Which statement is most likely true about affordable method of setting an advertising budget?
What Is Advertising Budget?An advertising budget is an estimate of a company's promotional expenditures over a certain time period. More importantly, it is the money a company is willing to set aside to accomplish its marketing objectives. Show
Key Takeaways
Understanding Advertising BudgetAn advertising budget is part of a company's overall sales or marketing budget that can be viewed as an investment in a company's growth. The best advertising budgets—and campaigns—focus on customers' needs and problems and on providing solutions to these issues, not company problems such as an overstock reduction. When creating an advertising budget, a company must weigh the value of spending an advertising dollar against the value of that dollar as recognized revenue. Before deciding on a specific amount, companies should make certain determinations to ensure that the advertising budget is in line with their promotional and marketing goals:
The best advertising budgets—and campaigns—focus on customers' needs and solving their problems, not company problems such as an overstock reduction. Advertising Budget LevelsCompanies can determine their advertising budget levels in several different ways, each of which has its positives and negatives:
Take the quiz test your understanding of the key concepts covered in the chapter. Try testing yourself before you read the chapter to see where your strengths and weaknesses are, then test yourself again once you’ve read the chapter to see how well you’ve understood. 1. ‘Promotion’ and ‘Marketing Communications’ are interchangeable terms. True False 2. Advertising is generally a better promotional tool than sales promotion when it comes to closing a sale. True or false? True False 3. Radio is a mass medium. True or false? True False 4. PR normally stands for Press Relations. True or false? True False 5. The two principal participants in Schramm’s communications model are media owner and client. True or false? True False 6. AIDA is a sequential model showing the states of mind that a person may go through while deciding what to buy. What does AIDA stand for?
Answer: d. attention, interest, desire, action 7. What is a push strategy?
Answer: a. a communications strategy aimed at distributors 8. What is a pull strategy?
Answer: c. a communications strategy aimed at consumers 9. Advertising, public relations and sales promotion are three of the four traditional techniques of the promotional mix. What is the fourth?
Answer: e. personal selling 10. Which of the following is not a PR technique?
Answer: e. an on-pack, free-prize draw 11. What is product placement?
Answer: b. paying for your product to be used as a prop in entertainment or cultural media 12. According to the UK advertising code administered by the Advertising Standards Authority (ASA), advertising should be:
Answer: a. legal, decent, honest and truthful 13. The Quick Heat Company sells all sorts of standalone fires (e.g. paraffin heaters and electric fan heaters). Most of their customers are businesses who have a short-term problem such as a heating breakdown. In order to increase sales, they have decided to try and persuade people who live in rented accommodation, and who may want to increase the warmth of their homes without investing in the property, to buy these fires. Who should be the primary target audience for their marketing communications campaign?
Answer: c. people who live in rented accommodation 14. The Quick Heat Company sells all sorts of standalone fires (e.g. paraffin heaters and electric fan heaters). Most of their customers are businesses who have a short-term problem such as a heating breakdown. In order to increase sales, they have decided to try and persuade people who live in rented accommodation, and who may want to increase the warmth of their homes without investing in the property, to buy these fires. Who is the primary target market for this campaign?
Answer: c. people who live in rented accommodation 15. The Quick Heat Company have a new range of central heating boilers designed for domestic use. They know that most homeowners buy boilers that are recommended by their heating engineer. Who is their target market for boilers?
16. The Quick Heat Company have a new range of central heating boilers designed for domestic use. They know that most homeowners buy boilers that are recommended by their heating engineer. Who should be the primary target audience for their new campaign?
Answer: d. heating engineers 17. Football Mania have booked an expensive ad slot during the FA Cup final. Unfortunately, there are technical problems and the ad is not shown. According to Schramm’s communications model, what is this an example of?
18. The Oxo family starred in one of the most famous, and long-running, ad campaigns in the UK. It showed the family in typical situations, usually culminating in them sitting down to eat an Oxo-inspired meal. What kind of creative execution is this?
19. What is the term for using specialist software to analyse large amounts of data (held in a database) to predict trends and likely customer behaviour?
20. ABC company have forecast approximately £10 million sales for the coming year. They have decided to allocate £200,000 (2% of turnover) to marketing. Which budget setting method are they using?
Answer: e. percentage of sales method 21. A ______ is a series of coordinated marketing activities designed to achieve specific objectives (e.g. to reposition a product or to educate people about its correct use). 22. Products are sold to target markets. Marketing Communications are addressed to target ______. 23. Sales promotions are ______-term, special offers and other added-value activities intended to induce buyers to buy, or try, a product. 24. PR may use the same ______ (e.g. television, radio or Internet) as advertising but in a very different way. 25. DAGMAR is a hierarchy of effects model comprising awareness, comprehension, ______ and action. Which budgeting method involves setting a company's promotion budget to match the standard outlays for the industry?The affordable method involves setting promotion budgets to match competitors' outlays.
Which of the following is most likely a key difference between advertising and sales promotion?Which of the following is most likely a difference between advertising and sales promotions? Advertising is an invitation to buy the product, while a sales promotion is an incentive to buy the product immediately.
Which types of promotion tools requires the most interaction with a customer Digital advertising personal selling Sales Promotion public relations TV advertising?Cards
Which of the following is the first step in developing an advertising program?Determining the exact audience for your product or service is the first step in developing an ad campaign. Once you know that, you can effectively develop your message, choosing media options that your target customer will watch, read or listen to.
|