National Evaluation Series (NES) Business Studies Practice Test

In terms of advertising, what does it mean to institutionalize a company’s image?

1. Promoting specific products

2. Building a reputation and values

3. Starting a price war with competitors

4. Focusing solely on sales profits

The correct answer is: Building a reputation and values

To institutionalize a company’s image means to build a reputation and establish core values that represent the company in the long term. This process focuses on creating a brand identity that resonates with consumers and fosters loyalty. By emphasizing a consistent and positive image, a company can convey its mission, values, and culture, which helps differentiate it from competitors and aids in customer relationship management. In contrast, promoting specific products is more transactional and does not necessarily affect the overarching brand image. Starting a price war with competitors centers around pricing strategies rather than building an identity. Lastly, focusing solely on sales profits neglects the broader approach to reputation and brand strength, which can lead to long-term success beyond immediate sales figures. Building a reputation and values ensures that a company is viewed positively by the public, which is essential for sustainable business growth.