If State Farm were to decide that its previous method of appropriating the advertising budget

If State Farm were to decide that its previous method of appropriating the advertising budget was ineffective, it could decide to allocate 2 percent of its total annual sales to advertising. However, one problem with this method is that

a) it makes the bookkeeping too difficult.

b) it is tied too closely to sales forecasts.

c) a sales decline leads to an increase in the advertising appropriation.

d) a drop in sales would cause a drop in the advertising budget.

e) competitors may have different advertising objectives.

145. If State Farm Bank decided that it wanted to increase its number of bank customers by 10% in the coming year, it would most likely use the ______________ approach to advertising allocation.

a) arbitrary

b) competition-matching

c) objective-and-task

d) percent-of-sales

e) percent-of-customer

146. T F Advertising is paid nonpersonal communication transmitted through mass media.

Ans: True

147. T F Business organizations are the only major users of advertising.

148. T F Institutional advertising and promotional advertising are the two basic categories of advertising.

149. T F Advertisements that promote goods and services are called advocacy advertisements.

150. T F Product advertising is often used to stimulate demand directly.

151. T F If a commercial advertisement compares one brand of laundry detergent to another brand, this is a type of competitive advertising.

152. T F Pioneer advertising involves describing the features and benefits of a product in contrast to a direct competitor.

153. T F If a restaurant, known for its delicious food and fun entertainment, does not serve alcohol, it is displaying advocacy advertising.

154. T F In a comparative advertisement, advertisers point out that their brand has characteristics that are superior to those of competing brands, but they do not actually mention the brand names of competitors.

155. T F Comparative advertisements mention the actual names of competing brands.

156. T F Reinforcement advertising tells current users how to get the most satisfaction from the brand they have chosen.

157. T F Reminder advertising is not applicable to new products.

158. T F Almost all advertising campaigns are aimed at producing immediate sales.

159. T F Advertising objectives should be stated in clear, precise, and measurable terms.

160. T F The statement of advertising objectives should include a benchmark—such as the current sales level—and indicate how much improvement is sought.

161. T F A marketer’s advertising platform should consist of issues that are important to consumers.

162. T F The advertising platform consists of the basic issues and selling points that an advertiser wishes to include in the campaign.

163. T F The advertising platform is the foundation on which campaign messages are built.

164. T F Most often, the opinions of a firm’s personnel are used to develop the advertising platform.

165. T F The advertising budgets for industrial products are usually large relative to the sales of the products.

166. T F When sales go up, advertising should be increased; when sales decline, advertising should be decreased.

167. T F To assume that sales create advertising is incorrect.

168. T F The arbitrary approach to setting an advertising budget often results in inappropriate spending of the firm’s resources.

169. T F The choice of media influences the content and form of the message.

170. T F A cost comparison indicator (such as CPM) should not be used to compare the cost and impact of a television commercial with the cost and impact of a newspaper advertisement.

171. T F The signature is not part of the verbal portion of an advertisement.

172. T F Radio copy should consist of short, familiar terms.

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