Advertising Promotion and Other Aspects of Integrated Marketing Communications 9th Edition By Terence A. Shimp – Test Bank

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Advertising Promotion and Other Aspects of Integrated Marketing Communications 9th Edition By Terence A. Shimp – Test Bank

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Chapter 2—Enhancing Brand Equity and Accountability

 

TRUE/FALSE

 

1. A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or groups of sellers and to differentiate them from those of competition.

 

ANS:  T                    PTS:   1

 

2. All organizations and their products can be considered brands.

 

ANS:  T                    PTS:   1

 

3. The concept of brand equity is considered only from the perspective of the customer.

 

ANS:  F                    PTS:   1

 

4. Brand equity occurs when the consumer considers two competing brands to be similar.

 

ANS:  F                    PTS:   1

 

5. A firm-based viewpoint of brand equity focuses on outcomes extending from efforts to enhance a brand’s value to is various stakeholders.

 

ANS:  T                    PTS:   1

 

6. Revenue premium is defined as the revenue differential between a branded item and a corresponding private labeled brand.

 

ANS:  T                    PTS:   1

 

7. Many private-label products possess levels of quality that are equivalent to manufacturers’ national brands.

 

ANS:  T                    PTS:   1

 

8. From the perspective of the customer, brand preference is the basic dimension of brand equity.

 

ANS:  F                    PTS:   1

 

9. Brand equity from the customer’s perspective consists of two forms of brand-related knowledge: brand awareness and brand image.

 

ANS:  T                    PTS:   1

 

10. Brand image is an issue of whether a brand name comes to mind when consumers think about a particular product category and the ease with which the name is evoked.

 

ANS:  F                    PTS:   1

 

11. A brand has no equity if consumers are unfamiliar with it.

 

ANS:  T                    PTS:   1

 

12. Brand recall reflects a relatively superficial level of awareness, whereas brand recognition indicates a deeper form of awareness.

 

ANS:  F                    PTS:   1

 

13. The marcom imperative is to move brands from a state of unawareness, to recognition, on to recall, and ultimately to top-of-mind awareness (TOMA).

 

ANS:  T                    PTS:   1

 

14. Brand image can be thought of in terms of the types of associations that come to the customer’s or consumer’s mind when contemplating a particular brand.

 

ANS:  T                    PTS:   1

 

15. Brand associations can be conceptualized in terms of type, favorability, strength, and uniqueness.

 

ANS:  T                    PTS:   1

 

16. Research has identified ten personality dimensions that describe most brands.

 

ANS:  F                    PTS:   1

 

17. Brands scoring high on the sincerity dimension are considered reliable, intelligent, and successful.

 

ANS:  F                    PTS:   1

 

18. The objective of marketing communication is to deemphasize brand equity.

 

ANS:  F                    PTS:   1

 

19. By trying and using brands, consumers learn how good (or bad) they are and what benefits they are (in)capable of delivering, which is known as the leveraging approach to enhancing brand equity.

 

ANS:  F                    PTS:   1

 

20. Marketing communicators draw meaning from the culturally constituted world and transfer that meaning to consumer goods.

 

ANS:  T                    PTS:   1

 

21. A brand can leverage associations by connecting itself with other brands, places, things, and people.

 

ANS:  T                    PTS:   1

 

22. Co-branding occurs when two or more brands enter into a partnership that potentially serves to enhance both brands’ equity and profitability.

 

ANS:  T                    PTS:   1

 

23. A potential downside for the host brand with respect to ingredient branding is that the equity of the ingredient brand might be so great that it overshadows the host brand.

 

ANS:  T                    PTS:   1

 

24. One major by-product of efforts to increase a brand’s equity is that consumer brand loyalty might also increase, which in turn, could positively influence long-term growth and profitability.

 

ANS:  T                    PTS:   1

 

25. The EquiTrend survey asks respondents to rate a number of brands in terms of two dimensions: quality and salience.

 

ANS:  T                    PTS:   1

 

26. Successful brands employ just one or two marcom tools in order to satisfy the brand’s positioning strategy.

 

ANS:  F                    PTS:   1

 

27. One trait shared by the world’s strongest brands is that the company monitors sources of brand equity through ongoing brand audits or tracking studies.

 

ANS:  T                    PTS:   1

 

28. Enhancing brand equity is a means of moving customers to favorable action toward the brand.

 

ANS:  T                    PTS:   1

 

29. The vast majority of marketing executives and marketing academics are against gauging the effect of marcom efforts in terms of the return on marketing investment, or ROMI, because it is almost impossible to measure.

 

ANS:  F                    PTS:   1

 

30. Measuring marcom effectiveness is relatively simple, and most organizations are currently doing a sophisticated job of doing so.

 

ANS:  F                    PTS:   1

 

31. One difficulty with measuring marcom effectiveness is the identification of an appropriate measure, or metric, of effectiveness.

 

ANS:  T                    PTS:   1

 

32. Whatever the measure chosen, any effort to meaningfully assess marcom performance requires having data that are reliable and valid.

 

ANS:  T                    PTS:   1

 

33. A technique called promotion-mix modeling is increasingly being used to determine the relative effect each marcom program element has on sales volume compared to the effects of other elements.

 

ANS:  F                    PTS:   1

 

34. Marketing-mix modeling employs multivariate regression analysis to estimate the effects that the various advertising and promotion elements have in driving sales volume.

 

ANS:  T                    PTS:   1

 

35. To employ marketing-mix modeling, a relatively long series of longitudinal data (i.e., two-year period) is required.

 

ANS:  T                    PTS:   1

 

MULTIPLE CHOICE

 

1. A _____ is a name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers to differentiate them from those of competition.

a.	trademark
b.	market
c.	tradename
d.	brand
e.	guarantee

 

 

ANS:  D                    PTS:   1

 

2. A _____ is everything that one company’s particular offering stands for in comparison to competitors’ offerings.

a.	trademark
b.	logo
c.	symbol
d.	brand
e.	sign

 

 

ANS:  D                    PTS:   1

 

3. The concept of brand equity is considered from which perspective?

a.	from the perspective of the organization that owns the brand
b.	from the vantage point of the customer
c.	from the perspective of the other brands in the product category
d.	a and b only
e.	a, b, and c

 

 

ANS:  D                    PTS:   1

 

4. From the perspective of the firm that owns the brand, which of the following is a positive outcome of increased brand equity?

a.	higher market share
b.	increased brand loyalty
c.	ability to charge premium prices
d.	earning a revenue premium
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

5. As a brand’s equity increases, its elasticity of demand _____.

a.	becomes less elastic
b.	becomes more elastic
c.	becomes less inelastic
d.	remains constant
e.	increases

 

 

ANS:  A                    PTS:   1

 

6. The revenue differential between a branded item and a corresponding private labeled item is known as _____.

a.	market premium
b.	price premium
c.	revenue premium
d.	profit premium
e.	equity premium

 

 

ANS:  C                    PTS:   1

 

7. Tide laundry detergent is a well known brand that sells for approximately $8.00 for a 64 ounce bottle, and Procter & Gamble usually sells 2 million of these sizes each year. An average private label store brand costs $6.00 for the same size, and typically 1 million are sold each year. What is Tide’s revenue premium?

a.	$2.00
b.	$1 million
c.	$6 million
d.	$10 million
e.	$16 million

 

 

ANS:  D                    PTS:   1

 

8. A research study involving McDonald’s products discovered a new form of firm-based brand equity that has been labeled _____ brand equity.

a.	name-recognition
b.	taste-premium
c.	market-share
d.	revenue-premium
e.	price-premium

 

 

ANS:  B                    PTS:   1

 

9. From the perspective of the customer or consumer, _____ is the extent to which they are familiar with the brand and have stored in their memory favorable, strong, and unique brand associations.

