The author mentions commercials running during prime time in order to ______

Read the following passage and mark the letter A, B, C, or D on your answer sheet to indicate the correct answer to each of the questions below.

The Influence of Advertising on Pricing

Advertising makes an immense difference in the popularity of a product. Studies have shown that consumers usually pay more for advertised products than non-advertised products. As a result, the marketing and advertising industry is a multibillion-dollar-a-year business. Local commercials can cost as little as several hundred dollars to produce, while national companies have been known to spend hundreds of thousands of dollars on a single commercial. Interestingly, the source for these expensive commercials is the consumers who view the advertisements from the comfort of their living rooms. Companies influence the prices that consumers pay in two ways.

When consumers purchase any product, they are obviously paying for the cost of manufacturing the product. However, they are also paying for the advertising campaign devised to convince consumers to buy the product. The more costly the advertising campaign, the higher the price paid by consumers. Companies are allowed to set these high prices because consumers have shown that they will continue to pay them. For instance, a multinational chain of coffee shops significantly raised its prices a few years ago, due in no small part to an expensive national advertising campaign. While regular customers noticed and were not fond of the hike, one was quoted as saying, “I doubt it will make an impact [on consumers]. It won’t change my habit." Indeed, it did not; the company experienced record sales in spite of the fact its prices were higher than its competitors'.

Another way advertising tends to affect product pricing is seen in the arena of perceived value to the consumers. The perceived value is the worth that consumers assign to a product. Studies show that often the advertising for a product determines its value more than the quality or necessity of the product itself. One way a company may take advantage of this perceived value is by running commercials during prime time. These ads are usually much more expensive than others. For example, a national commercial that ran during a popular American show cost close to $745,000 to run for thirty seconds. If people watching the show perceive that the product is more valuable simply because it was advertised during prime time, they are often willing to pay higher prices. So, whether it is seen in the cost of the commercials or the advertiser-assigned value, it is obvious that advertising drives product pricing and directly affects consumers.

The author mentions commercials running during prime time in order to ______.

• A. contrast effective advertising with unsuccessful products
• B. reflute the idea that consumers pay more for products they see on television
• C. explain how consumers justify paying higher prices for products
• D. provide a function of television advertising on a national level

• Câu 2: Mã câu hỏi: 40570

  The author uses the chain of coffee shops as an example of _____.

  • A. a costly advertising campaign that failed
  • B. the competitive nature of the advertising industry
  • C. a means by which large businesses deceive consumers
  • D. the acceptance of higher costs by consumers

• Câu 3: Mã câu hỏi: 40572

  Which of the following is NOT true about the perceived value of a product?

• Câu 4: Mã câu hỏi: 40573

  Which of the following can be inferred from paragraph 3?

  • A. Price is not the only factor affecting buyer decisions.
  • B. Consumers will pay less when they see expensive advertisements.
  • C. The lowest-priced products are usually purchased the most.
  • D. Consumers become angry when prices are raised too high.

• Câu 5: Mã câu hỏi: 40574

  According to the passage, which of the following is NOT true about the coffee chain's price increase?

  • A. Many customers stopped buying their coffee there.
  • B. The coffee chain raised prices so they could advertise more.
  • C. Customers acknowledged the change in prices.
  • D. The price increase did not change customers’ drinking habits.

• Câu 6: Mã câu hỏi: 40581

  Which of the following is true about the effect of higher-priced ad campaigns?

  • A. They have positive effects on customers.
  • B. They increase the price consumers must pay.
  • C. They are a response to consumer demand.
  • D. They result in competitor price matching.

• Câu 7: Mã câu hỏi: 40594

  How do companies determine the price they charge for a product?

  • A. By basing their prices on advertising costs and competitor prices.
  • B. By including the cost of advertising in the overall costs.
  • C. By determining the overall costs of making the product.
  • D. By choosing perceived value or manufacturing costs.

• Câu 8: Mã câu hỏi: 40598

  Which of the following can be inferred about pricing and advertising?

  • A. Products that are not advertised cost more than advertised products.
  • B. Companies selling higher-priced products usually advertise more.
  • C. Customers will pay little for a non-advertised product.
  • D. Local companies will not spend money on advertising.