has been hired by Broadway Bicycles, Inc. to assist with advertising and promotions for a chain of bicycle stores in Vermont. The agency has agreed that a certain level of awareness and interest in Broadway Bicycles will be generated in order to gain the sales results the company desires, and they have agreed to be paid accordingly. This is called

a.	amortization.
b.	a retainer.
c.	cost plus.
d.	pay-for-results compensation.

ANS: D DIF: Difficult REF: p. 68-69 OBJ: 2-3

NAT: AACSB Analytic | CB&C Model Pricing TYP: Application

A regional fast food chain called Platters is interested in opening a new type of casual dining facility in a new market, called Diners. What type of firm might collect the data needed to expand into the new market?

a.	a marketing or advertising research firm because it acts as a facilitator
b.	an advertising agency because it is imaginative
c.	the advertiser because they know the product best
d.	media organizations because they have large datasets available

ANS: A DIF: Moderate REF: p. 69-70 OBJ: 2-4

NAT: AACSB Analytic | CB&C Model Research TYP: Application

A large agency in Minneapolis hires a number of external facilitators to complete specific aspects of its projects. Which of the following is not an external facilitator in the structure of the advertising industry?

a.	television network
b.	advertising research firm
c.	production facilitator
d.	software firm

ANS: A DIF: Moderate REF: p. 69-71 OBJ: 2-4

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

An advertising agency hires Starch INRA Hooper to act as an external facilitator. Most likely, Starch INRA Hooper will be asked to

a.	run recognition tests on print advertising.
b.	aid the agency in the production process.
c.	examine the agency’s billing structure for inefficiencies.
d.	oversee the agency’s IBP efforts.

ANS: A DIF: Difficult REF: p. 70 OBJ: 2-4

NAT: AACSB Analytic | CB&C Model Strategy TYP: Application

Ocean Waves Resorts wants to purchase land and construct a resort hotel on the shorefront in San Clemente next to the Nixon retreat. Ocean Waves would also like to construct a golf course on the property and needs help with understanding local regulations, zoning restrictions, and especially political relationships. What kind of company should Ocean Waves hire to assist with the project?

a.	a consulting firm
b.	a creative boutique
c.	a sports marketing company
d.	a wholesale company

ANS: A DIF: Moderate REF: p. 70 OBJ: 2-4

NAT: AACSB Analytic | CB&C Model Strategy TYP: Application

What is a new type of consultant who gathers and analyzes information, cross-references and merges it, working with both advertisers and agencies to develop effective communications?

a.	database consultant
b.	financial consultant
c.	brand consultant
d.	Web developer and consultant

ANS: A DIF: Moderate REF: p. 70 OBJ: 2-4

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

In which area do both advertisers and their agencies rely the most on external facilitators?

a.	consumer research
b.	media buying
c.	software incorporation
d.	production processes

ANS: D DIF: Moderate REF: p. 71 OBJ: 2-4

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

For what type of tasks do today’s advertisers and agencies rely on external facilitators the most?

a.	production
b.	research
c.	management
d.	accounting

ANS: A DIF: Moderate REF: p. 71 OBJ: 2-4

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

The high-speed technology that allows consumers to customize programming from various providers over the Internet and target very specific audiences

a.	is an example of scattering.
b.	is an example of the halo effort.
c.	is known as broadband.
d.	forbids localization of a master network.

ANS: C DIF: Easy REF: p. 73 OBJ: 2-5

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Knowledge

Which of the following is an interactive broadband television news network that allows Web users to customize their news broadcasts to their personal preference?

a.	BurkeandSimmons
b.	BusinessObjects
c.	The FeedRoom
d.	SRI

ANS: C DIF: Difficult REF: p. 73 OBJ: 2-5

NAT: AACSB Technology | CB&C Customer TYP: Knowledge

What corporation is one of the world’s largest media conglomerates, one that offers broadcasting, film, music, cable, print, publishing, and a large Internet presence?

a.	News Corp
b.	Fox
c.	Sony
d.	Time Warner

ANS: D DIF: Difficult REF: p. 73 OBJ: 2-5

NAT: AACSB Technology | CB&C Model Promotion TYP: Knowledge

Often referred to as out-of-home media, support media organizations do not include

a.	bus and taxi boards.
b.	databases.
c.	performance arenas for sponsorships.
d.	specialized directory companies.

ANS: B DIF: Moderate REF: p. 73 OBJ: 2-5

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

Which of the following is true of organizations whose audiences are primarily non-consumer business and government audiences?

a.	Many use a variety of advertising and IBP tools.
b.	Few rely on public relations to maintain their brand images.
c.	They do not use personal selling to further their business goals.
d.	They rely primarily on business journals written for their industries.

ANS: A DIF: Moderate REF: p. 73 OBJ: 2-5

NAT: AACSB Communication | CB&C Model Customer TYP: Comprehension

A local group called Gimme Shelter erects a billboard urging people to assist in the group’s struggle to find shelter for the homeless. The same day, a producer of women’s sportswear called GameOn launches a multi-million dollar ad campaign announcing that it will be sponsoring women’s international soccer events held in North America, South America, and Europe. Which statement regarding these two efforts is true?

a.	Gimme Shelter must be concerned with media clutter, but GameOn need not worry about it.
b.	GameOn is running corporate advertising, while Gimme Shelter is running brand advertising.
c.	Both groups are using out-of-home media, the first on a local level and the second on a global level.
d.	Both groups have narrowly defined target audiences.

ANS: C DIF: Difficult REF: p. 73 OBJ: 2-5

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

Scenario 2-1

As one of the world’s largest computer and technology developers, Dell, Inc. has never been a stranger to advertising. However, due to a consistent decline in market share, the Texas-based company is looking to overhaul its advertising efforts for the first time in years. In the past, Dell found success promoting its products as some of the top “inexpensive” computer products on the market. However, the company’s new ad campaign, which will be targeted towards more high-end users, will make no mention of product price. The company is looking to reinvent its image, and believes the first step in doing so is to revamp its outdated advertising campaign.

(Scenario 2-1) Dell decides not to use a full-service advertising agency because it would like its own employees to take responsibility for the new ad campaign. Still, full-service agencies do provide a number of advantages—one of these advantages is

a.	full-service agencies are often expensive, and spending a lot of money on advertising impresses consumers.
b.	full-service agencies are very large, so there are lots of people to help design ad campaign.
c.	full-service agencies often have an array of talented professionals to meet all the needs of a client.
d.	full-service agencies are the only way to create an ad campaign that implements integrated brand promotion.

ANS: C DIF: Moderate REF: p. 59 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-1) In order to reinvent the company’s image, Dell formulates a team in its marketing department that will be responsible for every aspect of the advertising campaign. The company decides that using company employees will allow it to maximize the profits generated from the new campaign. This team will be an example of

a.	an interactive agency.
b.	a full service advertising agency.
c.	a public relations firm.
d.	an in-house agency.

ANS: D DIF: Difficult REF: p. 61 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-1) In recent years, Dell has struggled to compete with companies such as HP and Apple. To generate interest in its new line of computers, Dell hires a company to design a number of contests and incentive programs that will help build excitement for the new line. This company is likely an example of a(n)

a.	direct marketing agency.
b.	e-commerce agency.
c.	sales promotion agency.
d.	marketing research firm.

ANS: C DIF: Moderate REF: p. 62 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-1) Dell realizes that changing its company image will be a difficult task. To help the process along, the company realizes it will need to begin reaching out to consumers more, and will also need to improve its relationships with the media and various competitors. The type of agency that will be responsible for improving these relationships will most likely be a

a.	public relations firm.
b.	digital/interactive agency.
c.	creative boutique.
d.	database agency.

ANS: A DIF: Difficult REF: p. 63 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

Scenario 2-2

Brush Strokes is an art supply store located in a town with a population of about 100,000 people. The town is also home to a major state university. Brush Strokes gets a majority of its business from the student population. It has used the services of a local full-service advertising agency in the past. A great majority of its marketing budget has gone toward running small advertisements in the local and school newspapers at the beginning of each term. The advertising agency is now recommending that Brush Strokes devote a majority of its budget to running television spots during broadcasts of the university’s football and basketball games. While the owners of Brush Strokes agree that they could be doing a better job of reaching a larger portion of the student population, they have not come to any conclusions about the best way to accomplish this.

(Scenario 2-2) In all likelihood, with which one of the following would Brush Strokes’s full-service agency be least qualified to handle?

a.	interpreting research on the student market
b.	creating a 30-second television commercial
c.	forecasting dividend earnings of stockholders
d.	creating a competitive position against other art supply stores

ANS: C DIF: Easy REF: p. 58-62 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-2) The owners of Brush Strokes have called a meeting with their agency to determine how Brush Strokes can benefit best from its advertising. The one agency department that must be represented at this meeting to help identify the benefits of the brand, its target audience, the best competitive positioning and then develop a complete plan is

a.	media-planning.
b.	research.
c.	account services.
d.	creative services.

ANS: C DIF: Moderate REF: p. 65 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Marketing Plan

TYP: Application

(Scenario 2-2) The owners of Brush Strokes are concerned that their agency may be recommending television advertising because it would be profitable for the agency. To protect against this, Brush Strokes wants to switch to an incentive-based compensation plan. To do so, Brush Strokes suggests that compensation for the agency should be

a.	set at a 15 percent commission with no additional charges.
b.	changed from a commission system to a fee system.
c.	changed to a pay-for-results basis for compensation.
d.	based on services plus markup.

ANS: C DIF: Moderate REF: p. 68-69 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Pricing TYP: Application

(Scenario 2-2) The agency has informed Brush Strokes that if they agree to its recommendation for television advertising, the agency will have to rely on outside sources for some of the work. In all likelihood, the agency will seek the most help with

a.	producing the spots.
b.	creating the ideas for the spots.
c.	developing the strategy behind the spots
d.	assessing the effectiveness of the spots.

ANS: A DIF: Moderate REF: p. 71 OBJ: 2-4

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Application

Scenario 2-3

After it drew a record-low 9.8 million viewers in 2004, ABC dropped the rights to air the Miss America pageant. Six years later, in 2010, ABC once again agreed to air the event after cable network TLC declined to pick up the pageant for a fourth year. Although ABC decided to pick up the pageant for a second time in the last twelve years, the terms of the agreement are far more favorable for the large cable network. Similar to its first stint with the network, the pageant will be shown on Saturday nights (television’s lowest viewing night of the week). The difference this time comes in the price ABC had to pay to acquire rights to the event—because of the recent decline in the event’s popularity, the network had to pay very little, and ultimately deemed the deal to be a “no-lose” situation.

(Scenario 2-3) One of the problems the Miss America Pageant has encountered has been an indifference or sometimes negative response to beauty pageants in general. Many viewers are critical of the swimsuit competition which awards points for physical characteristics. The pageant feels this part of the competition is integral to the overall program and wants to educate the public about why the swimsuit competition is included and how it contributes to a well-rounded program. To achieve its goals in this area, the pageant might employ the services of a(n)

a.	media buying service.
b.	public relations specialist.
c.	sales promotion agency.
d.	in-house agency.

ANS: B DIF: Difficult REF: p. 63 OBJ: 2-2

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-3) Obviously, the Miss America pageant will need to achieve more success if it is to remain on the ABC network. One aspect of this will hinge on whether or not the pageant can provide a clean, mistake-free program to all of its viewers. In order to ensure a smooth-running event, the pageant should hire a(n)

a.	design firm.
b.	production facilitator.
c.	market research firm.
d.	event planning agency.

ANS: D DIF: Moderate REF: p. 63 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-3) One of the difficulties facing the pageant’s board of directors is appealing to a younger target audience. The board decides that utilizing social networks such as Facebook and Twitter is crucial, and feels it needs to do something exciting and memorable in order to attract viewers. What type of group would be effective in making this happen?

a.	production services group
b.	creative services group
c.	market research group
d.	buying services group

ANS: B DIF: Moderate REF: p. 66 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-3) The pageant’s board of directors realizes that holding the event on a Saturday night is detrimental to its success. To supplement the television broadcast, the board contemplates setting up a pageant website and simulcasting the event live over the Internet. What kind of organization or expert might be helpful in planning the webcast?

a.	a specialized consultant
b.	an advertising agency
c.	a media buying agency
d.	a creative boutique

ANS: A DIF: Difficult REF: p. 70 OBJ: 2-4

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Application

Scenario 2-4

Advertising is a $300-billion-per-year business in the United States. Understandably, competition for clients is fierce among advertising agencies. There are many different reasons why a client may choose to move its business to a new agency, but there is one constant. The agency that wins the business is celebrated by the press; the agency that loses the business, however, is typically forgotten fairly soon.

(Scenario 2-4) What type of agency would Subway most likely select to promote its new line of sandwiches and bread to a national television audience?

a.	an Internet publisher
b.	an in-house advertising agency
c.	a creative boutique
d.	a full-service advertising agency

ANS: D DIF: Easy REF: p. 59 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Application

(Scenario 2-4) A client is unhappy because the work that its agency is turning out is constantly behind schedule and over budget. This client is likely to look for a new agency with a stronger ____ department.

a.	media planning
b.	creative
c.	account services
d.	trade-market services

ANS: C DIF: Moderate REF: p. 65 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

Scenario 2-5

In 2008, Chicago native Andrew Mason launched Groupon, a website that offered Chicago consumers various “deals of the day.” At the time, Groupon had a unique business model—each day, one “groupon” would be offered in a particular city. If a certain number of people signed up for the offer, then the deal became available to all. Now, only two years later, the business continues to grow, and the service is being offered in several more U.S. cities. Google made a multi-billion dollar offer for the company that Mason turned down in December of 2010. Continuing the company’s rapid rise to success will be a challenging task for CEO Andrew Mason and his team because they will be the first to attempt to advertise the unique services. Groupon needs to find ways to attract new users, and looking into new forms of advertising will be essential to the company’s success.

(Scenario 2-5) Because Groupon’s services differ depending on the city in which it is offered, its CEO decides each variation needs to have a catchy slogan that relates to that particular market. Which of the following types of advertising agencies would likely be the best choice to accomplish this specific goal?

a.	an interactive agency
b.	a full-service agency
c.	a creative boutique
d.	a in-house agency

ANS: C DIF: Moderate REF: p. 59-60 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Application

(Scenario 2-5) Groupon’s management has budgeted $20,000 for social media advertising for the coming year. How much can their advertising agency expect to earn from this commitment using a traditional commission system compensation plan?

a.	$2,000
b.	$3,000
c.	$5,000
d.	$8,000

ANS: B DIF: Difficult REF: p. 67 OBJ: 2-3

NAT: AACSB Analytic | CB&C Model Pricing TYP: Application

(Scenario 2-5) Groupon decides to hire a full-service advertising agency to create a new campaign for the company. The ad agency agrees to be compensated through an incentive based program that will measure increased brand awareness and brand identification. This type of compensation program is called a

a.	fee system.
b.	commission system.
c.	pay-for-results system.
d.	mark-up charge system.

ANS: C DIF: Easy REF: p. 68-69 OBJ: 2-3

NAT: AACSB Communication | CB&C Model Creativity TYP: Knowledge

(Scenario 2-5) Because Groupon does not do an extensive amount of advertising, it decides to look outside the company for help in guiding its efforts. The company called upon to aid Groupon would be referred to as a(n)

a.	client.
b.	market research firm.
c.	advertiser.
d.	external facilitator.

ANS: D DIF: Moderate REF: p. 69 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Research TYP: Application

Scenario 2-6

SC Johnson & Son produces a wide variety of very popular consumer products such as Shout^®, Windex^®, Mr. Muscle^®, Ziploc^®, Edge^®, Glade^®, Vanish^®, Raid^®, OFF!^®, Pledge^®, and Scrubbing Bubbles^® Bathroom Cleaner. These products are in highly competitive markets and require substantial investments in consumer promotion to maintain market share.

(Scenario 2-6) SC Johnson is not interested in doing any of the duties associated with advertising research, creative development, or media placement. Which of the following types of organizations would likely be the best match for their needs?

a.	a media buying service
b.	a creative boutique
c.	a research firm
d.	a full-service agency

ANS: D DIF: Moderate REF: p. 59 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-6) SC Johnson has recently hired an advertising agency to help promote their products. Several of SC Johnson’s senior managers have indicated that they are uncertain as to the specific benefits of advertising their consumer products or how to best position their products in the competitive market. Which of the following departments of their advertising agency should be involved in giving this information to this client?

a.	administrative services
b.	creative services
c.	account services
d.	marketing research services

ANS: C DIF: Moderate REF: p. 65 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Application

(Scenario 2-6) SC Johnson’s managers have agreed that their advertising agency will be compensated based on measures of audience awareness of their consumer products. This indicates that they have chosen a ____ compensation program for their agency.

a.	commission
b.	pay-for-results
c.	markup
d.	fee

ANS: B DIF: Moderate REF: p. 69 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Pricing TYP: Comprehension

(Scenario 2-6) SC Johnson has decided that additional data are necessary to determine specific messages that should be directed towards consumers. Which of the following departments in their ad agency will most likely be responsible for conducting this work?

a.	media services
b.	creative services
c.	account services
d.	marketing research services

ANS: D DIF: Easy REF: p. 69-70 OBJ: 2-4

NAT: AACSB Reflective Thinking | CB&C Model Research TYP: Comprehension

ESSAY

The advertising industry seems to be in constant transition nowadays. The text offers five broad issues that are affecting the structure of the advertising industry. Name at least three of these trends and explain why they are having such a great impact.

ANS:

Consumer control. Today’s consumers get on the Internet and choose the sites they want to visit, browsing and shopping where they wish, and viewing the items they feel like viewing. Social media sites offer highly accessible, continually updated personal information shared among unlimited numbers of participants. Blogs have overcome their early setbacks, with many now recognized as trusted sources of news and specialized information. DVRs like TiVo and controllers like Slingbox offer consumers control over programming choices and reduced viewership of ads.

Media proliferation, consolidation, and “multiplatform” organizations. Cable channels, direct marketing technology, Web options, and alternative media like mobile marketing have led to a proliferation of media options. Both media and agency organizations are consolidating into fewer and fewer large firms. And giant media companies are branching into more and more new properties—often owning interests in television news, newspapers, magazines, cable, and satellite, cable—thereby creating multiplatform media organizations. And the Web is now seeing its own media conglomerates.

Media clutter and fragmentation. There are more ways to try to reach consumers than ever before. Today, the average household has over 100 television channels. Ads are everywhere—on virtual billboards, on Internet banners, in podcast messages, on mobile devices. Consumers are bombarded by ad messages, and advertisers are continually finding ways to deal with the backlash against too much advertising.

Crowdsourcing. This involves the online distribution of certain tasks to groups, or crowds, of experts, specialists, aficionados, and other consumers so they can become involved and committed to the brand while helping to build the brand with their advice and recommendations.

Mobile marketing and mobile media. Of all the new media trends affecting advertising, mobile marketing may turn out to be the most relevant game-changer, depending on how consumers react, and the role these devices will play. Today’s ever-changing mobile devices (smartphones, tablets, personal navigation devices) offer wireless capability and new channels for advertising messages.

DIF: Difficult REF: p. 46-51 OBJ: 2-1

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Comprehension

Briefly summarize the structure of the advertising industry today by naming the key players and tracing their potential relationships and connections. Your answer does not have to be detailed—just a basic sketch of this structure is sufficient.

ANS:

The structure of the advertising industry today involves many talented and specialized professionals performing a wide range of tasks needed to initiate, prepare, plan, and place advertising.

