Exam 1 Study Guide
Exam 1 Study Guide ADV 3008
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This 11 page Study Guide was uploaded by Leticia Notetaker on Thursday February 4, 2016. The Study Guide belongs to ADV 3008 at Florida State University taught by Barry Solomon in Summer 2015. Since its upload, it has received 123 views. For similar materials see Principles of Advertising in Advertising at Florida State University.
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Date Created: 02/04/16
ADV 3008 Exam 1 The Advertising World The marketing concept - type of business philosophy where the needs of the target market and the strategies to make a profit are determined by the organization o A way to approach market o A business philosophy… If you can't be profitable, why be in the market place? Target markets are not static, always changing Marketing/products need to change with the changing preferences of the target market Marketing mix - components/blend of components o 4 p's Product - doesn't always have to be physical (services); what you receive in the end Price - what is needed to get the product, multiple ways of payment Place - where the top product can be bought (in a store or online) Also encompasses the steps/process of distribution (manufacturing -> consumer) Promotion - deals with all methods that persuade consumers to buy the product Coupons, samples, giveaways Where advertising lies All components of the marketing mix are needed to be successful (dependent on each other) Product, price, & place generally get worked on before promotion; need details of the product before promotion is possible Need a good balance between product development & promotion Ex. Toys r us is under-supplied, consumers look for toys but not available Bad for business Advertising - key advantages Bc it is paid for, it gives the company control of the message, delivery of the message (where & when), & timing On a per person basis, it is not expensive, which makes it appealing to companies Draw back - it can be very expensive, company must make sure that it is worth it, credibility issue bc companies want you to perceive a message the way they want Decision sequence model - process of effect strategy execution o different components o Situation analysis - fact finding stage; all factors (internal & external) that affect the company, analyze product, completion, financial. Abilities, control of the consumers o Once analyzed, then set objectives of goals that want to be achieved o Positioning - how consumers perceive the brand Brand - intangible attributes that are associated with the product (sponsorship, celebrities, the product is the same but ppl will perceive it in a certain light) Similar to being brainwashed, not really a difference but ppl still prefer one over the other Brand equity - the difference in perceived value between the product & the brand Cheap jeans from Ross vs expensive jeans from Express; still both jeans, do the same thing, quality may be a little better but consumers look for brands Loyalty, trust, in the brand; shopping is emotionally driven o Strategies - how you will accomplish your objectives Creative process, media strategies (delivery of messages), sales promo strategies (promotions, sales, coupons) o Budget setting ADV 3008 Exam 1 o Implementation - how to follow through, & carry out strategies o Evaluation - was the campaign successful? Were objectives met? Levels of involvement o Differences of how to go about buying a quick meal vs. a long time investment (car) No involvement product - consumer doesn't care about a certain product, not ever going to buy it; product not needed in an area so not sold Low involvement - interested in the product, has brand preference & loyalty, but consumer is not going to go out of their way to do extra research before making a purchase (ex. Expiration date, milk; paper towels) High involvement - product is going to be used, consumer will do research before making a large purchase (car, house, boat, appliances) Take many things into consideration (reviews, prices, options, availability) Also low price products can be high involvement; someone with an allergy may look closer into recipes or menu choices before ordering Difference types of products Hierarchy of effects - take you from brand unawareness to complete brand loyalty o How to go from one to the other o High involvement (Toyota corolla) Start with awareness Attitude - opinions (positive, negative, neutral) if attitude is not positive, consumer might not make a high involvement purchase reputation, miles per gallon, highway safety test, front wheel drive, like some attributes but not all) Behavior - like the car, but may not be able to afford it, find a better car for a better deal, more positive attributes o Low involvement products (popcorn) Many different brands, as long as one brand fits the qualifications for popcorn, you will be good Buttery, pops, tastes good Willing to make impulse purchases, try new brands if you have no specific preferences Schramm's one way communication - communication theory (know name) o 5 stage process o Source encodes a signal which decodes a destination o Source = advertiser, encodes = puts together, signal = ad, decode = message understood, destination = reaches consumer o Encodes - consumer may perceive the ad incorrectly Company cannot abruptly switch goals & methods of products o Signal stage - source