a.	brand awareness
b.	brand image
c.	brand preference
d.	brand equity
e.	brand effectiveness

 

 

ANS:  D                    PTS:   1

 

10. Brand equity from the customer’s perspective consists of _____.

a.	brand awareness and brand image
b.	brand awareness and brand preference
c.	brand image and brand insistence
d.	brand image and brand tolerance
e.	brand awareness and brand tolerance

 

 

ANS:  A                    PTS:   1

 

11. _____ refers to the extent to which a brand name comes to mind when consumers think about a particular product category and the ease with which the name is evoked.

a.	Brand image
b.	Brand awareness
c.	Brand loyalty
d.	Brand preference
e.	Brand knowledge

 

 

ANS:  B                    PTS:   1

 

12. The basic dimension of brand equity is _____.

a.	brand image
b.	brand preference
c.	brand tolerance
d.	brand insistence
e.	brand awareness

 

 

ANS:  E                    PTS:   1

 

13. What is the initial challenge for new brands?

a.	achieving brand awareness
b.	enhancing brand image
c.	achieving brand preference
d.	achieving brand insistence
e.	building revenue premium

 

 

ANS:  A                    PTS:   1

 

14. Brand _____ reflects a relatively superficial level of awareness, whereas brand _____ indicates a deeper form of awareness.

a.	image; equity
b.	equity; image
c.	recognition; recall
d.	recall; recognition
e.	associations; image

 

 

ANS:  C                    PTS:   1

 

15. Bill is given a list of brands of shaving products by a researcher and is asked to mark all those that he is aware of. Which level of awareness is this assessing?

a.	recall
b.	recognition
c.	aided recall
d.	unaided recall
e.	positive awareness

 

 

ANS:  B                    PTS:   1

 

16. Maria is asked by a market researcher to list all the brands of toothpaste she can think of. Which type of awareness is this assessing?

a.	recall
b.	recognition
c.	positive awareness
d.	free-association awareness
e.	aided recognition

 

 

ANS:  A                    PTS:   1

 

17. The pinnacle of brand-name awareness that exists when your company’s brand is the first brand that consumers recall when thinking about brands in a particular product category is known as _____.

a.	top-of-category awareness (TOCA)
b.	recognition
c.	tip-of-the-tongue awareness (TOTA)
d.	top-of-mind awareness (TOMA)
e.	top-of-class awareness (TOCA)

 

 

ANS:  D                    PTS:   1

 

18. Which of the following statements is true regarding brand awareness?

a.	Only consumer-oriented (B2C) firms must be concerned with building brand awareness.
b.	Most consumers are able to retrieve a brand name from memory without any reminders.
c.	There are two levels of brand awareness: primary and secondary.
d.	Brand recall reflects a relatively superficial level of awareness, whereas brand recognition indicates a deeper form of awareness.
e.	Although building brand awareness is a necessary step toward brand equity enhancement, it is insufficient.

 

 

ANS:  E                    PTS:   1

 

19. The types of associations that come to the consumer’s mind when contemplating a particular brand is known as _____.

a.	brand image
b.	brand equity
c.	brand awareness
d.	brand cognitions
e.	brand parity

 

 

ANS:  A                    PTS:   1

 

20. Maria is asked by a market researcher to tell him the particular thoughts and feelings she has about Starbuck’s coffee. A particular thought or feeling that comes to Maria’s mind is known as a(n) _____.

a.	brand dimension
b.	cognition
c.	brand link
d.	association
e.	think-feel linkage

 

 

ANS:  D                    PTS:   1

 

21. Brand associations can be conceptualized in terms of _____.

a.	type
b.	favorability
c.	strength
d.	uniqueness
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

22. Research has identified _____ dimensions that seem to capture the personalities of a variety of consumer brands.

a.	four
b.	five
c.	six
d.	seven
e.	eight

 

 

ANS:  B                    PTS:   1

 

23. Which of the following is NOT a personality dimension that describes most brands?

a.	sincerity
b.	excitement
c.	competence
d.	innocence
e.	ruggedness

 

 

ANS:  B                    PTS:   1

 

24. This dimension includes brands that are down-to-earth, honest, wholesome, and cheerful.

a.	excitement
b.	sophistication
c.	competence
d.	sincerity
e.	ruggedness

 

 

ANS:  D                    PTS:   1

 

25. Toyota automobiles are regarded by consumers as reliable, intelligent, and successful. The levels of satisfaction of Toyota owners is at or near the top of satisfaction ratings. Which brand-related personality dimension best describes Toyota?

a.	excitement
b.	competence
c.	sophistication
d.	ruggedness
e.	innocence

 

 

ANS:  B                    PTS:   1

 

26. Luxury items, such as Rolex watches, generally score high on which brand-related personality dimension?

a.	Sincerity
b.	Excitement
c.	Competence
d.	Sophistication
e.	Ruggedness

 

 

ANS:  D                    PTS:   1

 

27. Which personality dimension has General Motors attempted to create for its repair services through its hypothetical “Mr. Goodwrench,” who represents the name and “face” of the trained technicians who work in thousands of GM dealerships?

a.	sincerity
b.	excitement
c.	competence
d.	sophistication
e.	ruggedness

 

 

ANS:  A                    PTS:   1

 

28. What is necessary to create favorable, strong, and unique associations about a brand?

a.	heavy mass media advertising
b.	co-branding
c.	sustained marketing communications
d.	ingredient-branding
e.	brand preference

 

 

ANS:  C                    PTS:   1

 

29. Which of the following is NOT an approach by which brand equity is enhanced?

a.	brand awareness approach
b.	speak-for-itself approach
c.	message-driven approach
d.	leveraging approach
e.	All of these are approaches.

 

 

ANS:  A                    PTS:   1

 

30. Consumers learn how good (or bad) a brand is and what benefits it is (in)capable to delivering by trying and using a brand. Which approach to enhancing brand equity is this known as?

a.	message-driven approach
b.	leveraging approach
c.	trial-and-error approach
d.	speak-for-itself approach
e.	initial approach

 

 

ANS:  D                    PTS:   1

 

31. In which approach to enhancing brand equity do marcom practitioners attempt to build advantageous associations through creative, attention getting, and believable messages?

a.	speak-for-itself approach
b.	message-driven approach
c.	leveraging approach
d.	shotgun approach
e.	cast-a-wide-net approach

 

 

ANS:  B                    PTS:   1

 

32. Brand associations can be shaped and equity enhanced through marketing communications that associate the brand with people, places, and “things” that are available to consumers. This approach is known as the _____.

a.	speak-for-itself approach
b.	message-driven approach
c.	leveraging approach
d.	culturally constituted approach
e.	meaning transfer approach

 

 

ANS:  C                    PTS:   1

 

33. People learn cultural values, form beliefs, and become familiar with the physical manifestations, or artifacts, of these values and beliefs through _____.

a.	marcom
b.	media exposure
c.	socialization
d.	brand awareness
e.	active synthesis

 

 

ANS:  C                    PTS:   1

 

34. When a marketing communicator connects a consumer good with a representation of the culturally constituted world, s/he is engaging in _____.

a.	lifestyle marketing
b.	sales promotion
c.	socialization
d.	point-of-purchase advertising
e.	meaning transfer

 

 

ANS:  E                    PTS:   1

 

35. Marketing communicators _____ meaning and create associations for their brands by connecting them with other objects that already possess well-known meaning.

a.	promote
b.	locate
c.	leverage
d.	advertise
e.	obtain

 

 

ANS:  C                    PTS:   1

 

36. Which marcom tool is an especially important instrument of meaning transfer?

a.	sales promotion
b.	personal selling
c.	advertising
d.	public relations
e.	frequency programs

 

 

