Download File

Name: _________________________________________ Date: ___________________ Period: _________
Chapter 12- The Economics of Advertising
12.1- Advertising and the Economy
1. Advertising and marketing in general are ______________________ affected by the
condition of the _________________________. Economic factors to consider include
consumer’s ______________________ and purchasing ___________________,
________________________, and ___________________________.
2. One of the most influential factors in consumer’s buying behavior is their
__________________________. A significant shift in consumer’s
_________________________________ _____________________, which is the income left
after income taxes are paid, can affect buying decisions.
3. ______________________________ ______________________ is the value of a dollar (or
other unit of currency) as measured by the amount of products and services
it can buy. _____________________________ ___________________ is measured against
the ____________________ __________ ________________________, which is the average
cost of the basic necessities of life such as housing, food, clothing, utilities,
transportation, health care, and other miscellaneous expenses.
4. When income is _________________ compared to the lost of living, consumers
have more ________________________________ ________________________, which is the
amount of money remaining for spending and saving after taxes and other
essential expenses are paid.
5. Purchasing power is greatly affected by _________________________, which is an
increase in the general level of prices for products and services and a
decrease in purchasing power.
6. The U.S. government measures inflation using the _____________________________
_____________________ _____________________. The CPI is based on a list of products
and services commonly bought by consumers.
7. ______________________________ forces consumers to make economical choices
when shopping. _________________________ _________________________ may decrease
because many consumers will make purchases based on ______________________.
8. A _________________________________ is a period of time when the economy
experiences a downturn.
9. During a ________________________________, many companies will invest in
nontraditional forms of advertising such as product ___________________________,
social media, and _____________________________ advertising. Methods that allow
consumers to interact with companies help build _____________________________
____________________________ --- an important company asset during a recession.
10. In what ways does advertising work to spur economic growth?
1. ________________________________________________________________________________
2. ________________________________________________________________________________
3. ________________________________________________________________________________
4. ________________________________________________________________________________
5. ________________________________________________________________________________
6. ________________________________________________________________________________
7. ________________________________________________________________________________
11. ________________________ _______________________________ ________________________ is the
total dollar value of all products and services produced by a country within a
certain time period.
Name: _________________________________________ Date: ___________________ Period: _________
Chapter 12- The Economics of Advertising
12. __________________________ is the consumer’s perception of how much satisfaction
a product provides beyond the price paid for the product.
12.2- Financial Planning for Advertising
13. Advertising costs are typically very ________________________________. Businesses
must find a ______________________________ between spending too little and
spending too much.
14. What are the four (4) methods businesses use to set an advertising budget?
1. ________________________________________________________________________________
2. ________________________________________________________________________________
3. ________________________________________________________________________________
4. ________________________________________________________________________________
15. The _______________________________________________________________ method set the
advertising budget as a fixed percentage of past or projected sales. Two
advantages of this method are its relative _________________________________ and
the direct relationship between _______________________________________ and
available _____________________________.
16. The _________________________________________________________________ method bases
an advertising budget on the amount of money spent by competition on
advertising.
17. Matching or exceeding competitor’s spending also helps a company establish
a significant _______________________ ___________ _______________________, which is the
company’s portion (percentage) of overall advertising in a specific product
category.
18. The ___________________________________________________________________ method of
advertising budgeting estimates the cost of achieving advertising objectives.
It is the _______________________ accurate strategy for creating a budget because
it relates to the objectives to be achieved.
19. A ________________________________ _________________________________ model examines
the number of sales generated in the relation to the dollar amount spent on
advertising. The general idea is that as long as ____________________ exceed
advertising expenditures, the business will ______________________________
spending on advertising.
20. ____________________________ ______________________________ is an important aspect of
all businesses. Two of the most important financial reports a business uses
for planning and operating the company are ____________________________
__________________________________ and ______________________________ _________________.
21. The ___________________________ ___________________________________ reports a
company’s revenues, expenses, and net loss or profit for a specific period of
time. It is also called a ________________________ ______________ __________________
statement.
22. _________________________________ is income received from the sale of products
and services. ___________________________________ ______________________________ are
costs of the day-to-day activities of a business.
Name: _________________________________________ Date: ___________________ Period: _________
Chapter 12- The Economics of Advertising
23. The ______________________________ ________________________ summarizes a
company’s assets, liabilities, and owner’s equity (___________ __________________)
as of a specific date.
24. An ______________________ is something of value owned by a business. Common
types of assets include ____________________, ___________________________
________________________________, _____________________________, and
_______________________.
25. _______________________________ _____________________________ are the amounts owed
to a business by its credit customers. Some assets are ___________________________
while others are _______________________________.
26. _______________________________ ______________________ exist physically, such as
equipment, furniture, buildings, and vehicles. _________________________________
______________________ are nonphysical resources and rights that are of value to
the business because they provide some kind of advantage in the
marketplace.
27. A _______________________________ is a financial obligation, or an amount owed by
a business. The most common type is ___________________________
___________________, which are amounts owed to suppliers or vendors for
merchandise or services purchased on credit by the business.
28. ______________________ _______________________ is the amount remaining after the
value of the liabilities is subtracted from the value of the assets. For
corporations, it is referred to as ________________________________ _________________.
12.3- Factors Affecting the Advertising Budget
29. The advertising plan provides the outline for how you will ____________________,
__________________________, or ________________________ customers about your
business and the products and services it offers.
30. Describe how the following can have an effect on the advertising budget.
1. Target Market________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
2. Media________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
3. Geography________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4. Product Life Cycle________________________________________________________________________________
________________________________________________________________________________
Name: _________________________________________ Date: ___________________ Period: _________
Chapter 12- The Economics of Advertising
________________________________________________________________________________
________________________________________________________________________________
5. Advertising Agency Compensation________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
31. The __________________________________ ___________________________ of payment is
based on the amount of money a business (advertiser) spends on advertising
media.
32. With a ________________ __________________________, agencies are paid an hourly
rate for different services provided. In recent years, the
__________________________________________ ____________________, which bases the
agency’s fee on the achievement of agreed-upon performance objectives, has
become more popular.
33. List and describe the six (6) methods used to measure brand awareness.
1. ________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
2. ________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
3. ________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4. ________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5. ________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
6. ________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________