understands a problem, but it does not relay the message that was originally intended to be told JCP example, customer wants to see the money they are saving o Decode - the receiver/consumer Message is misunderstood by consumer usually due to complicated wording o Destination - consumer understands the message, but the consumer forgets the message This happens bc we are not exposed to the message enough More money needs to be spent to get successful ads to make a difference Advertising Agency Organization o Ad agency, actually produces the ad & does the research for the company o Account servicing department - run the day to day business of service accounting ADV 3008 Exam 1 Ppl between the ad agency & the company; make sure everything is running smoothly, budget obeyed, everyone is happy, understand the research process, and the ad process Heavily involved in new business development in small businesses o Research department - involved throughout the whole process Conduct the research & fact finding, involved midway bc the do the concept testing to make sure ad is appealing to target market, & in the end when following through & making sure the ad was successful o Strategic planning - develop the general direction of the campaign & translate the research done & determine the best way to effectively deliver the ad to the target market o Creative department - art & copy are often teamed up Wordsmiths (copywriters) develop the verbal message Visual ppl (art directors) o Media - 80-90% of money spent are media dollars Space for the ads cost money (aside from the development of the ad) Responsible for the media to use to distribute the ad o Production - Smaller agencies outsource their production while large agencies have them internally o Project management - control the project from the beginning to end to make sure everything is running smoothly o Ppl work in teams, someone from each department, when working on a project A lot of collaboration Types of Agencies o Full service - Agencies becoming a one stop shop (has PR, social media, etc.); cost effective Some agencies specialize in certain niches, b2b, b2c o Media buying service - specialize in buying media (tv, digital media, paper) Advantage is their expertise & they normally buy in bulk which allows them to get discounts by pooling all their customers money together o Creative boutique - Web design, social media, youth marketing, foods ads (one specific type) Sometimes they just produce the concepts o In house Set up own agency vs seeking out elsewhere Do all work in house & do all the work for one account Have more control over the work, cost effective, & quick turn around Drawback - generally lack the creativity that can be found elsewhere o Rare for one major advertiser to have only one ad agency Consumer Segmentation Purpose - achieve the greatest amount of sales with the least amount of expense; advertisement to scale of sales Situation analysis - fact finding; analysis of internal& external factors that affect the organization Reasons to Segment o Wasteful to market to everyone with one product bc ppl have different preferences (phone plans) Can't develop separate products for each consumer, not profitable o make sure there is a large enough market to support the product Factors leading to Segmentation ADV 3008 Exam 1 o takes off after 1950 o in history companies made a product & only offered what they offered; didn’t try to please individual options Ex. First Ford cars o Consumer preferences o Higher standard of living; higher order needs are not essential but improve quality of life o Increased completion marketplace creates demand for new products ultimately consumers decide what products survive & which ones don't Aspects of Segmentation o Classifying consumers into profitable groups and strategies that will appeal to those groups o Developing strategies Consumer Classification o Enduring variables - stick with the consumer regardless of what is being purchased during a specific period of time Demographics - most popular variable Statistical study of population size (age, gender, race, household income, etc.) Geographics Deals with where you live, regional differences in consumption & brand preference Psychographics - who you are & how you think Cannot tell by just looking at someone (lifestyle, attitudes, interests, opinions) o Dynamic variables Change with an individual's relationship with a product used to develop a message and positioning strategies heavy vs. light users o use same product but at different rates o 80/20 rule (80% sales, 20% customers) o smarter to reach less ppl that are more likely to use the product early vs. late adopters o different ppl try a product for the first time at different points in time o early adopters (younger, risk takers, higher education & education) critical to a product's success word of mouth, spark interest in others o late adopters usually get products at a cheaper price end use: different consumers purchase the same product for different end uses (computers) brand loyal vs. brand switching o brand loyal - use of one brand of product to the exclusion of all others can be brand loyal in some areas, but not all most sought after consumers o brand switching - regular or periodic switching of brand purchases behavior product feature - what the product has, attributes o attributes translate into benefits for the consumer o product benefits - how the