IAI Actuarial Core Principles · Business Economics · Impact of advertising on sales and demand
An Indian mutual fund house adverts show its fund's returns directly against those of two named competing funds over the same period. This type of advertising is best described as:
This is comparative advertising, since the fund house directly sets its returns against named competitors to show superiority. It differs from generic advertising, which promotes an entire product category, and from institutional advertising, which builds the corporate image rather than comparing specific products.
- AGeneric advertising
- BInformative-only advertising with no persuasion
- CComparative advertisingCorrect
- DComplementary advertising
- Institutional advertising
Explanation
Comparative advertising explicitly sets a firm's product against named rivals to show superiority. Generic advertising promotes a whole category and institutional advertising builds corporate image. Nothing here involves complementary goods.
Did you get it right without looking?
One question tells you little. A timed set on Impact of advertising on sales and demand shows your real accuracy, how long you take and where you lose marks.
More Impact of advertising on sales and demand questions
- A life insurer's marketing team finds that each additional rupee of advertising yields progressively smaller increases in policy sales, and …
- All major Indian dairy cooperatives jointly fund a campaign urging consumers to drink more milk, without promoting any single brand. Which t…
- A mutual fund house finds that its advertising makes investors less sensitive to fee differences between its schemes and those of rivals, be…
- Which of the following is the most likely reason that informative advertising by a new digital insurance platform shifts its demand curve to…
- A general insurer's advertising raised sales by 6% in the year of a campaign, but advertising elasticity measured one year later shows a fur…
- A mutual fund company with monopoly power sets price where marginal revenue equals marginal cost. Its advertising raises the quantity demand…