Overall, advertisers (also called clients) can employ the services of advertising agencies and/or promotion agencies, which may in turn contract out specialized services from external facilitators, which may then use the help of various media organizations or target audiences to create and deliver the message. Of course, advertisers do not always hire agencies, and agencies do not always use external facilitators, etc.

Today’s advertisers are the businesses, not-for-profits, and government agencies that want to get their message to certain audiences. Manufacturers and service firms are the large national producers of consumer goods and services. Trade resellers are all organizations that buy and resell goods within the distribution channels, including retailers, wholesalers, and distributors. Federal, state, and local governments are the civic bodies that use advertising, promotion, recruiting, and personal selling to deliver their messages. Social organizations and not-for-profit organizations use ads and promotional efforts not to sell anything but to promote their causes and services, stimulate demand, disseminate information, and solicit donations and volunteers.

DIF: Moderate REF: p. 52-57 OBJ: 2-2

NAT: AACSB Analytic | CB&C Model Strategy TYP: Comprehension

What are the six broad areas of services offered by today’s advertising agencies and promotion firms? List as many as you can, then choose three, define briefly, and give an example.

ANS:

Though any agency structure may specialize in some of these, and some may provide all, the six services that can be offered by advertising agencies and promotion firms are as follows (student examples will vary):

Account services — to determine how the brand can benefit most from ads and promotions by identifying the brand benefits, target audiences, competitive positioning, and marketing plan

Marketing research services — to help the client interpret data and communicate these interpretations, often coordinated by an account planner

Creative and production services — to come up with the concepts, words, and images that express the value of the brand in a unique and memorable way

Production services — to take creative ideas and turn them into advertisements, commercials, direct mail pieces, and other promotional formats

Media planning and buying services — to determine how the client’s message can most effectively reach the target audiences, from among an enormous number of options, often coordinated by a media planner

Administrative services — to handle accounting, billing, and selling, as well as monitoring products to be sure deadlines are met, usually within the traffic department

DIF: Difficult REF: p. 65-67 OBJ: 2-3

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Comprehension

List the four major methods of agency compensation and briefly each describe. Outline any advantages or disadvantages associated with each system.

ANS:

Commission system. This is based on the amount of money the advertiser spends on media. At one time under this method, 15 percent of the total amount billed by the media organization was retained by the advertising agency as compensation for all costs in creating advertising for the client. Today, while about half of advertisers compensate agencies with a commission based on media costs, and not many adhere to the 15 percent level anymore. This system can create pressure on agencies to recommend the most expensive media options.

Markup charges. This involves the addition of a percentage added to services the agency purchases from outside sources, when it hires external facilitators for art, graphics, production, etc. If it is not used, there is no way for an agency to be compensated for its work related to contracting, communicating, and working with these outside firms.

Fee system. This compensation is based on an agreed-upon hourly rate for services provided. Most agencies work on this type of system rather than commission. A variation of this, the fixed-fee or contract system, is based on a single fee charged for a project. Unless the agency and client agree precisely as to what services are covered by the fee, serious rifts can result.

Pay-for-results. Recently many advertisers and agencies alike have been working on compensation programs called pay-for-results, that base the agency’s fee on the achievement of agreed-upon results. The drawback is in defining “results,” which have often been narrowly defined as sales. The system works better if results are measured brand awareness, identification, or exposure.

DIF: Moderate REF: p. 67-69 OBJ: 2-3

NAT: AACSB Analytic | CB&C Model Pricing TYP: Knowledge

What is an external facilitator? List the four main types and identify briefly. Within these categories, what kinds of new facilitators have emerged in recent years? Give an example.

ANS:

An external facilitator is an organization or individual that provides specialized services and expertise to advertisers and agencies in the process of planning, preparing, and executing promotional campaigns. The four main types of facilitators are as follows:

Marketing and advertising research firms. They perform original research using focus groups, surveys, or experiments to help clients and marketers understand the potential market and target audience for a product.

Consultants. They specialize in various areas of marketing, such as event planning, sponsorship, public relations, and media. Recently, four new types of consultants have emerged—those specializing in databases, Web development and management, customer relationship management, and even those specializing in traditional management.

Production facilitators. They are heavily relied upon by advertisers due to the technological expertise required in today’s media formats and marketing environments. Even large agencies cannot keep on staff experts in broadcast production, direct mail production, trade show booths, or in-store promotions.

Software firms. They have recently expanded and diversified into many types of specializations to meet the needs of today’s technological messaging.

DIF: Moderate REF: p. 69-71 OBJ: 2-4

NAT: AACSB Analytic | CB&C Model Promotion TYP: Knowledge

Chapter 4 – Social, Ethical, and Regulatory Aspects of Advertising and Promotion

TRUE/FALSE

If “Project Beacon” had been launched as planned, all the online searches and purchases of Facebook users would have appeared on their Facebook sites and then would have been broadcast to all their other Web connections.

ANS: T DIF: Moderate REF: p. 120 OBJ: 4-Intro

NAT: AACSB Ethics | CB&C Model Online/Computer TYP: Comprehension

Societies tend to monitor advertising to determine what is irresponsible, unethical, or illegal. Despite social shifts and technological advances, a culture’s views on what is acceptable and unacceptable never change.

ANS: F DIF: Moderate REF: p. 121 OBJ: 4-Intro

NAT: AACSB Ethics | CB&C Model International Perspective TYP: Comprehension

As a promotional tool and an industry, advertising gets a lot of attention, scrutiny, and criticism today because it is so conspicuous and has established a global presence.

ANS: T DIF: Moderate REF: p. 121 OBJ: 4-Intro

NAT: AACSB Reflective Thinking | CB&C Model International Perspective

TYP: Comprehension

Though some are legitimate, many criticisms of advertising prove to be uninformed and simplistic, based on emotion rather than fact, and ignoring complex social and legal factors.

ANS: T DIF: Moderate REF: p. 121 OBJ: 4-Intro

NAT: AACSB Analytic | CB&C Model Promotion TYP: Comprehension

Advertisers of “controversial products” are in danger of deceiving the public when they attempt to show social responsibility, such as beer companies spending millions a year promoting responsible drinking.

ANS: F DIF: Moderate REF: p. 122 OBJ: 4-1

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

Critics of advertising claim that advertising carries little if any good product information and that most advertising is biased, limited, and inherently deceptive.

ANS: T DIF: Easy REF: p. 122 OBJ: 4-1

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

Some analysts believe that society is actually better off with a large mix of ads, commercials, and promotions because these do little more than “shuffling existing total demand” rather than increasing or decreasing it.

ANS: F DIF: Moderate REF: p. 125 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Strategy TYP: Comprehension

There are those who insist that advertising creates conformity and status-seeking behavior, while others argue that advertising reflects, not causes, America’s age of consumption.

ANS: T DIF: Moderate REF: p. 127 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Customer TYP: Comprehension

It is possible to make a reasonable argument that the massive consumption that advertising upholds and glorifies is actually quite good for American society, and for other cultures around the world.

ANS: T DIF: Easy REF: p. 130 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model International Perspective

TYP: Comprehension

Research shows that subliminal advertising can lead people to buy things they otherwise wouldn’t want, because much persuasive imagery and information is accepted as true when processed in a subconscious way.

ANS: F DIF: Easy REF: p. 130-131 OBJ: 4-1

NAT: AACSB Communication | CB&C Model Research TYP: Knowledge

Even those who view advertising positively for other reasons often admit that it rarely contributes to art and culture, and art and culture have little room for advertising.

ANS: F DIF: Easy REF: p. 132 OBJ: 4-1

NAT: AACSB Diversity | CB&C Model Promotion TYP: Comprehension

Advertisers have historically been responsible for buying air time on educational and cultural programs despite their smaller audiences, thereby boosting the overall quality of American television.

ANS: F DIF: Easy REF: p. 133 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Customer TYP: Comprehension

Truth in advertising is a broad term referring to the common sense and acceptance of general standards that is expected of anyone promoting something, rather than a legal definition regarding real deception.

ANS: F DIF: Easy REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Strategy TYP: Knowledge

It is almost impossible to legislate against emotional appeals in ads, since even if they seem exaggerated or inaccurate, they are unquantifiable so there is no way to prove this.

ANS: T DIF: Moderate REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Strategy TYP: Comprehension

The calls for restrictions on advertising to children over the years have been based on a number of concerns, one of which is the promotion of superficial material things as necessary and valuable.

ANS: T DIF: Moderate REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Strategy TYP: Comprehension

The Children’s Food and Beverage Advertising Initiative is a voluntary commitment, signed by many well-known corporations, to stop advertising on children’s television programs.

ANS: F DIF: Moderate REF: p. 135 OBJ: 4-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

The FTC has regularly issued warnings to tobacco companies about ads that have been shown to cause young people to start smoking, backed up by decades of substantial evidence to this effect published by reputable medical journals.

ANS: F DIF: Difficult REF: p. 136 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Research TYP: Comprehension

The three primary areas of advertising regulation are obscenity and profanity, deception, and unsolicited or direct marketing.

ANS: F DIF: Moderate REF: p. 138 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Strategy TYP: Knowledge

The FTC’s regulations on deception have no authority over omissions or missing information about a product, but only cover those false statements or misleading claims actually made by the advertiser.

ANS: F DIF: Difficult REF: p. 138 OBJ: 4-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

When a manufacturer and dealer share the expense of ads, at times adding hidden price concessions and moving into illegal territory, they are involved in vertical cooperative advertising.

ANS: T DIF: Easy REF: p. 139 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

An advertisement for Jif peanut butter that compared it to Skippy peanut butter, even if the information is accurate, would be illegal because it mentions brand-name goods produced by another firm.

ANS: F DIF: Difficult REF: p. 139 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

Consumer groups have been just as successful as the FTC in restricting children’s advertising.