product helps the consumer benefit segmentation o different consumers seek different primary benefits from the same product (value, convenience) Media & Message Strategies ADV 3008 Exam 1 o Message - basic idea overall message (Nike "just do it") o Media - delivery system for the message how the message reaches the target audience o Segmentation Strategies 4 major differences in the degree of segmentation - undifferentiated - broader the audience, broader the media message a. one product, all consumers (ex. advertising for milk) - partially differentiated - different products for different segments b. several products, distinct consumer market segments, slightly different message & media strategy for each segment (ex. Porsche, hummer) - wholly differentiated - try to capture entire marketplace c. entire user population, appeals to a broader market, specific media & message ( ex. micky d's, coco-coal) - concentrated d. one primary product & consumer segment, specific media & message (Rolex) Specific Strategies (rifle strategies) Rifle message - specific statements about the product, specific media (cable tv, dm, etc.) rifle media - delivers message to specific audiences Broad Strategies (shotgun strategies) shotgun message - broad, general statements shotgun media - deliver message to broad audiences (tv, general interest mags, billboards) Finishing the Situation Analysis Product Life Cycle helps to understand a product represents the changes a product goes through from introduction into the market until it's pulled off the stage a product is impacts objectives & strategies; you wouldn't advertise a new product the way you would an old product 4 basic stages o stages are not equal in time or the same for all products o not every product makes it through the life cycle, a lot don't make it past the intro stage Stages & Strategic Implications introduction; low sales, heavy losses, little compensation o price is relatively high bc there is little competition o ads should create awareness & establish a position, how they want the brand to be perceived o sales promotions; retail incentives growth; rapid increase in sales if ad & promo are successful, rapid increase in compensation o price drops bc of increasing competition which is better for consumers o ad stimulate selective demand (demand for the product) primary demand - demand for the product initially (Samsung curve screen) o sales promotions consists of samples, coupons, expansion distribution & retail incentives o there is a lot of competition, ads emphasize a specific brand maturity; sales stabilize & competition is aggressive; need to reinforce position of brand ADV 3008 Exam 1 o the more competition the more price issues that are faced primary form of competition; consumers may ignore brands & focus on price o ads need to maintain their current position & highlight intangible benefits o discounts promote sales; consumer may become loyal to price decline; when producing a product is too expensive to turn around a profit o profits drop, costly to turn around o steep prices reductions happen over time o ads and sales promotions are minimal with little support The Company goals & philosophy o amount of time taken for a product to become profitable, use of expansion & product development financial resources o affects the amount of advertising possible bc budgets are determined by financial condition; not all financial conditions are the same production capabilities o Are they able to meet demand? ads that create more demand than production is a waste distribution & the sales force o advertising geography; is a product is only used for snow, don't advertise where it doesn't snow o distribution; if consumers can’t find the product somewhere they will be unhappy & likely to go elsewhere product portfolio o creates a diverse portfolio o mix of products made by the company; ideally products will complement each other o avoid product cannibalization; sales of one product hurt the sales of another product Macro Issues large scale issues that influence the company that they can't control the economy o can work against or with the company o consumer confidence; not confident in the economy's future, not likely to spend now o unemployment; worried about losing their job, affects the types of purchases being made o interest rates/credit score; poor credit, no loans to make purchases legal Issues; lack of familiarity with laws & regulations that affect the product size of market & growth potential o budget should be in line with the market size & growth rate baby boomers, millennials, gen y all have different issues & need diff methods of advertising larger portion of ads to minorities and their share in the market increases suppliers & natural resources; if products don't get to the store, there's no point in advertising o Labor disputes, natural disasters (ppl stuck indoors bc of weather, why advertise?) societal issues; as society changes advertisers change seasonality; seasonal purchasing pattern, plan around the seasons & existing patterns Conducting Research most companies don’t have money to conduct their own research spend limited budget during situation analysis o more efficient, identifies issues, advertisements moving in the right direction secondary research - info gathered for another purpose that is publicly available to the company o sales figures, census data, internet searches ADV 3008 Exam 1 o tells us