Scenario 17

question 43

Multiple Choice

Scenario 17.2 Use the following to answer the questions.
The State Farm Group includes several companies. Probably the most well-known company in the group is the State Farm Insurance company, the largest auto and home insurer in the United States. State Farm Insurance provides protection for approximately 78 million policies on auto, fire, life, and health services. It is also a leading insurer of homes and autos in Canada. Another company in the State Farm group is the State Farm Bank, which was opened in 2000, beginning State Farm's entry into the financial services field. However, the State Farm Bank is not a traditional bank, in that it has no branch offices and its services are provided through State Farm agents, a call center, the mail, and on the Internet. It currently serves over 1.9 million bank accounts.
Refer to Scenario 17.2. When deciding on its advertising allocation for the coming year, State Farm Insurance could choose to spend the same amount as Safe Auto, another auto insurance company, or it could allocate an amount that is 10% of last year's premiums. If State Farm uses the same amount as Safe Auto, this method of advertising appropriation is known as the ____ approach; if State Farm uses the amount based on last year's premiums, the method would be _____.

• A) competition-matching; percent-of-sales
• B) arbitrary; competition-matching
• C) competition-matching; objective-and-task
• D) arbitrary; objective-and-task
• E) objective-and-task; percent-of-sales

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Definitions:

Generalized Traits

Characteristics or attributes of an individual that are broad and can apply to a wide range of situations or behaviors.

Ethnicity-Related Message

Communications or signals that relate to or are based on shared cultural, national, tribal, racial, or religious identity.

Slave Trade

The historical practice of trading slaves, whereby people were bought and sold as property.

Cultural Heritage

The legacy of physical artifacts and intangible attributes of a group or society inherited from past generations, including traditions, languages, and artifacts.