ANS: T DIF: Moderate REF: p. 141 OBJ: 4-3

NAT: AACSB Reflective Thinking | CB&C Model Strategy TYP: Knowledge

A powerful ruling by the FTC in dealing with unfair advertising is a cease-and-desist order, in which an advertiser agrees to stop running the ad but doesn’t have to admit any guilt or wrongdoing.

ANS: F DIF: Moderate REF: p. 145 OBJ: 4-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

The FTC’s advertising substantiation program, set up in the 1970s, requires that documented evidence supporting any claims is made available to consumers, and that such evidence provides a “reasonable basis” for believing that the claims are true.

ANS: T DIF: Moderate REF: p. 143 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

State governments have very little authority over promotional activities of firms, and since most companies conduct interstate commerce, any violations are federal issues.

ANS: T DIF: Easy REF: p. 145 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

When an NFL football player begins endorsing a line of energy bars and protein drinks, he is required by the FTC to disclose this relationship and the fee received, but he is not required to actually use the products.

ANS: F DIF: Moderate REF: p. 145 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

Depending on the viewpoint, self-regulation can be considered a triumph of business integrity over meddling government, or a meaningless sham with no real authority beyond the cooperation of industry members.

ANS: T DIF: Moderate REF: p. 145 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Strategy TYP: Comprehension

A relatively new federal agency is the National Advertising Division (NAD), empowered to create and enforce strict standards for packaging, labeling, distribution, and merchandising through its National Advertising Review Board (NARB).

ANS: F DIF: Moderate REF: p. 146-147 OBJ: 4-4

NAT: AACSB Communication | CB&C Model Strategy TYP: Knowledge

The three divisions within a local Better Business Bureau—merchandise, financial, and solicitations—investigate advertising practices of companies in their geographic area.

ANS: T DIF: Moderate REF: p. 148 OBJ: 4-4

NAT: AACSB Communication | CB&C Model Strategy TYP: Knowledge

Since there has been little regulation of advertising and promotion on the Internet to date, the industry itself has had to act as its main governing body.

ANS: T DIF: Moderate REF: p. 149 OBJ: 4-4

NAT: AACSB Communication | CB&C Model Online/Computer

TYP: Knowledge

Consumer and industry groups are free to make attempts at shaping and restricting the advertising process, but in reality have little voice or power compared to the federal government.

ANS: F DIF: Difficult REF: p. 149 OBJ: 4-4

NAT: AACSB Reflective Thinking | CB&C Model Customer TYP: Comprehension

Almost 50 percent of all email traffic is spam, amounting to about 1 billion spam messages sent around the world every 24 hours, one-third of which involves pornographic messages.

ANS: F DIF: Moderate REF: p. 151 OBJ: 4-5

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Knowledge

The main restriction of direct mail sweepstakes, as imposed by Congress, involves the requirement that they are randomly and fairly distributed to a wide range of communities and addresses throughout the 50 states.

ANS: F DIF: Moderate REF: p. 152 OBJ: 4-5

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

The first government restriction on telemarketing required companies to remove households from their dialing lists when residents requested this.

ANS: F DIF: Moderate REF: p. 152 OBJ: 4-5

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

The field of public relations is not restricted by the same types of laws as other business elements of the promotional and marketing mix.

ANS: T DIF: Easy REF: p. 154 OBJ: 4-5

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

MULTIPLE CHOICE

In response to the argument that advertising provides little useful information about product features and functions, proponents say that

a.	emotional significance and lifestyle factors are often more important to a consumer.
b.	today’s detailed ads are often overflowing with too much utilitarian information.
c.	brand name is all that really matters to most people.
d.	all relevant facts about a product cannot fit into a single ad.

ANS: A DIF: Moderate REF: p. 123 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Strategy TYP: Comprehension

A Planetfeedback.com survey found that as many as 95 percent of respondents considered themselves as

a.	frequent Internet shoppers.
b.	easy targets for online fraud or identity theft.
c.	benefiting from individualized messages and personalized ads.
d.	angry or furious over spam and pop-up ads.

ANS: D DIF: Moderate REF: p. 124 OBJ: 4-1

NAT: AACSB Technology | CB&C Model Research TYP: Comprehension

Many consumers are becoming frustrated or cynical regarding the increase of brand-name products that appear in television shows and movies or show up in bloggers’ commentaries. These are examples of

a.	stealth sponsorship.
b.	hierarchy of needs.
c.	emotional appeals.
d.	commerce-content crossover.

ANS: D DIF: Moderate REF: p. 124 OBJ: 4-1

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

Which of the following is one of the four major aspects of advertising that lower the overall cost of products, according to proponents?

a.	appropriation
b.	hidden price concessions
c.	affirmative disclosure
d.	economies of scale

ANS: D DIF: Moderate REF: p. 125 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Pricing TYP: Knowledge

Today’s advertising process can make use of its speed, widespread reach, and ability to describe benefits. This promotes the diffusion of innovations, meaning that products are

a.	delivered quickly to a large portion of the marketplace.
b.	priced affordably for the average consumer.
c.	designed to meet a number of basic human needs.
d.	produced to imitate the goods of competitors rather than offer creative new options.

ANS: A DIF: Difficult REF: p. 125 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Distribution TYP: Comprehension

According to Maslow’s hierarchy of needs, ads for breakfast cereals and soft drinks, as well as antibacterial soap and fluoride toothpaste, can be thought of as promotions for products that address

a.	physiological needs.
b.	love and belonging needs.
c.	self-actualizing needs.
d.	esteem needs.

ANS: A DIF: Moderate REF: p. 126 OBJ: 4-1

NAT: AACSB Reflective Thinking | CB&C Model Customer TYP: Application

A high-end specialty store, recognized nationwide for its prestigious reputation, is busy with customers eyeing and buying costly items of clothing with designer labels. They’re also adding $400 purses, $500 shoes, and $1,000 bracelets and necklaces to their ensembles. Which basic needs on Maslow’s Hierarchy are most likely being fulfilled by these purchases?

a.	safety needs
b.	love and belonging needs
c.	esteem needs
d.	self-actualization needs

ANS: C DIF: Moderate REF: p. 126 OBJ: 4-1

NAT: AACSB Reflective Thinking | CB&C Model Customer TYP: Application

Stephen Fox, chronicler of advertising history, maintains that America’s materialistic consumption culture

a.	is a direct result of our society’s rush toward progress with massive amounts of advertising.
b.	is a healthy situation and a positive economic phenomenon thanks to decades of advertising.
c.	is the work of hidden persuaders who create artificial symbols of success and push our buttons to aspire toward these.
d.	is reflected by advertising in its visual manifestation of that culture, not caused by advertising.

ANS: D DIF: Difficult REF: p. 127 OBJ: 4-1

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Comprehension

In their 2004 “Campaign for Real Beauty,” the people creating the groundbreaking Dove ads attempted to be realistic, show sensitivity, and fight stereotypes by featuring

a.	plus-size models who do not fit the narrow norm of beauty.
b.	real women displaying various ethnicities, looks, and sizes.
c.	both men and women using Dove products.
d.	endorsements by famous elderly actresses with young-looking skin.

ANS: B DIF: Moderate REF: p. 128-129 OBJ: 4-1

NAT: AACSB Diversity | CB&C Model Customer TYP: Application

Both the Centers for Disease Control, a highly respected federal agency, and Coca-Cola, an established giant supplying the world with one of its most popular products, have run into problems with ads that

a.	made false claims that had to be retracted and corrected.
b.	promoted cultural stereotypes while targeting young children.
c.	used purposefully confusing and misleading language.
d.	were criticized for being explicit and offensive.

ANS: D DIF: Moderate REF: p. 129 OBJ: 4-1

NAT: AACSB Communication | CB&C Model Customer TYP: Application

In recent years, the U.S. Senate has approved a tenfold increase in fines for advertising situations that are determined to step over the line regarding American society’s basic ethical principles. What issues are being regulated in this way?

a.	ad agencies that knowingly make false claims
b.	advertisers that lure children into dangerous or unhealthy behaviors
c.	TV and radio stations that violate rules on airing profanity or sexually explicit materials
d.	print media with ads that include erotic images or language

ANS: C DIF: Moderate REF: p. 130 OBJ: 4-1

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

Some people believe that advertising can communicate below the threshold of consciousness, despite no solid evidence to prove this. Still, based on this belief, they have concerns that advertising is

a.	consistently offensive.
b.	influencing program content.
c.	perpetuating cultural stereotypes.
d.	deceiving due to subliminal stimulation.

ANS: D DIF: Moderate REF: p. 130-131 OBJ: 4-1

NAT: AACSB Ethics | CB&C Model Customer TYP: Comprehension

Well-known illustrator Andy Warhol felt strongly that the American ads that had promoted the nation’s most popular products over the decades were

a.	visual manifestations of a sick society overtaken with consumerism and greed.
b.	anti-elitist artworks for the masses depicting ordinary goods used by both rich and poor.
c.	pioneering graphic innovations that visually displayed the power of capitalism.
d.	flashy images and tasteless visuals that cluttered the cultural landscape.

