Chapter 15—Direct Marketing and Other Media. All Answers

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Chapter 15—Direct Marketing and Other Media TRUE/FALSE 1. Direct advertising enables the advertiser to convey a message to a target market that has been selected with precision. T PTS: 1 ... 2. Direct advertising is delivered to individuals’ homes or workplaces typically via postal mail in the form of print materials or in a digital/electronic form such as DVDs and CD-ROMs. T PTS: 1 3. Direct advertising is delivered either to homes and workplaces or at a variety of public venues. F PTS: 1 4. Direct mail advertising refers to any advertising matter delivered by the postal service to the person whom the marketer wishes to influence. T PTS: 1 5. One reason for the increased use of direct mail is the increased emphasis on measurable advertising results. T PTS: 1 6. One reason for the growth of direct mail is the rising cost of television advertising and increasing audience fragmentation. T PTS: 1 7. Efficiency is a distinctive feature of direct mail. T PTS: 1 8. On a cost per thousand basis, direct mail is less expensive than other media. F PTS: 1 9. Compared with other media, direct mail is much less wasteful and will usually produce the highest percentage of responses. T PTS: 1 10. Perhaps the major problem with direct mail is that many people consider it excessively intrusive and invasive of privacy. T PTS: 1 11. Only B2B marketers have increased their usage of direct mail advertising. F PTS: 1 12. From the consumers’ perspective, shopping by catalog saves time because people do not have to find parking spaces and deal with in-store crowds. T PTS: 1 13. Successful direct mailing necessitates the availability of computer databases and the addressability inherent in the databases. T PTS: 1 14. Typical databases include customers’ buyographic data, and other types of relevant information (demographic, geographic, and psychographic data). T PTS: 1 15. An up-to-date database can offer varied messages to different groups of customers. T PTS: 1 16. An up-to-date database provides firms with a number of assets, including the ability to calculate the lifetime value of a product. F PTS: 1 17. From a database perspective, each present or prospective customer is viewed as not just an address but rather as a long-term asset. T PTS: 1 18. Customer lifetime value is the net present value of the profit that a company stands to realize on the average new customer during a given number of years. T PTS: 1 19. Customer lifetime value refers to all product category purchases that an individual will make during his or her lifetime. F PTS: 1 20. If a marketer focuses on customer retention rather than just customer acquisition, customer lifetime value can be increased. T PTS: 1 21. The problem with databases is that they are small in size with few addresses and few variables for each database entrant. F PTS: 1 22. Data miners look for revealing relations among the variables contained in the a database. T PTS: 1 23. The R in a company's R-F-M formula stands for referral rate. F PTS: 1 24. The F in a company's R-F-M formula stands for frequency. T PTS: 1 25. The M in a company's R-F-M formula stands for motivation. F PTS: 1 26. Companies are increasingly using the audio-visual medium (i.e., videotapes, CD-ROMs, or DVDs) to present customers with detailed product information. T PTS: 1 27. Although unverified in a scientific sense, it stands to reason that video advertising is potentially less entertaining than comparable print advertising and is, thus, less effective in gaining attention and influencing memorability of an advertising message. F PTS: 1 28. The yellow pages is an advertising medium that consumers turn to when they are seeking a product or service supplier and are prepared to make a purchase. T PTS: 1 29. The yellow pages represent a huge advertising medium with annual revenues exceeding $140 billion. F PTS: 1 30. Research shows that users of yellow pages tend to have relatively low household incomes. F PTS: 1 31. National advertisers place the majority of yellow-pages ads. F PTS: 1 32. Videogames provide an excellent advertising medium for reaching young males. T PTS: 1 33. Mediamark has developed a service to measure videogame audiences. F PTS: 1 34. One advantage of brand placements is that they are generally less intrusive than advertisements and thus less likely to be avoided. T PTS: 1 35. Product placements in movies date back to the 1940s, yet the frequency of occurrence is greater now than ever. T PTS: 1 36. Older consumers appear to be the most responsive to brand placement in movies. F PTS: 1 37. Brand placements have occurred in songs. T PTS: 1 38. Weblogs are a form of advertising that involves producing short films that feature the advertised brand and are available on the Internet for free viewing. F PTS: 1 MULTIPLE CHOICE 1. The traditional media and the Internet represent a disorderly state for individual advertisers inasmuch as their attempts to capture the viewer’s or listener’s attention is offset by the efforts of hundreds of other advertisers attempting to accomplish the same goal. This is referred to as _____. a. noise b. fragmentation c. wasted coverage d. fractionalization e. clutter E PTS: 1 2. _____ advertising is delivered to individuals’ homes or workplaces typically via postal mail in the form of printed materials or in a digital/electronic form. a. Indirect b. Mass c. Personal d. Direct e. Focused D PTS: 1 3. Direct, yellow-pages, and video-game advertising can perform an invaluable role when used _____. a. with sales promotion b. with greater frequency than traditional media c. as the main tools in a marcom program d. in a supplementary capacity in an IMC program e. only with younger target markets D PTS: 1 4. Yellow pages, video games, and brand placement are examples of _____. a. direct advertising b. indirect advertising c. niche advertising d. electronic advertising e. stealth advertising B PTS: 1 5. Letters, postcards, programs, calendars, folders, and catalogs are all examples of _____. a. indirect marketing b. indirect advertising c. direct mail advertising d. e-mail advertising e. database marketing C PTS: 1 6. Which of the following factors accounts for the widespread use of direct mail by marketers? a. rising cost of television advertising and increasing audience fragmentation b. unparalleled targeting c. measurable advertising results d. consumers have favorable attitudes e. All of these are correct. E PTS: 1 7. Which of the following is NOT a factor accounting for the widespread use of direct mail by marketers? a. consumers have favorable attitudes b. unparalleled targeting c. reduced cost per thousand d. rising cost of television advertising and audience fragmentation e. measurable advertising results C PTS: 1 8. Which of the following is a distinctive feature of direct mail? a. targetability b. measurability c. accountability d. efficiency e. All of these are correct. E PTS: 1 9. Which of the following is NOT a distinctive feature of direct mail? a. targetability b. measurability c. accountability d. flexibility e. expandability E PTS: 1 10. Charles wants to use an advertising medium that offers the capability to target a precisely defined group of people, the ability to determine exactly how effective the advertising effort is so that he can justify budget allocations to this medium, and offers the flexibility to meet changing circumstances. Charles should use _____. a. television b. outdoor billboards c. magazines d. direct mail e. brand placement D PTS: 1 11. Which advertising medium simplifies the task of justifying the results of communications efforts? a. television b. radio c. newspaper d. magazine e. direct mail E PTS: 1 12. On a cost per thousand (CPM) basis, the most expensive medium is ____. a. television b. radio c. magazines d. direct mail e. newspaper D PTS: 1 13. Compared with other media, _____ is much less wasteful and will usually produce the highest percentage of responses. a. radio b. television c. direct mail d. outdoor advertising e. newspaper C PTS: 1 14. Beverly should use _____ advertising for her client who has requested a medium that is less wasteful than other media and produces the highest percentage of responses. a. magazine b. radio c. television d. direct mail e. newspaper D PTS: 1 15. Which of the following is a major problem with direct mail? a. intrusive and invasive of privacy b. inefficient c. lack of flexibility d. inability to target a precisely defined group of people e. lack of accountability A PTS: 1 16. Which of the following is a function direct mail can accomplish? a. build traffic at a specific retailer or website b. generate leads for a sales force c. communicate with individuals in a relatively private manner d. sell products and services to new customers e. All of these are correct. E PTS: 1 17. Which of the following is NOT a function direct mail can accomplish? a. increase sales from current customers b. acquire new customers c. create job opportunities d. gather customer information e. generate leads for a sales force C PTS: 1 18. One research study found that cataloging is highly effective because _____. a. sales to catalog recipients are over 150 percent greater on average compared to consumers not receiving a catalog b. catalog recipients buy more items on average and spend more money than do non-recipients c. more than two-thirds of catalog recipients visit the catalog company’s website d. a and b only e. a, b, and c E PTS: 1 19. From the consumer’s perspective, which of the following is NOT an advantage of shopping by catalog? a. It saves time because people do not have to find parking spaces and deal with in-store crowds. b. Catalog buying appeals to consumers who are fearful of shopping due to concerns about crime. c. Catalogs allow people the convenience of making purchase decisions at their leisure and away from the pressure of a retail store d. The availability of toll-free 800 numbers and online websites, credit card purchasing, and liberal return policies make it easy for people to order from catalogs. e. All of these are advantages. E PTS: 1 20. Which of the following is a reason for the subsiding growth rate of catalog marketing? a. novelty of catalog scanning has worn off b. increasing costs c. consumer dissatisfaction d. There are two reasons: increasing cost and the novelty of catalog scanning has worn off. e. All of these are correct. D PTS: 1 21. Catalog marketing has reached the _____ life-cycle stage. a. innovation b. introduction c. growth d. maturity e. decline D PTS: 1 22. Companies' databases of customers often contain R-F-M data. The M stands for _____. a. motivation b. monetary value c. markdown d. media e. message B PTS: 1 23. Although unverified in a scientific sense, it stands to reason that video advertising is potentially more entertaining than comparable print advertising and thus more effective in gaining attention and influencing _____ of an advertising message. a. measurability b. transferability c. memorability d. predictability e. durability C PTS: 1 24. It is claimed that video advertising is _____ than comparable print advertising in the form of brochures. a. more effective and less expensive b. less effective and less expensive c. more effective and more expensive d. less effective and more expensive e. None of these are correct. A PTS: 1 25. The use of CD-ROM discs would enhance marketing efforts for products such as ____. a. tourist destinations b. electronics c. dog food d. consumables e. computers A PTS: 1 26. Databases enable contacts with present or prospective customers who can be accessed by companies whose databases contain p- and e-mail addresses along with other pertinent data such as demographic information. This is called ____. a. psychographics b. buyographics c. addressability d. biographical data e. flexibility C PTS: 1 27. Compared to broadcast advertising, _____ does not deal with customers as a mass but rather creates individual relationships with each customer or prospective customer. a. lifetime analysis b. data mining c. direct advertising d. indirect advertising e. niche advertising C PTS: 1 28. Which of the following is an asset an up-to-date database provides a firm? a. ability to direct advertising efforts to those people who represent the best prospects for the company’s products or services b. offer varied messages to different groups of customers c. create long-term relationships with customers d. enhance advertising productivity e. All of these are correct. E PTS: 1 29. ____ is NOT an asset of an up-to-date database. a. Directing advertising to the best prospects for the company’s products or services b. Offering varied messages to different groups of customers c. Enhancing advertising productivity d. Calculating the lifetime value of a customer or prospect e. Calculating the lifetime value of a product E PTS: 1 30. A key feature of database marketing is that each present or prospective customer is viewed as not just an address, but rather as a(n) ____. a. long-term asset b. short-term asset c. declining asset d. unpredictable asset e. number A PTS: 1 31. The net present value of the profit that a company stands to realize on the average new customer during a given number of years is known as _____. a. brand equity b. customer equity c. customer lifetime value d. marginal customer analysis e. customer profitability C PTS: 1 32. The likelihood that people will remain customers is known as the _____ rate. a. discount b. retention c. acquisition d. attrition e. lifetime B PTS: 1 33. The _____ rate is a critical component of net present value analysis. a. turnover b. annual percentage c. referral d. discount e. actuary D PTS: 1 34. In lifetime value analysis, taking the reciprocal of the discount rate and multiplying the gross profit by the reciprocal will give one the _____. a. cummulative NPV profit b. NPV profit c. discount rate d. total costs e. net profit B PTS: 1 35. Which of the below is NOT one of the ways to enhance lifetime value? a. increase the retention rate b. increase the discount rate c. increase the referral rate d. cut direct costs e. enhance the average purchase volume per customer B PTS: 1 36. Lou is trying to increase the lifetime value of his customers. Which of the following is a way for him to augment his customers’ lifetime value? a. decrease the retention rate b. increase the discount rate c. increase the referral rate d. increase marketing communications expenditures e. All of these are correct. C PTS: 1 37. With effective database marketing a firm may be able to alter the channel of distribution via direct marketing efforts, and hence _____. a. cut direct costs b. reduce marcom costs c. increase retention rate d. enhance average purchase volume per customer e. increase the referral rate A PTS: 1 38. The goal of _____ is to discover hidden facts contained in databases. a. data mining b. data warehousing c. data definition d. data discovery e. data manufacturing A PTS: 1 39. Companies' databases of customers often contain R-F-M data. The R stands for _____. a. retention rate b. referral rate c. registration d. responsiveness e. recency E PTS: 1 40. Brand placement activity is perfectly aligned with one of the five key features of IMC. Which of the following is that feature? a. Build relationships rather than engage in flings. b. The customer represents the starting point for all marketing communications activities. c. Multiple messages must speak with a single voice. d. Don’t lose focus of the ultimate objective: affect behavior. e. Brand managers and their agencies should be amenable to using various marketing communication tools. B PTS: 1 41. Companies' databases of customers often contain R-F-M data. The F stands for _____. a. frequency b. familiarity c. feedback d. follow-up e. functional A PTS: 1 42. Which of the following is an advantage of brand placements in movies, TV programs, and elsewhere? a. more intrusive than advertisements b. less likely to be summarily rejected as just another persuasive attempt c. lack of clutter d. complete control over placements e. measurability B PTS: 1 43. Which of the following is a disadvantage of brand placement in movies, TV programs, and other forms of entertainment? a. loss of control of how brands are positioned b. difficulty of measuring effectiveness and ROI c. increasing prices d. decreasing prices e. All of these are correct, except for decreasing prices. E PTS: 1 44. Juan is trying to determine whether or not to enter into a brand placement agreement with the producers of an upcoming James Bond film. Which factors must he consider to determine the worth of a placement and how much it should cost him to place a brand in this particular movie? a. amount of time the brand gets on screen b. use or mention of the brand by characters in the movie c. integration with the plot of the movie d. who is the star of the movie e. the time, use/mention, and integration of the brand with the movie. E PTS: 1 45. Compared to other age groups, _____ year-olds are the most likely to notice brand placements in movies and to consider trying the brands seen in films. a. 10-to-16 b. 16-to-24 c. 25-to-34 d. 35-to-54 e. 55-to-65 B PTS: 1 46. The substantial increase in brand placements on TV has been concurrent with the growth of _____ television programming. a. infomercial b. cable c. reality d. crime-drama e. sitcom C PTS: 1 47. Conor needs to purchase a new refrigerator. He wants to purchase a General Electric refrigerator, but he doesn’t know which retail stores carry the brand and model he is interested in purchasing. Which medium should he turn to find a retailer that sells this brand of refrigerator? a. television b. yellow pages c. radio d. brand placement e. magazines B PTS: 1 48. Research shows that users of yellow pages tend to be ____ years-old. a. 15-to-19 b. 19-to-25 c. 25-to-49 d. 30-to-49 e. 40-to-49 C PTS: 1 49. Users of yellow pages have household incomes of approximately ____. a. $25,000 to $30,000 b. $30,000 to $35,000 c. $35,000 to $40,000 d. $40,000 to $50,000 e. $60,000 or more E PTS: 1 50. For which reason listed below are consumers likely to use the yellow pages? a. save time spent shopping around for information b. saving energy and money c. learning about products and services d. finding information quickly e. All of these are correct. E PTS: 1 51. A distinguishing feature of yellow page advertising is that there are _____. a. clear-cut limits on possible creative executions b. limitless possible creative executions c. only full color ads d. only black on yellow ads e. flexible purchasing plans A PTS: 1 52. Advertising that appears as part of a video game is known as _____. a. interactive advertising b. advertising integration c. adver-gaming d. interactive gaming e. electronic advertising C PTS: 1 53. Amy is playing “Need for Speed,” which is a video game she plays on her Playstation 3 game console. During her races, she sees signage for various brands, such as McDonald’s and other fast food restaurants. This is an example of _____. a. adver-gaming b. video emerging advertising c. virtual advertising d. virtual signage e. electronic signage A PTS: 1 ESSAY 1. What are the major differences between direct advertising and indirect advertising? Describe situations where direct advertising would be appropriate and situations where indirect advertising would be appropriate. 2. Explain what is meant by it is “a lot better to talk to twenty prospects than two million suspects” in reference to direct mail advertising. 3. What factors have turned marketers to the widespread use of direct mail advertising? At least four factors account for the widespread use of direct mail by B2B as well as B2C marketers: 1. Rising cost of television advertising and increasing audience fragmentation. 2. Unparalleled targeting of messages to desired prospects. 3. Measurable advertising results. 4. Consumers have favorable attitudes toward mail advertisements. PTS: 1 4. Define the concept of customer lifetime value, and describe five ways to enhance lifetime value. Customer lifetime value is the net present value (NPV) of the profit that a company stands to realize on the average new customer during a given number of years. There are five ways to augment lifetime value: 1. Increased the retention rate. The more customers a firm has and the longer they are retained, the greater the lifetime value. 2. Increase the referral rate. Positive relations created with existing customers can influence others to become customers through the positive word of mouth expressed by a company’s satisfied users. 3. Enhance the average purchase volume per customer. Existing customers can be encouraged to purchase more of a brand by augmenting their brand loyalty. 4. Cut direct costs. By altering the channel of distribution via direct marketing efforts, a firm may be able to cut costs and hence increase profit margins. 5. Reducing marketing communication costs. Effective database marketing can lead to meaningful reductions in marcom expenses because direct marketing often is more productive than mass media advertising. PTS: 1 5. Assume someone who owns seven department stores has hired you as her consultant. Explain how she would benefit by implementing database marketing. 6. Explain why data mining is an important activity for marketers. 7. Describe who uses the Yellow Pages and why they use them, and explain how the yellow pages differ from other advertising media. The yellow pages differ from other ad media in several respects: 1. Customers actively seek out ads in the yellow pages 2. Advertiser largely determines the quality of ad placement 3. There are clear-cut limits on possible creative executions 4. Advertisements are purchased for a full year and cannot be changed either in purchase amount or creative execution PTS: 1 8. Discuss factors that determine how much a brand placement is worth and thus how much it should cost a brand marketer to place a brand in a particular movie. [Show More]

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