CMA Marketing Planning & Budgeting 2 — Questions and Answers
Question 1: The objective-and-task budgeting method requires marketers to first:
- Match the industry average spend ratio
- Define specific marketing objectives and then estimate the costs of tasks needed to achieve them (Correct answer)
- Allocate whatever funds remain after operational costs
- Set budget equal to a fixed percentage of gross profit
Correct answer: Define specific marketing objectives and then estimate the costs of tasks needed to achieve them
The objective-and-task method starts by defining clear objectives, then identifies the tasks required to meet them, and finally sums the costs of those tasks to arrive at the budget.
Question 2: What is the competitive parity budgeting approach?
- Setting the budget to maximize short-term profit margins
- Allocating the same marketing budget as the previous fiscal year
- Setting the marketing budget to match or benchmark against competitors' spending levels (Correct answer)
- Investing only in channels where the company holds a competitive advantage
Correct answer: Setting the marketing budget to match or benchmark against competitors' spending levels
Competitive parity budgeting sets spending levels based on what rivals spend, under the assumption that matching their investment maintains market share.
Question 3: In marketing planning, what does the acronym SMART stand for when applied to objective-setting?
- Strategic, Measurable, Actionable, Realistic, Timely
- Specific, Measurable, Achievable, Relevant, Time-bound (Correct answer)
- Structured, Manageable, Aligned, Resourced, Tracked
- Scalable, Meaningful, Agile, Responsive, Targeted
Correct answer: Specific, Measurable, Achievable, Relevant, Time-bound
SMART objectives are Specific, Measurable, Achievable, Relevant, and Time-bound, ensuring goals are clear and trackable.
Question 4: Which term describes the ratio of a brand's advertising spend to total category advertising spend, used to gauge marketing weight relative to competitors?
- Share of wallet
- Cost per impression
- Share of voice (SOV) (Correct answer)
- Market penetration rate
Correct answer: Share of voice (SOV)
Share of voice (SOV) measures a brand's advertising spend as a percentage of total category spending, indicating its relative presence in the market.
Question 5: A marketing audit differs from a routine performance review primarily because it:
- Focuses only on digital channel performance metrics
- Provides a comprehensive, systematic examination of the entire marketing environment, objectives, and strategies (Correct answer)
- Is conducted exclusively by external consultants
- Measures only financial outcomes of marketing campaigns
Correct answer: Provides a comprehensive, systematic examination of the entire marketing environment, objectives, and strategies
A marketing audit is a broad, systematic evaluation of all marketing activities, environment, objectives, and strategies—not just financial results or a single channel.
Question 6: In a marketing budget, what is the primary purpose of a contingency reserve?
- To fund executive travel and entertainment expenses
- To cover unexpected opportunities or crises that arise during the plan period (Correct answer)
- To allocate funds for annual salary increases in the marketing department
- To set aside money for regulatory fines
Correct answer: To cover unexpected opportunities or crises that arise during the plan period
A contingency reserve provides financial flexibility to respond to unforeseen market opportunities, competitive threats, or crises without disrupting the core marketing plan.
Question 7: Which phase of the marketing planning process involves translating strategy into specific programs, responsibilities, budgets, and timelines?
- Situation analysis
- Strategy formulation
- Implementation planning (Correct answer)
- Performance evaluation
Correct answer: Implementation planning
Implementation planning converts strategic choices into actionable programs by assigning tasks, setting deadlines, allocating budgets, and designating responsible parties.
CMA Marketing Planning & Budgeting 2
The objective-and-task budgeting method requires marketers to first: