Direct Marketing and Other Media: Chapter 15 Exam Study Guide, Exams of Business Economics

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Direct Marketing and Other

Media: Chapter 15.

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TRUE/FALSE

1. Direct advertising enables the advertiser to convey a message to a target market that has been selected with precision.

ANS: 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.

ANS: T PTS: 1

3. Direct advertising is delivered either to homes and workplaces or at a variety of public venues.

ANS: 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.

ANS: T PTS: 1

5. One reason for the increased use of direct mail is the increased emphasis on measurable advertising results.

ANS: T PTS: 1

6. One reason for the growth of direct mail is the rising cost of television advertising and increasing audience fragmentation.

ANS: T PTS: 1

7. Efficiency is a distinctive feature of direct mail.

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8. On a cost per thousand basis, direct mail is less expensive than other media.

ANS: F PTS: 1

9. Compared with other media, direct mail is much less wasteful and will usually produce the highest percentage of responses.

ANS: T PTS: 1

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11. Only B2B marketers have increased their usage of direct mail advertising.

ANS: 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.

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13. Successful direct mailing necessitates the availability of computer databases and the addressability inherent in the databases.

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14. Typical databases include customers’ buyographic data, and other types of relevant information (demographic, geographic, and psychographic data).

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15. An up-to-date database can offer varied messages to different groups of customers.

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16. An up-to-date database provides firms with a number of assets, including the ability to calculate the lifetime value of a product.

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17. From a database perspective, each present or prospective customer is viewed as not just an address but rather as a long-term asset.

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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.

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19. Customer lifetime value refers to all product category purchases that an individual will make during his or her lifetime.

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20. If a marketer focuses on customer retention rather than just customer acquisition, customer lifetime value can be increased.

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ANS: T PTS: 1

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ANS: F PTS: 1

32. Videogames provide an excellent advertising medium for reaching young males.

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ANS: T PTS: 1

33. Mediamark has developed a service to measure videogame audiences.

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34. One advantage of brand placements is that they are generally less intrusive than advertisements and thus less likely to be avoided.

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35. Product placements in movies date back to the 1940s, yet the frequency of occurrence is greater now than ever.

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36. Older consumers appear to be the most responsive to brand placement in movies.

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37. Brand placements have occurred in songs.

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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.

ANS: 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

ANS: 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.

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ANS: 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

ANS: 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

ANS: 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

ANS: 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.

ANS: 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

ANS: C PTS: 1

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8. Which of the following is a distinctive feature of direct mail? a. targetability b. measurability c. accountability

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c. direct mail d. outdoor advertising e. newspaper

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ANS: 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

ANS: 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

ANS: 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.

ANS: 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

ANS: 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

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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.

ANS: 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.

ANS: D PTS: 1

21. Catalog marketing has reached the life-cycle stage. a. innovation b. introduction c. growth d. maturity e. decline

ANS: 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

ANS: 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

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ANS: C PTS: 1

24. It is claimed that video advertising is than comparable print advertising in the form of brochures.

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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

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d. Calculating the lifetime value of a customer or prospect e. Calculating the lifetime value of a product

ANS: 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

ANS: 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

ANS: 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

ANS: 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

ANS: 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