ANS:  C                    PTS:   1

 

37. Lee Michaels is a national chain jewelry store found in many malls across the U.S. Laurie went in to look at the watches, but she was unfamiliar with some of the brands. The salesperson told her that they were all Swiss-made, meaning they were made in Switzerland, which is known worldwide for the quality of the timepieces produced there. From which source are these brands leveraging their brand meaning?

a.	other brands
b.	people
c.	places
d.	things
e.	names

 

 

ANS:  C                    PTS:   1

 

38. Which of the following is a source by which brand meaning can be leveraged?

a.	other brands
b.	places
c.	things
d.	people
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

39. When two or more brands enter into a partnership that potentially serves to enhance both brands’ equity and profitability, _____ has occurred.

a.	cross-branding
b.	co-branding
c.	multi-branding
d.	family-branding
e.	house-branding

 

 

ANS:  B                    PTS:   1

 

40. Kellogg’s, a cereal manufacturer, and Disney and Pixar have partnered in brands of cereal targeted to children that are named after their movies, such as Finding Nemo and The Incredibles. What is this alliance known as?

a.	cross-branding
b.	ingredient branding
c.	family-branding
d.	co-branding
e.	multi-branding

 

 

ANS:  D                    PTS:   1

 

41. The most important requirement for co-branding is that _____.

a.	there is a logical fit between the two brands
b.	the two brands are similar in price
c.	the two products are not directly competing against each other
d.	the two products have the same target market
e.	the two products are manufactured by the same firm

 

 

ANS:  A                    PTS:   1

 

42. An example of _____ is the sticker on a Dell computer that says “Intel Inside.”

a.	cross-branding
b.	multi-branding
c.	reference branding
d.	ingredient branding
e.	planned branding

 

 

ANS:  D                    PTS:   1

 

43. The EquiTrend survey asks respondents to rate a number of brands in terms of which two dimensions?

a.	quality and personality
b.	awareness and image
c.	familiarity and quality
d.	image and quality
e.	image and preference

 

 

ANS:  C                    PTS:   1

 

44. Creating and increasing brand loyalty results in a corresponding increase in the value of the _____.

a.	firm
b.	target market
c.	product position
d.	market share
e.	trustmark

 

 

ANS:  E                    PTS:   1

 

45. Which of the following is NOT a trait shared by the world’s strongest brands?

a.	The brand excels at delivering the benefits customers truly desire.
b.	The brand stays relevant.
c.	The pricing system is based on consumers’ perceptions of value.
d.	The brand relies on mass media advertising to satisfy the brand’s positioning strategy.
e.	The brand portfolio and hierarchy make sense.

 

 

ANS:  D                    PTS:   1

 

46. One trait shared by the world’s strongest brands is that the brand’s managers understand what the brand means to _____.

a.	the news media
b.	competitors
c.	customers
d.	them
e.	stock analysts

 

 

ANS:  C                    PTS:   1

 

47. The objective of marketing communications is to enhance brand equity as a means of _____.

a.	defining the marketing mix
b.	moving customers to favorable action toward the brand
c.	increasing short-term sales
d.	reducing the advertising budget
e.	reducing the promotional budget

 

 

ANS:  B                    PTS:   1

 

48. From the marketer’s standpoint, marcom’s objective is to ultimately affect _____.

a.	brand equity
b.	brand awareness
c.	brand image
d.	sales volume and revenue
e.	investment

 

 

ANS:  D                    PTS:   1

 

49. The effect of marcom, or of its specific elements such as advertising, can be gauged in terms of whether it generates a reasonable _____.

a.	return on marketing investment (ROMI)
b.	return on customer investment (ROCI)
c.	return on equity investment (ROEI)
d.	return on brand investment (ROBI)
e.	return on sales investment (ROSI)

 

 

ANS:  A                    PTS:   1

 

50. Which of the following is a motivation underlying the increased focus on measuring marketing performance?

a.	greater demands for accountability on the marketing function from the CEO, the Board, and other executives
b.	the imperative for the CMO to get better at what they do
c.	required by the IRS to report the gains from marketing investment
d.	a and b only
e.	a, b, and c

 

 

ANS:  D                    PTS:   1

 

51. Which of the following is NOT a reason for the difficulty in measuring marcom effectiveness?

a.	lack of ability by marcom practitioners
b.	obstacles in identifying an appropriate measure, or metric, of effectiveness
c.	complications with getting people throughout the organization to agree that a particular measure is the most appropriate
d.	snags with gathering accurate data to assess effectiveness
e.	problems with determining the exact effect that specific marcom elements have on the measure that has been selected to indicate effectiveness

 

 

ANS:  A                    PTS:   1

 

52. Specific measures that are used to judge marcom effectiveness are also called _____.

a.	variables
b.	metrics
c.	coefficients
d.	models
e.	variances

 

 

ANS:  B                    PTS:   1

 

53. Harold is trying to determine the appropriate metric his company should use to gauge the effectiveness of its marcom efforts. Which of the following is a possible option?

a.	brand awareness
b.	attitudes toward the brand
c.	purchase intentions
d.	sales volume
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

54. A recent study by the Association of National Advertisers found that among the most common metrics used for measuring ROMI was _____.

a.	change in consumer purchase behavior
b.	incremental sales revenue generated by marketing activities
c.	increases in S-O-M compared to changes in S-O-V
d.	changes in brand loyalty generated by advertising
e.	changes in brand image with increased expenditure on sales promotion

 

 

ANS:  B                    PTS:   1

 

55. Why is it difficult to gain agreement on a suitable system for measuring marcom performance?

a.	People are uncooperative.
b.	People in other disciplines do not understand marketing and marketing communications
c.	Individuals from different backgrounds and with varied organizational interests often see the “world” differently or operate with varying ideas of what best indicates suitable performance.
d.	There is so little difference among the measures that it is difficult for individuals outside of marketing to understand them.
e.	If it isn’t in terms of dollars, others in the organization don’t even want to look at it.

 

 

ANS:  C                    PTS:   1

 

56. Whatever the measure chosen, any effort to meaningfully assess marcom performance necessitates having data that are _____.

a.	short-term and long-term
b.	communication-based and sales-based
c.	representative and normal
d.	normal and bi-modal
e.	reliable and valid

 

 

ANS:  E                    PTS:   1

 

57. What is the most complicated problem of all when assessing marcom performance?

a.	How much data is necessary?
b.	How much relative effect does each program element have compared to the effects of other elements?
c.	How does one assess reliability and validity?
d.	How can a researcher be sure that the data are appropriate for the metric being assessed?
e.	How does one account for sampling and measurement errors?

 

 

ANS:  B                    PTS:   1

 

58. Which technique is increasingly being used to assess the relative effect each program element has compared to the effects of other elements?

a.	marketing-mix modeling
b.	structural equation modeling
c.	marketing optimization modeling
d.	multidimensional scaling
e.	calibration modeling

 

 

ANS:  A                    PTS:   1

 

59. Marketing-mix modeling typically employs which statistical technique to estimate the effects that the various marcom elements have in driving sales volume?

a.	cluster analysis
b.	structural equation modeling
c.	multivariate regression analysis
d.	ANOVA
e.	MANOVA

 

 

ANS:  C                    PTS:   1

 

60. Sam is tasked with employing marketing-mix modeling to determine the effectiveness of various marcom elements in affecting sales volume. What will Sam need to conduct this analysis?

a.	at least five observations for each element assessed along with the level of sales for those time periods
b.	a relatively long series of longitudinal data, such as two years, indicating the level of sales during that period along with corresponding marcom expenditures for each program element
c.	at least ten observations for each element assessed along with the level of sales for those time periods
d.	over 1,000 observations for each element assessed along with the level of sales for those time periods
e.	parameter estimates of the individual effects the various marcom elements have on sales

 

 

ANS:  B                    PTS:   1

 

61. Which of the following statements is FALSE regarding marketing-mix modeling?

a.	In order to employ marketing-mix modeling, a relatively long series of longitudinal data (i.e., for a two-year period) is required.
b.	Marketing-mix modeling employs well known statistical techniques (e.g., multivariate regression analysis) to estimate the effects that the various marcom elements have in driving sales volume.
c.	Parameter estimates indicate the individual effects the various marcom elements have on sales.
d.	Managers learn from such analysis which elements are outperforming others and can use this information to shift budgets from program element to element.
e.	Once the model is estimated, results can be generalized to other situations.

 

 

ANS:  E                    PTS:   1

 

62. Managers learn from the analytic aspect of marketing mix modeling which marcom elements are outperforming others and can then use this statistical information to _____.

a.	shift budgets from program element to element
b.	reposition products to better meet the needs of consumers
c.	develop new products and services
d.	construct more appropriate messages for their target market
e.	identify new markets for their products and/or services

 

 

ANS:  A                    PTS:   1

 

63. In using marketing-mix modeling, the finer, or more disaggregated, the data the better the analysis can be in determining which specific marketing mix elements are most and least effective in _____.

a.	generating awareness
b.	creating brand loyalty
c.	developing new markets
d.	reaching the current target market
e.	driving sales

 

 

ANS:  E                    PTS:   1

 

ESSAY

 

1. Discuss the benefits of brand equity from the firm’s perspective.

 

ANS:

The firm-based viewpoint of brand equity focuses on outcomes extending from efforts to enhance a brand’s value to its various stakeholders. As the value, or equity, of a brand increases, various positive outcomes result:

1.	Achieving a higher market share.
2.	Increasing brand loyalty.
3.	Being able to charge premium prices. A brand’s elasticity of demand becomes less elastic as its equity increases.
4.	Earning a revenue premium, which is defined as the revenue differential between a branded item and a corresponding private labeled item. With revenue equaling the product of a brand’s net price ´ volume, a branded good enjoys a revenue premium over a corresponding private labeled item to the degree it can charge a higher price and/or generate greater sales volume.

 

 

PTS:   1

 

2. Name and describe the two forms of brand knowledge from a consumer perspective.

 

ANS:

Brand equity from the customer’s perspective consists of two forms of brand-related knowledge:

1.

Brand awareness, which is an issue of whether a brand name comes to mind when consumers think about a particular product category and the ease with which the name is evoked. It is the basic dimension of brand equity. From the vantage point of an individual consumer, a brand has no equity unless the consumer is at least aware of the brand. The two levels of awareness are brand recognition and recall. Brand recognition reflects a relatively superficial level of awareness, whereas brand recall indicates a deeper form of awareness. The marcom imperative is to move brands from a state of unawareness, to recognition, on to recall, and ultimately to top-of-mind awareness (TOMA). This pinnacle of brand-name awareness (i.e., TOMA status) exists when your company’s brand is the first that consumers recall when thinking about brands in a particular product category. Although building brand awareness is a necessary step toward brand equity enhancement, it is insufficient.

2.

Brand image can be thought of in terms of the types of associations that come to the customer’s or consumer’s mind when contemplating a particular brand. An association is simply the particular thoughts and feelings that a consumer has about a brand. These associations can be conceptualized in terms of type, favorability, strength, and uniqueness. Research has identified five personality dimensions that describe most brands: sincerity, excitement, competence, sophistication, and ruggedness.

 

 

PTS:   1

 

3. Briefly discuss the five dimensions of brand personality.

 

ANS:

The five dimensions of brand personality are:

1.	Sincerity. This dimension includes brands that are down-to-earth, honest, wholesome, and cheerful.
2.	Excitement. Brands scoring high on the excitement dimension are perceived as daring, spirited, imaginative, and up-to-date.
3.	Competence. Brands scoring high on this personality dimension are considered reliable, intelligent, and successful.
4.	Sophistication. Brands that are considered upper class and charming score high on the sophistication dimension.
5.	Ruggedness. Rugged brands are thought of as tough and outdoorsy.

 

 

PTS:   1

 

4. Name and describe the three ways by which brand equity is enhanced.

 

ANS:

The three ways by which brand equity is enhanced are:

1.	Speak-for-itself approach. With this approach, favorable (or perhaps unfavorable) associations are built merely by allowing the brand to “speak for itself.” That is, by trying and using brands, consumers learn how good (or bad) they are and what benefits they are (in)capable of delivering.
2.	Message-driven approach. Marcom practitioners in their various capacities can build (or attempt to build) advantageous associations via the dint of repeated claims about the features a brand possesses and/or the benefits it delivers.
3.	Leveraging approach. Brand associations can be shaped and equity enhanced by leveraging positive associations already contained in the world of people, places, and things, even other brands, that are available to consumers. The culture and social systems in which marketing communications takes place are loaded with meaning. Marketing communicators draw meaning from the culturally constituted world and transfer that meaning to consumer goods, and advertising is an especially important instrument of meaning transfer.

 

 

PTS:   1

 

5. Discuss the reasons accounting for the difficulty in measuring marcom effectiveness.

 

ANS:

Several reasons account for the difficulty in measuring marcom effectiveness:

1.	Choosing a metric. An initial problem is one of determining which specific measures (also called metrics) should be used to judge marcom effectiveness. Possible options include brand awareness, attitudes toward the brand, purchase intentions, and sales volume. There typically is no magic bullet by which marcom effectiveness can be judged unambiguously and perfectly. All measures/metrics are flawed in some way.
2.	Gaining agreement. There generally is no consensus. This is not because people are necessarily uncooperative; rather, individuals from different backgrounds and with varied organizational interests often see the “world” differently or operate with varying ideas of what best indicates suitable performance.
3.	Collecting accurate data. Whatever the measure chosen, any effort to meaningfully assess marcom performance necessitates having data that are reliable and valid.
4.	Calibrating specific effects. Ultimately, brand managers and other marketing executives are interested in knowing more than just how effective the overall marcom program was. They also need to identify the relative effectiveness of individual program elements so that even better decisions can be made in the future as to how best to allocate resources.

 

 

Chapter 4—Environmental, Regulatory, and Ethical Issues

 

TRUE/FALSE

 

1. Marketing communicators in their various capacities rarely are faced with decisions that have ethical ramifications.

 

ANS:  F                    PTS:   1

 

2. For marketing communicators, ethics involves matters of right and wrong, or moral, conduct pertaining to any aspect of marketing communications.

 

ANS:  T                    PTS:   1

 

3. Especially open to ethical debate is the practice of targeting products and communications efforts to segments that, for various psychosocial and economic reasons, are vulnerable to marketing communications, such as children and economically disadvantaged groups.

 

ANS:  T                    PTS:   1

 

4. The FTC believes that its authority extends to prohibiting the entertainment industry from targeting children with advertisements for violent films, video games, and music, even if the ads are not deemed deceptive or unfair.

 

ANS:  F                    PTS:   1

 

5. Billboard advertising of alcohol products is restricted under the Master Settlement Agreement between the federal government and firms in the alcohol industry.

 

ANS:  F                    PTS:   1

 

6. The FDA regulates the brewing and liquor industries.

 

ANS:  F                    PTS:   1

 

7. Over 60 percent of advertising is found to be deceptive.

 

ANS:  F                    PTS:   1

 

8. For subconscious priming to be effective, the primed topic must be compatible with the individual’s current need states.

 

ANS:  T                    PTS:   1

 

9. One criticism of advertising is that it creates and perpetuates stereotypes.

 

ANS:  T                    PTS:   1

 

10. The mission of the National Association of Advertising (NAA) is to improve and strengthen the ad agency business, to advocate advertising, to influence public policy, to resist advertising-related legislation that it regards as unwise or unfair, and to work with government regulators to achieve desirable social and civic goals.

 

ANS:  F                    PTS:   1

 

11. The way firms confront negative publicity has important strategic as well as ethical ramifications.

 

ANS:  T                    PTS:   1

 

12. Four aspects of packaging that involve ethical issues include label information, packaging graphics, packaging safety, and environmental implications of packaging.

 

ANS:  T                    PTS:   1

 

13. Slotting allowances require manufacturers to pay retailers a per-store fee for their willingness to handle a new stock unit from the manufacturer.

 

ANS:  T                    PTS:   1

 

14. Consumers, as well as marketers, can be guilty of unethical behavior in the area of sales promotions.

 

ANS:  T                    PTS:   1

 

15. Consumer privacy is an ethical issue that transcends all marcom activities.

 

ANS:  F                    PTS:   1

 

16. The Golden Rule test states that you should take actions that would be viewed as proper by an objective panel of your professional colleagues.

 

ANS:  F                    PTS:   1

 

17. Regulation is always justified.

 

ANS:  F                    PTS:   1

 

18. A regulatory disadvantage is increased prices resulting from a reduction in a seller’s “informational market power.”

 

ANS:  F                    PTS:   1

 

19. Costs of regulation include cost of complying, enforcement costs, and costs resulting from unintended side effects.

 

ANS:  T                    PTS:   1

 

20. The FTC is the U.S. government agency with primary responsibility for regulating advertising at both the federal and state levels.

 

ANS:  F                    PTS:   1

 

21. A false claim is, by definition, deceptive.

 

ANS:  F                    PTS:   1

 

22. According to the FTC, a misrepresentation is said to occur when qualifying information necessary to prevent a practice, claim, representation, or reasonable expectation or belief from being misleading is not disclosed.

 

ANS:  F                    PTS:   1

 

23. A material representation involves information that is important to consumers and that is likely to influence their choice or conduct regarding a product.

 

ANS:  T                    PTS:   1

 

24. Unfair advertising is also deceptive advertising.

 

ANS:  F                    PTS:   1

 

25. Corrective advertising is designed to punish a firm for deceiving consumers.

 

ANS:  F                    PTS:   1

 

26. The FTC is responsible for regulating information on the packages of food and drug products.

 

ANS:  F                    PTS:   1

 

27. The National Association of Attorneys General has played an active role in the regulation of marketing communications.

 

ANS:  T                    PTS:   1

 

28. The advertising clearance process is a form of self-regulation undertaken by ad media that takes place behind the scenes before a commercial or other advertisement reaches consumers.

 

ANS:  T                    PTS:   1

 

29. AAAA is a self-regulatory group that monitors children’s television programming and commercials.

 

ANS:  F                    PTS:   1

 

30. The NAD cannot impose fines on deceptive advertisers, but the NARB can.

 

ANS:  F                    PTS:   1

 

31. Green Seal, a Washington, D.C., nonprofit organization, has developed standards and awarded seals to companies that meet environmental standards.

 

ANS:  T                    PTS:   1

 

32. Cause-oriented marketing is practiced when companies sponsor or support worthy causes.

 

ANS:  T                    PTS:   1

 

33. One of the FTC’s guidelines for environmental marketing claims states that “claims should not overstate an environmental attribute or benefit, either expressly or by implication.”

 

ANS:  T                    PTS:   1

 

34. The major green communications efforts involve advertisements that promote green products, environmentally friendly packaging, seal-of-approval programs that promote green products, cause-oriented communication efforts that support green products, and point-of-purchase display materials that are environmentally efficient.

 

ANS:  T                    PTS:   1

 

35. In Germany, the White Angel seal represents a promise to consumers that a product carrying an environment claim is in fact legitimate.

 

ANS:  F                    PTS:   1

 

MULTIPLE CHOICE

 

1. In a marketing communications context, _____ involves matters of right and wrong, or moral, conduct pertaining to any aspect of marketing communications.

a.	regulation
b.	responsibility
c.	social responsibility
d.	social awareness
e.	ethics

 

 

ANS:  E                    PTS:   1

 

2. Many critics consider it unethical to market food products to children, especially through practices using cartoon characters to sell sugared cereals and non-nutritious snacks because _____.

a.	obesity is a major problem with America’s children
b.	these products are expensive
c.	children do not have the maturity to make nutritious food choices
d.	children believe everything they see and hear
e.	the ads are deceptive

 

 

ANS:  A                    PTS:   1

 

3. There is considerable concern regarding the marketing of beer and other alcoholic beverages to teens and young adults. A study by a watchdog group at Georgetown University reported that _____ of alcohol advertising was more likely seen by youths than adults.

a.	three-quarters
b.	less than five percent
c.	seventy percent
d.	one-half
e.	one-quarter

 

 

ANS:  E                    PTS:   1

 

4. The _____ has issued a regular series of reports, titled Marketing Violent Entertainment to Children, that criticizes the entertainment industry for targeting children with advertisements for violent films, video games, and music.

a.	FDA
b.	NAD
c.	CARU
d.	FTC
e.	NARC

 

 

ANS:  D                    PTS:   1

 

5. In the past, billboards advertising tobacco and alcohol were disproportionately more likely to appear in _____.

a.	Southern states
b.	rural areas
c.	California
d.	inner-city areas
e.	suburban areas

 

 

ANS:  D                    PTS:   1

 

6. The regulation of the brewing and liquor industries is done by the _____.

a.	Federal Trade Commission
b.	Food and Drug Administration
c.	Bureau of Alcohol, Tobacco, and Firearms
d.	National Advertising Division
e.	National Advertising Review Board

 

 

ANS:  C                    PTS:   1

 

7. Target marketing could be considered unethical when the targeting is concerned not with fulfilling consumers’ needs and wants, but rather with exploiting consumers’ _____.

a.	economic status
b.	lack of information
c.	vulnerability
d.	demographic profiles
e.	social status

 

 

ANS:  C                    PTS:   1

 

8. Which of the following is NOT considered an ethical issue in advertising?

a.	creates and perpetuates stereotypes
b.	waste of economic resources
c.	manipulative
d.	offensive and in bad taste
e.	plays on people’s fears and insecurities

 

 

ANS:  B                    PTS:   1

 

9. Which of the following statements is true regarding advertising’s manipulative power?

a.	Bad consumption decisions are proof of advertising’s manipulative power over consumers.
b.	The only way marketing communications can actually influence consumers is through overt, non-subtle ways.
c.	A primed goal state generated by advertising remains an active driver of judgments and behavior over the long run.
d.	Advertising practitioners do not have any ability to influence consumers in very subtle ways.
e.	People, when consciously aware that attempts are being made to persuade or influence them, have the cognitive capacity to resist efforts to motive them in a direction they wish not to be moved.

 

 

ANS:  E                    PTS:   1

 

10. One criticism of advertising that contends that it tends to portray certain groups in very narrow and predictable fashion, or it _____.

a.	targets economically disadvantaged consumers
b.	creates and perpetuates stereotypes
c.	is untruthful and deceptive
d.	is manipulative
e.	plays on people’s fears and insecurities

 

 

ANS:  B                    PTS:   1

 

11. The organization that promulgated a code of high ethical standards for advertising in 1924, and updated the code in 1990 is the _____.

a.	Federal Trade Commission
b.	National Advertising Review Council
c.	American Advertising Federation
d.	Children’s Advertising Review Unit
e.	American Association of Advertising Agencies

 

 

ANS:  E                    PTS:   1

 

12. In the AAAA’s Code of Ethical Standards, it is stated that “…we will not knowingly create advertising that contains _____.

a.	false, or misleading statements or exaggerations, visual or verbal
b.	statements, suggestions, or pictures offensive to public decency or minority segments of the population
c.	price claims that are misleading
d.	testimonials that do not reflect the real opinion of the individual(s) involved
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

13. Ethical issues in packaging can involve _____.

a.	label information
b.	packaging graphics
c.	packaging safety
d.	environmental implications of packaging
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

14. The practice of marketers in one country using brand names for their products that are virtually the same as the names of established brands from another country is known as _____.

a.	piracy
b.	trade dress violation
c.	private label branding
d.	ambush marketing
e.	guerilla branding

 

 

ANS:  A                    PTS:   1

 

15. General Mills is introducing a new line of barbecue sauce, and grocery retailers are requiring that General Mills pay them a per-store fee for their willingness to handle the new product. This fee is known as a _____ fee.

a.	placing
b.	purchasing
c.	selling
d.	slotting
e.	security

 

 

ANS:  D                    PTS:   1

 

16. Who can engage in unethical behavior with respect to sales promotions?

a.	manufacturers
b.	retailers
c.	consumers
d.	a and b only
e.	a, b, and c

 

 

ANS:  E                    PTS:   1

 

17. _____ is the most important ethical issue that is unique to the online medium.

a.	Privacy
b.	Slotting fees
c.	Negative publicity
d.	Piracy
e.	Short filling

 

 

ANS:  A                    PTS:   1

 

18. In large part, ethical behavior is a matter of an individual’s _____.

a.	education
b.	age
c.	gender
d.	income
e.	integrity

 

 

ANS:  E                    PTS:   1

 

19. Jose Ortega acts in a way that he would want others to act toward him. He is using the _____ test.

a.	utilitarianism
b.	Golden Rule
c.	professional ethics
d.	TV
e.	moral idealism

 

 

ANS:  B                    PTS:   1

 

20. The Golden Rule ethical test states that _____.

a.	you should take only actions that would be viewed as proper by an objective panel of your professional colleagues
b.	you would, regardless of the circumstances, always view certain acts or decisions as unethical and others as ethical
c.	you should act in a way you would want others to act toward you
d.	you would examine the expected outcome of an act, and if it creates more good than bad, then the act is ethical
e.	an act is ethical if you would feel comfortable explaining it on television

 

 

ANS:  C                    PTS:   1

 

21. According to the _____ test, you should take only actions that would be viewed as proper by an objective panel of your colleagues.

a.	Golden Rule
b.	professional ethics
c.	TV
d.	moral idealism
e.	relativity

 

 

ANS:  B                    PTS:   1

 

22. Joan works at a major advertising agency and uses the code of ethical standards promulgated by the American Association of Advertising Agencies to guide her in making ethical decisions when developing ads for her agency’s clients. What test is she applying to guide her behavior?

a.	Golden Rule test
b.	professional ethics test
c.	TV test
d.	peer test
e.	generally-accepted practices test

 

 

ANS:  B                    PTS:   1

 

23. Which of the following is NOT a benefit of regulation?

a.	Consumer choice among alternatives is improved when consumers are better informed in the marketplace.
b.	Product quality tends to improve in response to consumers’ changing needs and preferences.
c.	Unintended side effects are minimized with regulation compared to without it.
d.	Reduced prices resulting from a reduction in a seller’s “information market power.”
e.	All of these are benefits.

 

 

ANS:  C                    PTS:   1

 

24. Regulation of advertising may result in buyers switching to another product or reducing their level of consumption after regulation is imposed. This is an example of _____ regulation.

a.	unfair practices
b.	covert marketing practices
c.	information regulation in
d.	unintended side effects of
e.	Federal Trade Commission

 

 

ANS:  D                    PTS:   1

 

25. Regulators have been most active in the area of _____.

a.	advertising
b.	personal selling
c.	sales promotion
d.	packaging
e.	publicity

 

 

ANS:  A                    PTS:   1

 

26. The _____ is the U.S. government agency that has primary responsibility for regulating advertising at the federal level.

a.	Food and Drug Administration (FDA)
b.	National Advertising Review Board (NARB)
c.	Better Business Bureau (BBB)
d.	National Advertising Division (NAD)
e.	Federal Trade Commission (FTC)

 

 

ANS:  E                    PTS:   1

 

27. What are the three basic elements of the FTC’s current policy determining whether or not an ad is deceptive?

a.	misleading, reasonable consumer, and material
b.	misleading, typical consumer, and injury
c.	comparative ad, misleading, and reasonable consumer
d.	injury, not avoidable, and material
e.	injury, reasonable consumer, and false

 

 

ANS:  A                    PTS:   1

 

28. Elyssa notices an advertisement with information that is contrary to fact. According to the FTC, this is _____.

a.	deceptive
b.	a misrepresentation
c.	misguided
d.	material
e.	unfair

 

 

ANS:  B                    PTS:   1

 

29. Campbell’s Soup used glass marbles to displace the chicken, vegetables, and star-shaped noodles in advertisements for it Chicken and Stars soup because, without them, all the solid matter sank to the bottom and consumers couldn’t see the “stars.” The ad was ruled deceptive because Campbell’s did not tell consumers that the soup really did not contain as much meat, vegetables, and noodles as it appeared due to the prop used to photograph the ads. This ad was most likely be considered misleading due to _____.

a.	immateriality
b.	hyperbole
c.	exaggeration
d.	omission
e.	unreasonableness

 

 

ANS:  D                    PTS:   1

 

30. The FTC’s policy on deception is that the act or practice must be considered from the perspective of a _____.

a.	reasonable consumer
b.	probable consumer
c.	competitor
d.	government
e.	child

 

 

ANS:  A                    PTS:   1

 

31. A(n) _____ involves information that is important to consumers and that is likely to influence their choice or conduct regarding a product.

a.	reasonable representation
b.	material representation
c.	factual representation
d.	objective representation
e.	unfair representation

 

 

ANS:  B                    PTS:   1

 

32. What did Kraft state as its defense when the FTC judged the ad for Kraft Singles deceptive?

a.	The claim made in the ad was not false.
b.	Reasonable consumers wouldn’t believe the claim regardless of whether it was true or false.
c.	The claim was merely puffery and did not state a fact.
d.	The claim was immaterial.
e.	They agreed the claim made in the ad was false, but other competitors were making the same false claim.

 

 

ANS:  D                    PTS:   1

 

33. Jake and thousands of others like him purchased a product advertised on TV that claimed instant hair growth with one application. Jake is representative of the many purchasers of this product in that he is highly sensitive about his recent balding. Because the advertised product is ineffective, the FTC would likely consider this a case of _____ advertising.

a.	unfair
b.	deceptive
c.	unreasonable
d.	unrepresentative
e.	unethical

 

 

ANS:  B                    PTS:   1

 

34. The criteria used to evaluate whether a business act is unfair involves the consideration of whether the act _____.

a.	causes substantial injury to consumers, competitors, or other businesses
b.	offends public policy as it has been established by statutes
c.	is immoral, unethical, oppressive, or unscrupulous
d.	a and b only
e.	a, b, and c

 

 

ANS:  E                    PTS:   1

 

35. Which is NOT an element of the definition of unfair advertising?

a.	an act or practice that causes or is likely to cause substantial injury to consumers
b.	the injury is not reasonably avoidable by consumers
c.	misleading from the viewpoint of a reasonable consumer
d.	not outweighed by countervailing benefits to consumers or competition
e.	All of the above are elements.