ANS: B DIF: Moderate REF: p. 132 OBJ: 4-1

NAT: AACSB Diversity | CB&C Model Creativity and Innovation

TYP: Comprehension

One way that advertising has shaped media in a negative and unhealthy way is seen in ____, in which reporters are paid by corporations in exchange for favorable treatment and promotion in editorials and commentaries.

a.	unfair advertising
b.	behavioral targeting
c.	stealth sponsorship
d.	subliminal advertising

ANS: C DIF: Easy REF: p. 133 OBJ: 4-1

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

Which of the following best defines ethics?

a.	moral standards and principles used to evaluate behavior
b.	truthful and validated statements and beliefs
c.	legal limits placed on personal practices
d.	universal and timeless values about what is good or bad

ANS: A DIF: Easy REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

According to your text, how are most of our decisions made regarding what is ethical or unethical in advertising?

a.	through personal judgment
b.	through industry codes of ethics
c.	through government regulation
d.	through artistic instinct

ANS: A DIF: Moderate REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Strategy TYP: Comprehension

What is the most fundamental ethical issue in advertising?

a.	exaggeration, which is a serious but increasingly common practice
b.	taste, particularly regarding society’s exposure to offensive messages
c.	materialism, which also is a key legal issue
d.	deception, particularly false or misleading statements

ANS: D DIF: Easy REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Strategy TYP: Comprehension

Which of the following claims demonstrates puffery in advertising?

a.	“Only Crest Earns the Dental Seal of Approval Among All Major Brands!”
b.	“Ford Trucks Have Lower MPG than Chevy Trucks!”
c.	“Tide Beats Cheer in Sales 8th Year in a Row!”
d.	“World’s Best Cup of Coffee Served with a Smile Here!”

ANS: D DIF: Easy REF: p. 134 OBJ: 4-2

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

Which aspects of advertising are legal but fall into an ethical gray area, making them almost impossible to legislate against?

a.	disclaimers
b.	emotional appeals
c.	testimonials
d.	contests and sweepstakes

ANS: B DIF: Moderate REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

What was one of the government’s earliest restrictions that targeted specific techniques and policies being used in programming and advertising designed for children?

a.	the Children’s Food and Beverage Advertising Initiative
b.	the Nutrition Labeling and Education Act
c.	the “Cheeseburger Bill”
d.	the Children’s Television Act

ANS: D DIF: Moderate REF: p. 135 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Customer TYP: Knowledge

Three teenage girls who hang around together all start to smoke cigarettes, and eventually start to drink beer on weekends. In studying advertising that supposedly makes dangerous and addictive products appealing to young people, multiple research studies have found that decisions on the part of girls like this to use tobacco and alcohol

a.	are most strongly influenced by families, friends, and peers, not by advertising.
b.	have been increasingly put off until their adult years while still driven somewhat by ads at that time.
c.	often stem from hereditary traits.
d.	directly relate to advertising campaigns of criminally negligent firms.

ANS: A DIF: Difficult REF: p. 135-136 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Research TYP: Application

The text poses questions about whether advertising causes people to smoke and drink. How does it answer these questions?

a.	Brands in these categories don’t spend enough advertising dollars to truly influence consumers.
b.	These ads are usually designed to be subliminal, suggesting but not causing behavior.
c.	Even sophisticated and knowledgeable consumers are highly influenced by ads to use these products.
d.	Advertising cannot create primary demand in mature product categories such as these.

ANS: D DIF: Difficult REF: p. 135-136 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

Which of the following depicts advertising as it plays its most important role, and demonstrates its most powerful influence, in our society and around the world?

a.	communicating with various cultures about their most important social issues (example: dangers of drinking and driving)
b.	educating people to become consumers, who by definition start out as “information poor” (example: ingredients in beer)
c.	causing people to decide for the first time to try items from a generic classification of goods (example: alcohol)
d.	influencing people to choose a certain brand once they’ve decided to use a product category (example: Budweiser)

ANS: D DIF: Difficult REF: p. 136-137 OBJ: 4-2

NAT: AACSB Reflective Thinking | CB&C Model International Perspective

TYP: Application

Four friends, all 13-year-old girls, decide to try coloring their hair for the first time. They scan the drugstore shelves together, with no real knowledge and no preference for any particular item, but they each leave with a hair coloring kit. Which concept is involved here?

a.	primary demand stimulation
b.	mature product promotion
c.	product category demand
d.	brand/product placement

ANS: A DIF: Difficult REF: p. 137 OBJ: 4-2

NAT: AACSB Reflective Thinking | CB&C Model Product TYP: Application

To protect vulnerable consumers from widespread exposure to a “controversial product” area, in 2006 the federal government took the step to ban all ____ in the United States.

a.	online gambling
b.	child pornography
c.	Internet pharmaceutical sales
d.	abortion pills

ANS: A DIF: Easy REF: p. 137 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Customer TYP: Knowledge

Which of the following actions would be outlawed under the “Cheeseburger Bill,” passed by the U.S. House in 2004?

a.	featuring high-calorie and high-fat foods during children’s programming
b.	falsifying nutrition information for fast foods
c.	promoting toys to children that tie in with fast foods, sugary drinks, and salty snacks
d.	suing food companies for causing someone to become obese

ANS: D DIF: Moderate REF: p. 137 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

Although the courts and the FTC have been quite specific about defining many other practices, the definition of ____ has always been relatively vague.

a.	unfair advertising
b.	copyright infringement in advertising
c.	deception in advertising
d.	phishing in online advertising

ANS: A DIF: Moderate REF: p. 138-139 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

Vertical cooperative advertising is usually legal, except when

a.	unquantifiable emotional appeals are involved.
b.	a representation, omission, or practice is misleading.
c.	large corporations and mega-retailers create monopolies in this way.
d.	bogus advertising allowances are given in the form of hidden price concessions.

ANS: D DIF: Difficult REF: p. 139 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

If firms decide to use comparison advertisements, they

a.	may be required by the FTC to substantiate their claims.
b.	share the costs of advertising with local dealers and distributors.
c.	are acting in opposition to the recommendations of the American Association of Advertising Agencies.
d.	cannot legally mention a competing firm or brand by name.

ANS: A DIF: Moderate REF: p. 139-140 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

A company is found to be making a technically “true” but unfair comparison to a competitor’s product. It may be required to add information in future ads clarifying its benefits against those of a competitor in a balanced and fair way. This is called

a.	vertical comparative advertising.
b.	stealth sponsorship.
c.	a trade allowance.
d.	a disclaimer.

ANS: D DIF: Moderate REF: p. 140 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

________, established by the Better Business Bureau, evaluates ads directed at children based on guidelines that encourage sensitivity to their level of sophistication and knowledge, as well as emphasis on positive social traits such as friendship and kindness.

a.	The Family Research Council
b.	The Children’s Food and Beverage Advertising Initiative
c.	The Children’s Advertising Review Unit
d.	Action for Children’s Television

ANS: C DIF: Moderate REF: p. 141 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Customer TYP: Knowledge

Which organization is the newest addition to the federal government’s regulatory team regarding advertising issues?

a.	the Library of Congress
b.	the Federal Communications Commission
c.	the Consumer Finance Protection Agency
d.	the U.S. Patent Office

ANS: C DIF: Easy REF: p. 141 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

The Wheeler-Lea Amendment in 1938 greatly influenced the future of advertising in America by

a.	establishing the powerful Federal Trade Commission (FTC).
b.	allowing the FTC to stop practices that were misleading regardless of their impact on competition.
c.	granting industries the right to form self-regulatory organizations to reduce FTC interference.
d.	reducing FTC control over advertising practices regarding competition and monopoly.

ANS: B DIF: Difficult REF: p. 142 OBJ: 4-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Comprehension

Due to 1990 legislation, the FTC’s role in regulating advertising was expanded regarding

a.	nutrition labeling.
b.	spam.
c.	telemarketing.
d.	direct mail.

ANS: A DIF: Moderate REF: p. 142 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

An established cereal manufacturer is being investigated by the FTC for claims that its oatmeal can repair damaged arteries and prevent heart disease. Its executives are aware that if the claims are found to be false, the firm may receive the FTC’s most severe penalty, which involves

a.	ordering corrective advertising.
b.	issuing a cease-and-desist order.
c.	ruling on advertising substantiation.
d.	dissolving the corporation.

ANS: A DIF: Moderate REF: p. 143-144 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

Endorsements, testimonials, or other positive comments about products made by ____ have recently been more tightly restricted by the FTC, requiring that they disclose any payments for these promotions.

a.	experts
b.	bloggers
c.	celebrities
d.	average consumers

ANS: B DIF: Easy REF: p. 145 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

A potentially problematic shampoo ad is submitted to the National Advertising Review Board by an upset major competitor that considers its wording to be deceptive. The NARB has several options in the actions it may take, but which outcome is it not authorized to direct?

a.	persuading the advertiser to change the wording in the ad
b.	assessing a fine against the advertiser
c.	publicly identifying the advertiser, complaint, or findings
d.	dismissing the case altogether

ANS: B DIF: Moderate REF: p. 148 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

A claim has been reviewed by the NARB and a commercial for a bottled sports drink is judged to be full of allusion, innuendo, and vague health claims. Now the ____ will be held responsible for the false content.

a.	CEO of the sports drink supplier
b.	advertising agency promoting the sports drink
c.	cable television stations that ran the ad
d.	sports drink manufacturing factory

ANS: B DIF: Moderate REF: p. 148 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

What is one of the most widely recognized standards in the advertising industry, explaining its responsibilities, social influences, and ethical guidelines for decency and honesty?

a.	the FTC voluntary commitments
b.	the 4As Creative Code
c.	the BBB set of guidelines
d.	the Code Authority of the NAB

ANS: B DIF: Easy REF: p. 148 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

The U.S. Internet Industry Association differs from similar trade groups of online advertisers in the United Kingdom and Canada in that it

a.	has much power and authority to restrict the actions of its members.
b.	is a federal organization with legal powers.
c.	restricts not only spam but all forms of unsolicited email.
d.	has issued no self-regulatory guidelines.

ANS: D DIF: Moderate REF: p. 149 OBJ: 4-4

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Comprehension

Which of the following is true regarding the concept of consumerism?

a.	It is a relatively recent concept first observed in the 20th century.
b.	It involves consumer-oriented promotions such as coupons, premiums, and sweepstakes.
c.	It defines the tactics that individuals and groups use to enact laws, pressure firms, or target unethical practices regarding goods and services.
d.	It refers to the ongoing expansion of contemporary marketing beyond traditional production of ads and commercials, including e-commerce and behavioral targeting.

