1.Which of the following statements BEST describes advertising spending?
a. advertising spending by U.S. corporations averages about 25% of their sales dollars.
b. Advertising spending exceeded $1.5 trillion in 2008.
c. Advertising spending represents only a small portion of what people pay for products.
d.Advertising spending has increased more with the downturn in the economy.
2. Pioneering advertising:
a. helps turn potential customers into adopters.
b. points out product advantages to affect future buying decisions.
c. tries to keep the product's name before the public.
d. tries to develop selective demand for a specific brand.
3. Regarding message planning and the AIDA model:
a. "getting action" is the final and easiest step in the process.
b. focusing on one unique selling proposition is one way to arouse desire.
c. a successful attention-getting device assures "holding interest."
d. "arousing desire" is the first and hardest step in the process.
4. Which pricing policy is BEST for a profit-oriented, low-cost producer who is introducing a new product into a market with elastic demand and is expecting strong competition very soon after product introduction?
a. Skimming pricing
b. Introductory price dealing
c. Meeting competition pricing
d. Penetration pricing
5. Recently, some executives for highway construction companies agreed to stop competing with each other on price and to meet every three months to decide their price for the next quarter. In this situation:
a. the Robinson-Patman Act has been violated by price discrimination.
b. the Sherman Act has been violated.
c. the executives are exercising their right to free trade.
d. as long as prices don't increase--the executives have done nothing wrong.
6. A leading hard-disk manufacturer introduces a new line of high-capacity disk drivers. After selling to elite customers at a high price point, the company slowly reduces its prices over a period of time. The company is engaging in:
a. single pricing.
b. introductory price dealing.
c. price skimming
d. penetration pricing.
7. Research to evaluate advertising effectiveness:
a. should focus on the judgment of creative people and advertising experts.
b. should focus primarily on measuring increases in sales.
c. includes experiments such as using split runs on cable TV systems.
d. is a problem because nothing can be done until after the ad has actually run.
8. The following terms appeared on an invoice dated May 22nd, which was sent by a manufacturer to a retail store: 2/10, net 30. The amount of the invoice was $2,000. Assuming the retailer paid the invoice on June 1 (within 10 days after the products were delivered), how much should he have paid?
9. Pricing objectives should flow from, and fit in with:
a. shareholder expectations and market practices.
b. company-level and marketing objectives.
c. regulatory policies.
d. market price leader actions.
10. Advertising agencies:
a. may do a better job at less cost than firms' own advertising departments because they are specialists with an outside viewpoint.
b. earn a mandatory 15% commission on all local media buys.
c. usually do marketing strategy planning for their clients.
d. obtain most of their income from advertisers in the form of service fees.