what's happening in the marketplace & keeps track of competition o Advantages: already available so.... relatively inexpensive, rapid, large sample size, reliable, & source of comparative data o Disadvantages: tells what, but not why rarely fits needs, dated, widely disseminated, competitors primary research - research customized by the company to accomplish specific goals; more expensive o areas of primary research usefulness hierarchy of effects; awareness (knowledge), attitude (opinions & perceptions), behavior (sales & purchase intent) consumer information sources decide what form of media used to display ads classifying consumers, segmentation determining appropriate message strategy; concept testing the combination of primary & secondary research are a foundation for the next stage; setting the objective Setting Objectives & Establishing Positioning Purpose of Objectives; what you want to achieve a goal to measure accomplishment & provides strategic direction DAGMAR - type of objective specific to advertising o defining, advertising, goals for measured advertising results (conceptual understanding) 4 Elements of DAGMAR Objective o task - what the advertising is designed to do; increase awareness o audience - target the ad is designed to reach o degree - amount of change to achieve within the target o time - length of the campaign; within the month, by the end of the year o all components are necessary Benefits of Specific Advertising Goals o ppl perform better when they know what's expected of them o keeps advertising on target, provide focus, know all info needed o provides a common goal o specificity permits measurement; knowing if you're making progress Positioning relating to competition through a unique & meaningful benefit perception of the brand, creates differentiation o positioning & consumer perceptions If a consumer does not perceive that a product delivers a specific benefit, then it doesn't; perception is reality o Positioning strategies Attribute - physical feature that sets you apart from competition (Galaxy water resistant) Price/value - what the consumer receives for their money, price must match the product being received in return (JetBlue) Use/application - shows various ways the product could be used; may become more popular due to multiple uses (stove top stuffing eaten yr. round) Product user - different products are positioned for different primary users (Chevy Malibu) Product category - position brand in a specific category; different competing brands in the same group (chick-fil-a) ADV 3008 Exam 1 Competitor - positioning brand relative to a specific competitor; more aggressive (Chevy Cruz) Message Strategy & Legal Restrictions Components very broad, not a specified ad; creative strategy basic message or series of messages informative, persuasive, interesting presentation to capture audience's attention relevant issues & audience; target market Creative Brief written strategy that is about a page long made up of key elements found during analysis Components o insights about the target market; what motivates consumers o insights about the brand interaction with the target market; maybe more online sales vs. in store, adapt to the times o what the target market will know & feel; besides the physical product, after making a purchase what else does the customer get o key insight; the big idea, understanding the difference a product will have on your life Legal Constraints on Advertising FTC act of 1914 (federal trade commission) o established to police unfair methods of competition or deceptive practices, create a level playing field Non-FTC Regulatory Agencies o FDA - every food or drug product , mandate disclosures about medicine side effects o FCC - federal communication commission o postal service - enforce what can & cannot be sent in the mail o library of congress - regulate copywriters o state agencies o local agencies - restrict how many billboards & where the can be placed there is a lot of regulations about what can be said/done but that does not mean there is no freedom Deceptive Advertising Must have all 3 components to be considered deceptive legally… o actually cause deception; consumer believes something to be true when it's false o deceives a reasonable consumer; consumer's interpretation is considered reasonable o leads to material injury; there has to be damage, usually financial loss Comparative Advertising when a brand compares itself to another brand (ex. IPad vs. tablet) legal as long as o the comparisons are factual o differences are significant to the consumer Endorsements use the brand, but not exclusively; celebrities in car commercials qualified to make expert judgements; if not qualified to talk about a product, they don't Corrective Advertising Correct a problem that has already occurred; not a punishment! ADV 3008 Exam 1 o Prospective, designed to correct deception, money spent on correction must be reasonable in relation to the violation ($.25 cents on the dollar budget), o cannot prevent spontaneous advertising; gov can't prohibit a company from running a corrective ad while running new ads Liable Entities Corporations bc the company has to approve the final ad, ultimately at fault Advertising agencies' research can be fabricated or altered Spokesperson can make false or deceptive claims, but the individual actor is just reading a script Retailers are not involved in the ad process for the products