 

 

ANS:  C                    PTS:   1

 

36. The XYZ Brewery Corporation undertook an advertising campaign which appeared to encourage pre-legal-drinking-aged teenagers to consume its high-powered malt liquor. The FTC can take action against XYZ on grounds that the advertising campaign is in violation of the _____ doctrine.

a.	substantiation
b.	ethics
c.	unfairness
d.	responsibility
e.	deceptive

 

 

ANS:  C                    PTS:   1

 

37. _____ is based on the premise that a firm that misleads consumers should have to use future advertisements to rectify the deceptive impressions it has created in consumers’ minds.

a.	Rectification advertising
b.	Unfairness removal
c.	Anti-deception advertising
d.	Regulated advertising
e.	Corrective advertising

 

 

ANS:  E                    PTS:   1

 

38. The Bamboozle Corporation was finally indicted for years of deceptive advertising. The FTC required the company to spend $5 million on television commercials over the next six months to rectify any deceptive impressions it created in consumers’ minds. In other words, the FTC required Bamboozle Corporation to undertake a(n) _____ program.

a.	corrective advertising
b.	rectification
c.	unfairness removal
d.	anti-deception
e.	make-good

 

 

ANS:  A                    PTS:   1

 

39. The _____ is the U.S. government agency that has primary responsibility for regulating information on the packages of food and drug products.

a.	NARB
b.	NAD
c.	FTC
d.	FDA
e.	BBB

 

 

ANS:  D                    PTS:   1

 

40. Advertising of prescription drugs that is directed toward consumers is known as _____.

a.	direct marketing
b.	direct-to-consumer advertising
c.	direct-response advertising
d.	balanced-perspective advertising
e.	missionary advertising

 

 

ANS:  B                    PTS:   1

 

41. In which country has advertising self-regulation flourished?

a.	Canada
b.	France
c.	United States
d.	United Kingdom
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

42. The _____ is a form of self-regulation undertaken by ad media that takes place behind the scenes before a commercial or other advertisement reaches consumers.

a.	ad review process
b.	advertising clearance process
c.	NAD review process
d.	NARB review process
e.	advertising screening process

 

 

ANS:  B                    PTS:   1

 

43. Which of the following is a step in the advertising clearance process?

a.	advertising agency clearance
b.	approval from the advertiser’s legal department and perhaps also from an independent law firm
c.	media approval
d.	a and b only
e.	a, b, and c

 

 

ANS:  E                    PTS:   1

 

44. The advertising clearance process involves which groups of people?

a.	advertising agency, advertiser, media, and the audience
b.	advertiser, FTC, FCC, and FDA
c.	advertiser, lawyers, NAD, and possibly the NARB
d.	advertiser, lawyers, FTC, and the NAD
e.	advertiser, lawyers, advertising agency, and the media

 

 

ANS:  E                    PTS:   1

 

45. The self-regulatory monitoring of children’s television programs and commercials is done by the _____.

a.	FTC
b.	FDA
c.	NAD
d.	CARU
e.	NARB

 

 

ANS:  D                    PTS:   1

 

46. The NAD and NARB were established to _____.

a.	sustain standards of truth and accuracy in national advertising to adults
b.	eliminate federal and state regulation of advertising
c.	uphold standards of taste and decency in national advertising to adults
d.	punish national advertisers that violate standards of taste and decency in their ads
e.	punish national advertisers that encourage children to demand products from their parents

 

 

ANS:  A                    PTS:   1

 

47. _____ is a court consisting of 50 representatives who are formed into five-member panels to hear appeals of NAD cases when an involved party is dissatisfied with the initial verdict.

a.	FTC
b.	CARU
c.	FDA
d.	NARB
e.	NAAG

 

 

ANS:  D                    PTS:   1

 

48. NAD is the investigative arm of the _____.

a.	FTC
b.	CARU
c.	FDA
d.	NARB
e.	NAAG

 

 

ANS:  D                    PTS:   1

 

49. Cases can be brought to the NAD by _____.

a.	competitors
b.	NAD staff personnel
c.	Better Business Bureaus
d.	consumers
e.	All of these are correct.

 

 

ANS:  E                    PTS:   1

 

50. Some companies have responded to environmental concerns by introducing environmentally oriented products and undertaking marcom programs to promote them. These actions are referred to as ____.

a.	green marketing
b.	environmental initiatives
c.	cause marketing
d.	clean-world initiatives
e.	environmental ethics

 

 

ANS:  A                    PTS:   1

 

51. Companies have made a number of legitimate responses to environmental problems. They have been motivated for reasons such as achieving regulatory compliance, gaining competitive advantage, and _____.

a.	being socially responsible
b.	being profit motivated
c.	being customer conscious
d.	being image conscious
e.	None of these are correct.

 

 

ANS:  A                    PTS:   1

 

52. The major green communications efforts include all of the following EXCEPT ____.

a.	packaging
b.	sales promotion
c.	seal-of-approval programs
d.	cause-oriented communication efforts
e.	point-of-purchase displays

 

 

ANS:  B                    PTS:   1

 

53. Which of the following is NOT a type of green advertising appeal?

a.	ads that address a relationship between a product/service and the biophysical environment
b.	those that promote a green lifestyle without highlighting a product or service
c.	ads that promote short filling, which is the use of less packaging
d.	ads that present a corporate image of environmental responsibility
e.	All of these are types of green advertising appeals.

 

 

ANS:  C                    PTS:   1

 

54. Research has found that over 40 percent of juice containers, milk cartons, and other dairy products contain a smaller amount of product (from 1 to 6 percent less) than the package labels promise. These are examples of _____.

a.	mis-labeling
b.	short filling
c.	deceptive advertising
d.	covert marketing practices
e.	packaging fraud

 

 

ANS:  B                    PTS:   1

 

55. Clarence notices the Blue Angel seal on a box of laundry detergent. The Blue Angel seal _____.

a.	means the product is made in the United States
b.	means the product is endorsed by the Chamber of Commerce
c.	represents a promise to consumers that a product carrying an environmental claim is in fact legitimate
d.	is a sign of approval from the NAD
e.	represents a promise that the company is an equal opportunity employer

 

 

ANS:  C                    PTS:   1

 

56. Green Seal is an eco-labeling program in _____.

a.	Germany
b.	Sweden
c.	Japan
d.	the United States
e.	Finland

 

 

ANS:  D                    PTS:   1

 

57. The _____ signifies recycled paperboard content.

a.	semicircle of 10 small arrows
b.	Blue Angel
c.	Green Seal
d.	triangle of three arrows
e.	rectangle of four arrows

 

 

ANS:  A                    PTS:   1

 

58. A number of major corporations, such as General Motors, Amway, and Evian, sponsor or support worthy causes, many of which are environmental causes. Companies are highly motivated to engage in cause-oriented marketing because _____.

a.	it is a socially acceptable way of distributing excess profits
b.	corporations function better in a healthy environment
c.	corporations hope to generate goodwill toward the company and its brands
d.	major companies are required by law to support environmentally friendly causes
e.	research shows that companies that support the environment do better financially

 

 

ANS:  C                    PTS:   1

 

59. Which of the following is NOT one of the guides for environmental claims promulgated by the Federal Trade Commission?

a.	Qualifications and disclosures should be sufficiently clear and prominent to prevent deception.
b.	Claims should not be targeted to children.
c.	Claims should make clear whether they apply to the product, the package, or a component of either.
d.	Claims should not overstate an environmental attribute or benefit, either expressly or by implication.
e.	Comparative claims should be presented in a manner that makes the basis for the comparison sufficiently clear to avoid consumer deception.

 

 

ANS:  B                    PTS:   1

 

60. Which of the following is NOT a general recommendation offered to marcom practitioners for making appropriate environmental claims?

a.	Only make environmental claims that your competitors cannot make.
b.	Make specific claims.
c.	Reflect current disposal options.
d.	Make substantive claims.
e.	Make supportable claims.