ANS: C DIF: Moderate REF: p. 149 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Customer TYP: Comprehension

Which of the four primary consumer protection organizations was the first to be established, and is best known for its publication of Consumer Reports?

a.	Consumer Federation of America
b.	Consumers Union
c.	Consumer Alert
d.	Commercial Alert

ANS: B DIF: Difficult REF: p. 149 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Customer TYP: Knowledge

Which company found itself at the center of a widespread movement instigated by consumers, and one of the most publicized events in the history of marketing?

a.	Nike
b.	General Mills
c.	Coca-Cola
d.	Procter & Gamble

ANS: C DIF: Moderate REF: p. 150 OBJ: 4-4

NAT: AACSB Analytic | CB&C Model Customer TYP: Knowledge

What is the most pressing regulatory issue facing both direct marketing and e-commerce today?

a.	the growing flood of unsolicited advertising messages
b.	the unethical aspects of contests and sweepstakes
c.	the increase in identity theft and fraud
d.	the privacy concerns stemming from database development

ANS: D DIF: Moderate REF: p. 150 OBJ: 4-5

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Comprehension

The biggest concern over the future of behavioral targeting involves its growing ability to

a.	tap into confidential credit card databanks.
b.	jam global traffic with billions of unwanted emails.
c.	hack into sensitive government websites.
d.	track a person’s moves on the Internet.

ANS: D DIF: Moderate REF: p. 150 OBJ: 4-5

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Comprehension

The ____ does not outlaw all unsolicited email, but does target fraudulent, deceptive, or pornographic messages sent to email addresses.

a.	Robinson-Patman Act
b.	CAN SPAM Act
c.	Wheeler-Lea Amendment
d.	Children’s Online Privacy Protection Act

ANS: B DIF: Easy REF: p. 151 OBJ: 4-5

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Knowledge

Marketers have to be particularly cautious about using ____ as a form of promotion, because fraud abounds in this area.

a.	coupons
b.	telemarketing
c.	premiums
d.	trade allowances

ANS: A DIF: Moderate REF: p. 151-152 OBJ: 4-5

NAT: AACSB Technology | CB&C Model Promotion TYP: Knowledge

The Telephone Consumer Fraud and Abuse Prevention Act of the mid-1990s

a.	created restrictions for telemarketers.
b.	banned recorded messages and robocalls.
c.	allowed consumers to switch their numbers to an unlisted status.
d.	set up the Do Not Call Registry.

ANS: A DIF: Moderate REF: p. 152 OBJ: 4-5

NAT: AACSB Ethics | CB&C Model Customer TYP: Knowledge

Sales promotions are regulated by the federal government over which broad areas?

a.	direct marketing, telemarketing, and e-commerce
b.	premiums, trade allowances, and sweepstakes/contests
c.	direct mail, coupons, and lotteries
d.	spam, phishing, and behavioral targeting

ANS: B DIF: Moderate REF: p. 153 OBJ: 4-5

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

Issues of both _____ and _____ represent restrictions on the activities of public relations firms, and involve getting written permission for the use of certain materials.

a.	affirmative disclosure; diffusion of innovation
b.	defamation; material representation
c.	substantiation; behavioral targeting
d.	appropriation; copyright

ANS: D DIF: Difficult REF: p. 154 OBJ: 4-5

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

What concept is involved when a statement that occurs in print is untrue and damages the reputation of a person, based on words found in magazine, newspaper, direct mail, or Internet reports?

a.	libel
b.	slander
c.	stealth sponsorship
d.	affirmative disclosure

ANS: A DIF: Easy REF: p. 155 OBJ: 4-5

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

Scenario 4-1

A group called Adbusters has a website containing many pages that address issues of consumption and culture, media practices, and corporate responsibilities. For example, “The momentum has clearly accelerated. By some measures humans have used more physical resources since World War II than in all of history before it. It’s now taking a toll beyond anything we could ever have imagined. What does it mean when one-sixth of the world’s population consumes without any real restraint?”

Throughout the website, there are many references to advertising’s role in creating and maintaining this situation. Not surprisingly, virtually all of the references to the practice of advertising are negative.

(http://www.adbusters.org/home/)

(Scenario 4-1) Organizations like Adbusters see advertising as superficial. This view of advertising says that it

a.	is not entertaining, or even interesting, to consumers.
b.	has no effect on demand for specific brands of products.
c.	offers little information based on function or performance.
d.	ignores the hedonic aspects of products.

ANS: C DIF: Easy REF: p. 122 OBJ: 4-1

NAT: AACSB Communication | CB&C Model Promotion TYP: Knowledge

(Scenario 4-1) Some philosophies regarding our path to overconsumption proposed by Adbusters echo the words of advertising historian Stephen Fox when he wrote, “One may build a compelling case that American culture is—beyond redemption—money-mad, hedonistic, superficial, rushing heedlessly down a railroad track called Progress.” Fox then concluded that advertisers

a.	are not creating the American way of life, but just reflecting it, good or bad.
b.	have nothing to do with the fact that all modern cultures have essentially become obsessed with consumption, not just America.
c.	are the self-serving manipulators and hidden persuaders who have created this situation.
d.	have in fact focused on progress, which despite its drawbacks has led to improved conditions and comfortable lifestyles for many Americans.

ANS: A DIF: Moderate REF: p. 127 OBJ: 4-1

NAT: AACSB Reflective Thinking | CB&C Model Promotion TYP: Application

(Scenario 4-1) A counterargument to claims that ads only lead to mindless consumption points to advertisers continued financial support for a varied and accessible mass media. In fact, the advertising world spent about $ ____ in 2009 on traditional mass media, and with the addition of online advertising, that figure increased to $ ____.

a.	100 million; 150 million
b.	30 billion; 50 billion
c.	140 billion; 200 billion
d.	220 billion; 400 billion

ANS: C DIF: Moderate REF: p. 132 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Promotion TYP: Knowledge

(Scenario 4-1) In the past, Adbusters has cited 12 magazines that it said are responsible for pushing “a clean, exciting image for one of the dirtiest products around: tobacco.” It suggested that Americans cancel their subscriptions to these magazines until they stopped accepting these ads. This is an example of

a.	the social phenomenon called corrective advertising.
b.	a strategic tool for pressuring advertisers called boycott.
c.	a push for consumers to mobilize and take certain actions called behavioral targeting.
d.	the self-regulatory practice called corrective advertising.

ANS: B DIF: Moderate REF: p. 149 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Strategy TYP: Application

Scenario 4-2

“Consumerism is a pattern of behavior that helps to destroy our environment, personal financial health, the common good of individuals and human institutions.” This quote is stated on the home page of a website called Overcoming Consumerism. The quote goes on to say, “This site details methods that you can use to help defeat consumerism, save money, work less and lead a more satisfying and environmentally benign life while you help to restore the economic self-sufficiency of your community.”

(http://www.verdant.net/)

As one navigates from page to page on the site, advertising is often implicated as a source of the movement toward consumerism. Many of the same criticisms of advertising found on the site were outlined in the textbook.

(Scenario 4-2) One quote from the site reads, “Time, the precious shrinking commodity of our lives, is exchanged for money to buy things that there is usually little time to enjoy. What time is left over after work is often devoured by television, basically a series of ever-more mediocre filler programs inserted between ever-more spectacular commercials whose purpose is to stoke further desire for more things.” In response to the charge that contemporary advertising robs people of time, supporters of advertising would state that it

a.	is worth the time because it usually contains a great deal of functional information.
b.	offsets the time spent processing ad content with the time spent purchasing products.
c.	is continually producing shorter and faster messages so it really doesn’t take much time.
d.	actually saves time since people don’t have to search as hard to find information about products they desire.

ANS: D DIF: Difficult REF: p. 122 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Promotion TYP: Application

(Scenario 4-2) One page on the site maintains that advertising seduces children into believing that “their self-worth is based on $100 inflatable, illuminated sneakers.” Besides this concern that ads promote superficiality and materialism, the text outlines other concerns regarding children’s advertising. For instance, sophisticated ads aimed at children can cause

a.	conflicts between parents and children.
b.	dissatisfaction with the actual programming.
c.	controversies that cannot regulated by the government due to First Amendment rights.
d.	complex decision-making skills and adult purchasing processes at too young an age.

ANS: A DIF: Difficult REF: p. 135 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Customer TYP: Application

(Scenario 4-2) The writers of Overcoming Consumerism believe that as consumerism grows and advertising continues to support it, people will be lured into buying anything and everything. But the text notes that advertising

a.	can only create a primary demand for mature product categories.
b.	cannot create a primary demand in mature product categories.
c.	points out both the pros and cons of any particular product, so consumers can’t be “lured” into buying anything.
d.	merely informs the consumer and does not try to persuade.

ANS: B DIF: Moderate REF: p. 136 OBJ: 4-2

NAT: AACSB Analytic | CB&C Model Product TYP: Application

Scenario 4-3

The Lightning Rod is a fishing rod being introduced by Castaway Sports. At a preliminary meeting with its agency, the president of Castaway Sports mentions that the rod can improve casting distance for an average individual by more than 20 percent. The account executive asks if the president has data to support this, and the president says “Yes.” The agency proceeds to produce a series of television spots featuring a well-known sports celebrity using the rod and rating it as excellent. The spots run on network television and trumpet the improved casting distance that the rod provides. The slogan of the spots is “Lightning Rod—The Finest Rod Ever Cast.” After about a week, a competitor questions whether the rods really offer the improved performance Castaway Sports claims, and decides to file a complaint with the FTC.

(Scenario 4-3) The slogan for the spot, “Lightning Rod—The Finest Rod Ever Cast,” would most likely be considered by U.S. courts to be

a.	a false and misleading statement, which needs to be retracted.
b.	a superlative, which must be provable.
c.	unethical, but not truly deceptive.
d.	puffery, which doesn’t need to be proved or disproved.

ANS: D DIF: Moderate REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

(Scenario 4-3) The FTC investigates the claim of 20 percent more casting distance when using the Lightning Rod. Castaway Sports admits that it has no actual data to support the claim but believes it to be true. Still, the FTC rules that should stop running the ads. This is an example of

a.	affirmative disclosure.
b.	a cease-and-desist order.
c.	a consent order.
d.	corrective advertising.

ANS: C DIF: Moderate REF: p. 143 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

(Scenario 4-3) In the commercial, the sports star is shown in a sailboat on a beautiful lake, sending a long cast into the water, then listing the excellent features of the Lightning Rod. It closes with him happily reeling in a fish. To meet FTC standards for this type of endorsement, the celebrity must

a.	be considered an expert in the field of sport fishing.
b.	be approved by the FTC before the spot can be produced.
c.	actually use the Lightning Rod when fishing on his own.
d.	write the statements that he makes in the ad.

ANS: C DIF: Moderate REF: p. 144-145 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

(Scenario 4-3) Based on the FTC decision, the claim of 20 percent extra casting distance is now found to be undocumented and lacking believable evidence. Who is held responsible for making this unsubstantiated claim?

a.	the president of Castaway Sports
b.	the agency that produced the commercial
c.	the corporation that manufactures the Lightning Rod
d.	the celebrity who made the claim in the commercial

ANS: B DIF: Easy REF: p. 148 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

(Scenario 4-3) The competitor who filed a complaint with the FTC also had the option of working with the media self-regulatory organization that evaluates ethical issues, the _____, which has the authority to review concerns over issues of truth, fairness, or good taste and make recommendations based on its findings.

a.	Consumer Federation of America
b.	NAB’s Code Authority
c.	Family Research Council
d.	National Association of Attorneys General

ANS: B DIF: Moderate REF: p. 148 OBJ: 4-4

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

Scenario 4-4

Joe Rowan walked into Pederson Toyota one day and began looking at price stickers on Toyota Camrys. He was interested in that model because he had seen a number of television and magazine ads describing the car’s features and reputation for reliability. After closely examining the stickers, Joe noticed a line that said “Dealer Promotion Allowance—$125.00.” Joe asked a salesperson what that meant. The salesman replied that it was a charge that helped the dealership pay for local advertising to encourage consumers to shop at that particular dealer. After further discussion, Joe learned that almost 5 percent of the cost of the vehicle comes from expense for national and local advertising.

(Scenario 4-4) After Joe complained, the salesperson replied, “If our industry didn’t do so much advertising you probably couldn’t afford to buy that computer to do your own research.” Which of the following “pros” of advertising is the salesperson likely using to support his comment?

a.	Advertising fosters a diverse and affordable mass media.
b.	Advertising fosters new product success and lowers costs.
c.	Advertising reflects the priorities of a society.
d.	Advertising contributes to art and culture in a society.

ANS: B DIF: Moderate REF: p. 125 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Promotion TYP: Application

(Scenario 4-4) Joe Rowan was frustrated to learn that such a large percentage of the price of a car came from advertising expenses. He said to the dealer spokesperson, “If you would stop advertising so much, I could save money on this car. Heck, I would be willing to spend my own time and money to do an Internet search and buy consumer books to find a good car. There’s probably not much difference in this one anyway, you can just say whatever you want in your ads!” Which criticism of advertising is most disconcerting to Joe at this moment?

a.	Advertising promotes materialism.
b.	Advertising creates needs.
c.	Advertising is often offensive.
d.	Advertising wastes resources.

ANS: D DIF: Moderate REF: p. 125 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Promotion TYP: Application

(Scenario 4-4) Joe saw a television ad that stated the Toyota Camry was “the world’s best car for reliability.” The use of such absolute superlatives in advertising is

a.	an illegal use of advertising language.
b.	unethical but legal.
c.	a legal and quite common use of exaggeration.
d.	unfair advertising but not deceptive advertising.

ANS: C DIF: Easy REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

(Scenario 4-4) The Pederson dealership and Toyota share the expense of local advertising in this market. This is an example of ____ advertising.

a.	unfair
b.	vertical cooperative
c.	comparison
d.	corrective

ANS: B DIF: Easy REF: p. 139 OBJ: 4-3

NAT: AACSB Communication | CB&C Model Pricing TYP: Application

(Scenario 4-4) Which government agency might eventually be reviewing the case if Joe felt he should file a complaint about advertising in the automotive industry?

a.	the Consumer Finance Protection Agency
b.	the Federal Communications Commission
c.	the Federal Trade Commission
d.	the Consumer Federation of America

ANS: C DIF: Easy REF: p. 142 OBJ: 4-3

NAT: AACSB Communication | CB&C Model Promotion TYP: Application

Scenario 4-5

Students from several organizations on campus sponsored a forum to debate the pros and cons of advertising. Student organizations representing consumers, journalists, marketers, entrepreneurs, and political scientists all had members in attendance. Following are some of the comments made at the forum.

(Scenario 4-5) One student said, “I am sick and tired of seeing nothing but supermodels advertising women’s clothes. Nobody I know looks like that! They don’t give us any way to know how a normal woman might look in their clothes.” On which of the following “cons” of advertising is this comment most likely based?

a.	Advertising wastes resources.
b.	Advertising perpetuates stereotypes.
c.	Advertising creates needs.
d.	Advertising promotes materialism.

ANS: B DIF: Moderate REF: p. 128 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Promotion TYP: Application

(Scenario 4-5) Several students defended advertising. One said, “Advertising isn’t so bad. It gives us easy access to all kinds of modern conveniences that solve everyday problems, it reduces human labor and housework, and it just make life easier.” Which of the following arguments in favor of advertising best supports this student’s comments?

a.	Advertising addresses a variety of human needs.
b.	Advertising is a source of fulfillment and liberation.
c.	Advertising reflects society’s priorities.
d.	Advertisers are showing much more sensitivity.

ANS: B DIF: Moderate REF: p. 130 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Promotion TYP: Application

(Scenario 4-5) A student said, “Hey, like everybody, I don’t like being interrupted by TV commercials, radio spots, or pages and pages of ads in magazines. But all that advertising gives us a whole world of information, news, and entertainment in so many formats. Without it, we’d be paying for TV shows and radio programs, and way more for newspapers and magazines.” On which of the following “pros” of advertising is this comment most likely based?

a.	Advertising lowers the cost of products.
b.	Advertising is a democratic art.
c.	Advertising reflects society’s priorities.
d.	Advertising fosters a diverse and affordable mass media.

ANS: D DIF: Moderate REF: p. 132 OBJ: 4-1

NAT: AACSB Analytic | CB&C Model Promotion TYP: Application

(Scenario 4-5) One student stood up at the forum and said, “I bought a bike because the ads for this brand said it was ‘the best on the planet.’ I just don’t think that is true. I’ve had quite a few problems with this bike compared to other brands that some of my friends own.” The courts have ruled that when an advertiser uses absolute superlatives in ads like this, consumers

a.	are purposefully deceived.
b.	should understand that it is merely exaggerated language.
c.	should file complaints concerning unethical advertising practices.
d.	are unwitting victims of comparative advertising.

ANS: B DIF: Moderate REF: p. 134 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Customer TYP: Application

(Scenario 4-5) Near the end of the forum, one student said, “I keep getting so much junk mail I can hardly keep up with it. I’ve gotten the same direct mail ad for some new kind of cell phone five or six times now. I tried calling the company but all they want to do is give me more sales pitches! Does anyone actually read these ads? I don’t. And I’m tired of getting them.” Which agency should this student contact to have his name removed from direct mail lists?

a.	the Direct Mail Marketing Association
b.	the Direct Mail Preference Service
c.	the FTC’s Do Not Contact Registry
d.	the FCC’s Consumer Complaint Commission

ANS: B DIF: Moderate REF: p. 148 OBJ: 4-4

NAT: AACSB Communication | CB&C Model Customer TYP: Application

Scenario 4-6

In late 2010, renowned actress Rachel Leigh Cook spoke out against the entertainment industry and the way it portrays celebrities in advertising. Cook, who starred in the popular 90s hit She’s All That, claimed that the airbrushing of celebrities that often takes place before an advertisement is published is a clear case of false advertising. Cook told FoxNews.com, “It breaks my heart to be part of an industry and part of a machine that really pushes out these images and propagates these really terrible standards that are false.” Cook went so far in her criticism to question how falsely editorializing is not considered a crime, and stating that so many young women struggle with identity issues in today’s society because they are striving to be something that does not exist.

(John Dorian, “Rachel Leigh Cook Against Air Brushing, Calls it False Advertising.” International Business Times, October 25, 2010.)

(Scenario 4-6) Advocates of advertising argue that advertising informs consumers, which gives them more power in their purchase decisions. One of the main components of this argument is that

a.	advertisements point out all of the benefits of a product and not the downsides.
b.	advertising drastically reduces product search time, which ultimately reduces product search costs.
c.	advertising creates superficial needs.
d.	advertisements make it nearly impossible for consumers to make decisions.

ANS: B DIF: Easy REF: p. 122 OBJ: 4-1

NAT: AACSB Communication | CB&C Model Customer TYP: Knowledge

(Scenario 4-6) While some argue that advertising promotes materialism, others argue that advertising addresses a number of basic human needs. An advertisement for a high-end clothing company would likely be appealing to which of these needs?

a.	physiological needs
b.	safety needs
c.	self-actualization needs
d.	esteem needs

ANS: D DIF: Moderate REF: p. 126 OBJ: 4-1

NAT: AACSB Reflective Thinking | CB&C Model Customer TYP: Knowledge

(Scenario 4-6) Rachel Leigh Cook is active in a number of organizations that attempt to educate young Americans on some of the cons of the entertainment and advertising industries. One con often addressed in the advertising industry is advertising

a.	perpetuates a number of stereotypes.
b.	only reflects society’s priorities.
c.	addresses a number of basic human needs.
d.	informs the public on various products and issues.