 

 

ANS:  A                    PTS:   1

 

61. In the FTC’s Green Guides, claims such as “environmentally friendly” or “safe for the environment” would fall into which of the four general recommendations?

a.	Make Specific Claims.
b.	Reflect Current Disposal Options.
c.	Make Substantive Claims.
d.	Make Supportable Claims.
e.	None of these are correct.

 

 

ANS:  A                    PTS:   1

 

ESSAY

 

1. Discuss three ethical issues in advertising.

 

ANS:

The chapter covered several ethical issues in advertising, and students can discuss any three of the following:

1.	Advertising is untruthful and deceptive. Deception occurs when an advertisement falsely represents a product, and consumers believe the false representation. While some advertising is deceptive, it would be naive to assume the most advertising is deceptive.
2.	Advertising is manipulative. Critics claim that advertising has the power to influence people to do things they would not do if they were not exposed to advertising. However, people are aware that attempts are being made to persuade or influence them, and they have the cognitive capacity to resist efforts to motivate them in a direction they wish not to be moved. However, communicators can influence consumers.
3.	Advertising is offensive and in bad taste. Critics contend that advertisements sometimes are insulting to human intelligence, vulgar, and generally offensive to the tastes of many consumers.
4.	Advertising creates and perpetuates stereotypes. Critics claim that advertising tends to portray certain groups in a very narrow and predictable fashion. While advertising may be guilty of perpetuating stereotypes, it would be unfair to blame advertising for creating these stereotypes, which, in fact, are perpetuated by all elements of society.
5.	People buy things they do not really need. Advertising may influence consumer tastes and encourages them to undertake purchases they may not otherwise make, but this criticism is a value-laden judgement because who is to say what anyone else needs?
6.	Advertising plays on people’s fears and insecurities. Some advertisements appeal to the negative consequences of not buying and using certain products, and certainly some advertising attempts to influence consumer behavior by appealing to negative emotions.

 

 

PTS:   1

 

2. Name and describe three tests marcom professionals can apply to deal with ethical dilemmas.

 

ANS:

The three tests one can employ when faced with an ethical dilemma are:

1.	Golden Rule Test. Act in a way that you would want others to act toward you.
2.	Professional Ethics Test. Take only actions that would be viewed as proper by an objective panel of your professional colleagues.
3.	TV Test. Always ask, “Would I feel comfortable explaining this action on television to the general public?”

 

 

PTS:   1

 

3. Discuss the costs and benefits of regulation and who pays for or receives each, respectively. When is regulation justified?

 

ANS:

The costs associated with regulation include the cost of complying, enforcement costs, and costs associated with unintended side effects resulting from regulations. Companies often incur the cost of complying with a regulatory remedy. Enforcement costs are incurred by regulatory agencies and paid for by taxpayers. The unintended side effects that might result from regulations represent a cost to both buyers and sellers.

 

Regulation offers three major benefits. First, consumer choice among alternatives is improved when consumers are better informed in the marketplace. Second, when consumers become better informed, product quality tends to improve in response to consumers’ changing needs and preferences. Finally, reduced prices resulting from a reduction in a seller’s “information market power” is a third regulatory benefit. Consumers are the primary beneficiary of regulation.

 

In sum, regulation is theoretically justified only if the benefits exceed the costs.

 

PTS:   1

 

4. Compare and contrast the FTC’s deceptive advertising and unfair advertising policies, and give an example of each type of advertisement.

 

ANS:

The FTC’s policy regarding deceptive advertising includes three elements:

1.	Misleading. There must be a representation, omission, or a practice that is likely to mislead the consumers. A misrepresentation is defined by the FTC as an express or implied statement contrary to fact. A misleading omission is said to occur when qualifying information necessary to prevent a practice, claim, representation, or reasonable expectation or belief from being misleading is not disclosed.
2.	Reasonable consumer. The act or practice must be considered from the perspective of the “reasonable consumer.” The FTC’s test of reasonableness is based on the consumer’s interpretation or reaction to an advertisement, meaning the FTC determines the effect of the advertising practice on reasonable members of the group to which the advertising is targeted.
3.	Material. The representation, omission, or practice must involve information that is important to consumers and that is likely to influence their choice or conduct regarding a product.

 

Unlike deception, a finding of unfairness to consumers may go beyond questions of fact and relate merely to public values. Unfair advertising is defined as an act or practice that causes or is likely to cause substantial injury to consumers, the injury is not reasonably avoidable, and is not outweighed by benefits of advertising. In contrast to deception, an unfair advertisement does not have to be misleading.

 

An example of a deceptive advertisement might be one that claims consumers can lose an unreasonable amount of weight in a short period of time. An example of an unfair advertisement that was given in the text is one company’s use of Spider-Man vitamin advertising because such advertising might be capable of inducing children to take excessive and dangerous amounts of vitamins.

 

PTS:   1

 

5. Discuss the self-regulation of advertising that occurs before and after an ad appears in the media.

 

ANS:

The self-regulation of advertising before it appears in the media is known as the advertising clearance process. A magazine advertisement or television commercial undergoes a variety of clearance steps prior to its actual printing or airing, including (1) advertising agency clearance, (2) approval from the advertiser’s legal department and perhaps also from an independent law firm, and (3) media approval.

 

A finished ad that makes it through the clearance process and appears in advertising media is then subject to the possibility of post hoc self-regulation, particularly from the National Advertising Review Council (NARC). NARC is an organization formed via a partnership among several advertising trade groups and the Council of Better Business Bureau’s National Advertising Division (NAD). NARC consists of three review units: the Children’s Advertising Review Unit (CARU), NAD, and the National Advertising Review Board (NARB). CARU monitors children’s television programming and commercials, whereas the NAD and NARB were established to sustain standards of truth and accuracy in national advertising to adults. NARB is a court consisting of 50 representatives who are formed into five-member panels to hear appeals of NAD cases when an involved party is dissatisfied with the initial verdict. NAD is the investigative arm of NARB and is responsible for evaluating, investigating, and holding initial negotiations with an advertiser on complaints involving truth or accuracy of national advertising. Cases are brought to the NAD by competitors, initiated by the NAD staff, or originate from local Better Business Bureaus, consumer groups, and individual consumers.

 

PTS:   1

 

6. Discuss the three types of green advertising appeals and provide an example of each.

 

ANS:

The three types of green advertising appeals are:

1.	Ads that address a relationship between a product/service and the biophysical environment. The example given in the text is an ad for Shell and how they found ways to make large scale production and a commercial reality for producing ethanol from agricultural wastes. Another example is o.b. tampons touting their lack of applicators as generating less waste.
2.	Ads that promote a green lifestyle without highlighting a product or service. Some companies, such as Ben & Jerry’s, promote environmental awareness but not necessarily their specific products.
3.	Ads that present a corporate image of environmental responsibility. Examples could be how companies have complied with environmental initiatives before they were enforceable by law or are not even law.

 

 

PTS:   1

 

7. List and describe the four general recommendations given to marcom practitioners for making appropriate environmental claims.

 

ANS:

1.	Make specific claims. This guideline is intended to prevent marketing communicators from using meaningless claims such as “environmentally friendly” or “safe for the environment.” The use of specific environmental claims enables consumers to make informed choices, reduces the likelihood that claims will be misinterpreted, and minimizes the chance that consumers will think that a product is more environmentally friendly that it actually is.
2.	Reflect current disposal options. This recommendation is directed at preventing environmental claims that are technically accurate but practically unrealizable due to local trash disposal practices. For example, it would misleading to claim something is degradable when, in fact, it is not due to how trash is disposed of.
3.	Make substantive claims. Some marketing communicators use trivial and irrelevant environmental claims to convey the impression that a promoted brand is environmentally sound.
4.	Make supportable claims. Environmental claims should be supported by competent and reliable scientific evidence.

 

 

PTS:   1