ANS: A DIF: Easy REF: p. 128 OBJ: 4-1

NAT: AACSB Diversity | CB&C Model Promotion TYP: Application

(Scenario 4-6) One of the major issues regarding advertising to children is that

a.	children are inexperienced consumers and easy prey for the sophisticated persuasions of advertisers.
b.	advertising often brings parents and their children closer together.
c.	children are often encouraged to live healthier lifestyle because ads are often focused on healthy foods and exercise.
d.	exposure to advertising at a young age causes children to become knowledgeable about the motivations behind it, which negatively impacts businesses.

ANS: A DIF: Easy REF: p. 134-135 OBJ: 4-2

NAT: AACSB Ethics | CB&C Model Promotion TYP: Knowledge

(Scenario 4-6) There are three primary groups involved in the regulation of advertising. They are

a.	parents, children and schools.
b.	businesses, the government and athletes.
c.	educators, athletes and parents.
d.	consumers, industry organizations and governmental bodies.

ANS: D DIF: Moderate REF: p. 138 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Strategy TYP: Comprehension

ESSAY

How has the concept of “privacy” changed with the advent of the Internet? Discuss issues of privacy as they relate to online e-commerce, and as they have emerged as critical concerns for advertisers, regulators, and consumers. Explain how privacy issues are currently being addressed.

ANS:

The very idea of “privacy” as we once knew it may be a thing of the past. It is now commonly accepted that “behavioral targeting”—the practice of placing online tracking markers on a Web user’s hard drive to track the user’s activities—is here to stay. But Congress and the FTC are carefully scrutinizing the ability of firms that would merge offline databases with individual Web searches and shopping patterns, which would create even more privacy invasion concerns. This is the most pressing issue facing those in direct marketing and e-commerce today. Responsible advertisers do place online privacy notices on websites, but the vast majority of consumers never read these notices. Consumers are becoming more concerned about the use of their private information, particularly the selling of that information by the company that collects it to other companies that want it. And as the text points out in the chapter introduction, social networking sites like Facebook want to sell personal profiles attached to individual’s pages and postings, including names and addresses.

Beyond theses issues of privacy, consumers are also harassed with spam, phishing, and unsolicited email. Spam-filtering software is a common fixture on many home computers. Internet Server Providers including Yahoo!, AOL, and MSN have organized a coalition to fight spam, phishing, and fraud.

Technology has increased the potential for immediate and widespread exchange of personal data. And along with that, technology has also created more ways to invade privacy, in the form of electronic tracking devices that monitor computers or keyboard strokes, and those that identify an individual’s location and whereabouts, such as GPS units. And there is more to come. Currently, cookies do not reveal a person’s name or address. But new technology will create the equivalent of a digital “calling card” wherever an Internet user goes online.

DIF: Difficult REF: p. 120-121| p. 150-151 OBJ: 4-1| 4-5

NAT: AACSB Technology | CB&C Model Online/Computer TYP: Application

Today, fast food restaurants are geared toward enticing families with young children to drop in and buy a quick meal. Some also hand out small items to kids, like coloring books, crayons, and balloons. Beyond the fast food giants, other franchises and businesses have adopted this practice to attract children and assure parents that they are family-friendly establishments — consider your local haircutters, car washes, shoe stores, etc. But in recent years, the corporate fast food franchises have offered giveaways like plastic figurines featuring characters from movies or television programs heavily targeted to young audiences. Outline the concerns that a critic of advertising would have about this practice.

ANS:

A local store owner handing a balloon or a coloring book to a small child seems quaint in today’s world of round-the-clock promotion and branded entertainment. Tying in the toy to a children’s television show or an animated film takes this friendly “giveaway” gesture several steps further into the marketing mix.

Children are easy prey for advertisers. Ads targeted at children, and television shows based on advertisers’ products, often promote superficiality and materialistic values. Some television shows are based on toys and products, and while they are legal, they amount to nothing more than 30-minute commercials. Such programs and related ads can promote conflicts between children asking for products and parents having to say no. Due to extended viewing time and the vulnerability of children, heavy TV viewing by young children has also been associated with violent behavior, childhood obesity, and a breakdown of learning skills. Admittedly, fast food corporations may be easy targets in this regard, and some have at least made an effort to address the issue of cartoon figurines as premiums, as well as concerns over nutrition, children’s meals, and childhood obesity.

DIF: Moderate REF: p. 134-135 OBJ: 4-2

NAT: AACSB Analytic | CB&C Model Customer TYP: Application

What are the three elements that declare an ad to be “deceptive”? What elements declare an ad to be “unfair”? How is “puffery” related to these concepts?

ANS:

While any instance of a possibly unethical advertising message can always be debated, the law is quite clear about deception, but it is much more vague regarding unfairness.

An ad is considered deceptive if the following three elements are present, based on the FTC’s ruling: if it involves a representation, omission, or practice that may mislead the consumer; if this representation, omission, or practice is judged from the perspective of a consumer acting reasonably; and if the representation, omission, or practice is a material one that would affect the consumer’s conduct or decision making about the advertised product or service. Very broadly, deception is defined as the presence of false or misleading statements in an advertisement.

An ad is considered unfair based on 1990s legislation that says it needs to cause substantial injury to consumers that is not avoidable by consumers, and is not outweighed by benefits to consumers or competitors. This allows the FTC to assess both the benefits and costs of advertising, and it rules out reckless behaviors on the part of consumers, before a ruling can be made calling an ad unfair.

An ad includes puffery when superlatives or exaggerations are used that most reasonable people would understand as harmless claims or slogans. While such claims may not be technically “true” (“World’s Best Coffee!”), they are totally legal and are not considered to be either deceptive or unfair.

DIF: Difficult REF: p. 134| p. 138-139 OBJ: 4-2| 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

What are the three broad areas of advertising that are affected by federal regulation? Briefly identify and explain each.

ANS:

The three areas affected by federal regulation involve deception and unfairness, competition, and children.

Issues involving deception and unfairness have historically been difficult to identify and prove. While most people would agree that both of these elements are unacceptable, there will always be differences in opinion as to exactly what is considered deceptive and exactly what is considered unfair. By the 1990s, the FTC and Congress worked together to more adequately define these concepts and the criteria involved.

Issues involving competition involve unfair practices among competitors, including cooperative advertising, comparison advertising, and monopoly power.

Issues involving children involve the nature and content of ads aimed at children, the volume of advertising within children’s programming, and the limits and sensitivities involved in pitching products to those who are unsophisticated regarding consumption and are unaware of the power of persuasion.

DIF: Moderate REF: p. 138-141 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

What are the four types of rulings that the FTC might enact in response to claims of unfairness or deception in an advertisement? Name and briefly define as many as you can, beginning with the most lenient and moving on to the strongest response.

ANS:

The FTC has four options when it responds to claims of unfairness or deception in an advertisement:

A consent order allows an advertiser to agree to stop running a questionable ad without having to admit guilt. It is the simplest and least serious of responses that the FTC can enact.

A cease-and-desist order requires that the advertiser stop running the questionable ad, usually within 30 days so a hearing can be held to determine whether it is truly deceptive or unfair. If a product may have a direct effect on consumer’s health or safety, an immediate cease-and-desist order can be enacted.

An affirmative disclosure requires that the advertiser add important information that had been missing from previous ads, information that might cause consumers to make false assumptions about the product.

An order for corrective advertising requires that the advertiser run new ads that clarify misleading claims or that retract erroneous information that the consumer has been led to believe as true. This is the strongest and most extensive response that the FTC can enact.

DIF: Moderate REF: p. 143 OBJ: 4-3

NAT: AACSB Ethics | CB&C Model Promotion TYP: Comprehension

A complaint concerning an allegedly misleading advertising practice by a carpet-cleaning service in the Houston area is filed with the local Better Business Bureau. Apparently, homeowners are expecting the price shown on the company’s direct mailings and newspaper coupons (a price confirmed at the time the appointment is made) but are quoted a much higher fee once the crew arrives and “inspects” the carpets. The company’s ads promise the latest in “green” cleaning materials and industrial techniques, but the cleaning fluids and equipment used by the crew are also suspect. Outline the path the complaint would take if it were to eventually arrive at the FTC. Specifically, list the organizations it would pass through, and in general terms, the actions that would need to be taken by each organization for the complaint to be forwarded on to federal regulators.

ANS:

In a situation like this, the local BBB reviews the issue, often sent in the form of a complaint by consumers or competitors. It sends the complaint to the National Advertising Division (NAD) of the Council of Better Business Bureaus. If the NAD staff cannot resolve the complaint with the advertiser, in this case the carpet-cleaning service, it is passed along to the National Advertising Review Board (NARB). Its review panel hears the advertiser’s case, reviews other evidence, and deliberates. It may dismiss the case, or it may convince the cleaning service to change the wording in its advertising. If it does neither, it will then publicly identify the case, the advertiser, and its findings, and then forward the complaint to the FTC.

DIF: Difficult REF: p. 146-147 OBJ: 4-4

NAT: AACSB Ethics | CB&C Model Promotion TYP: Application

Eazyquizes

Advertising And Integrated Brand Promotion 6th Edition By Thomas O’Guinn – Test Bank

Description

Related

Reviews

Advertising And Integrated Brand Promotion 6th Edition By Thomas O’Guinn – Test Bank

Description

Related

Reviews

Related products

Advertising and Integrated Brand Promotion 8th Edition By Thomas O’Guinn – Test Bank

Advertising Promotion and Other Aspects of Integrated Marketing Communications 8th Edition Terence A. Shimp – Test Bank

M Advertising 3rd Edition By William Arens – Test Bank

Advertising Promotion and Other Aspects of Integrated Marketing Communications 9th Edition By Terence A. Shimp – Test Bank