sold in their stores Special Audiences Government pays more attention Elderly; targeted by real estate & retirement fraud Children; special requirements, highly regulated, ad limitations Self-Regulation National advertising division of the BBB, can refer deceptive ads to the government but can't do much else No legal authority, nice in theory Companies prefer to regulate themselves vs. Having the government do it Companies set their own moral & ethical standards Creative Appeals; without variety, advertisements are less effective Creativity; most important aspect o Relating to constructing, building, or creating o Seeing a problem & developing a unique & appropriate solution o Generation of new ideas (Mayhem with Allstate) The Big Idea; consumer based o The idea that separates the product from the competition, capitalizes on current problems & takes problems, feelings, & needs into consideration o Aflac duck campaign, BMW ultimate driving machine Creative Appeals o Rational (informative) vs. Emotional (how we feel) messages; all ads contain both o Appeals - the way these ideas are communicated to the audiences o When to use emotional Nothing important to say? Make it emotional to make it entertaining Characters used in ads help relate to emotions Borrowed interest - when a brand has no inherent interest it borrows from another area (celebrity, music, drama, characters) 40% of ppl will buy a product if they like the mascot Difference must be created in a generic benefit superiority in a subjective area; subjective area to each brand, mascot helps make the decision Campaign continuity helps strengthen the effectiveness of the campaign o Product Appeals Usually tilts to the emotional side, information based & focused on what the product does Product feature - focus on attributes, rational, informative, highlight physical features o Favorable Product Price ADV 3008 Exam 1 Retailers; sales, specials, everyday price o New About Product Introducing new products or changes to existing products, use words like "announcing, new, introducing" o Product Popularity; only works if your product is actually popular Have a niche in the market & be #1 or the top leader o Comparative Advantage/Comparative Advertising A brand is compared indirectly or directly with one of more competitors Direct = mention competitor's name indirect = will not mention, but competitor is obvious Useful when audience disagrees with the message or is exposed to opposing viewpoints Advertised brand isn’t the leader, gives smaller companies credibility o Head to head ads used to prove a point Comparisons are tangible; quantitative, objective, easy to compare The advertised brand with a smaller budget wants their ads to hit harder o Consumer Appeals Benefit oriented, what does the consumer get out of the product? Emotional Consumer service - benefits resulting from using the product (warranties make customer feel safer) Consumer savings - benefit of saving not money, but time & convenience (online) Self-enhancement - most emotional used appeal used in ads, makes user feel better about themselves (confident, powerful, beautiful) Fear - typically used with insurance companies o The more realistic the fear the more impactful; too much fear message is rejected, but too little will go unrecognized o Subsidized Product Trial what if the product doesn't work or gain popularity, doubts stimulates trial purpose without the risk Execution Styles Enhancements of strategy o Creative executions Techniques used to enhance strategies, ways to advertise, categories are not mutually exclusive; can blend or overlap o Product Executions Slice of life; focus on product in everyday life Product is the hero (phone helped boy), character encounters problem (woman running late, Olay wipes quick fix); solved by using the product Problem solving; similar to product saving the day, but in an unrealistic environment Demonstration ads show attributes or benefits of the product could include slice of life or problem solving execution News; advertising designed to look like news Reason Why ADV 3008 Exam 1 Justification for the product; expensive product, is it worth the money? "yes bc you're worth it" - worth the price Talking Head closest to coming into the home close up of a head delivering a pitch usually deals with high involvement or expensive products Testimonials essentially endorsements, merits of the brand & their experiences with it types of spokespeople experts; have an intimate knowledge, high credibility ordinary consumers; effective for unexciting products, relatable Just bc they are ordinary, that does not mean they were random celebrities; mix of product & consumer executions, perceived as experts, celebrity visibility (we know who they are), borrowed interest (product not exciting so they bring in a celebrity) Association with the product is enough to make others want it advantages increased awareness, often higher than the brand they represent brand identity, consistent with identity of celebrity emotional attachment, transfers to endorsements Disadvantages too many celebrities that they dilute the impact of the endorsement, reduce the effectiveness of each ad private lives are public; positive or negative, high risk (tiger woods) most contracts include a moral code (Lance Armstrong) o Consumer Executions Emotion can be effective if it ties back to product More emotional, less focus on the product Useful when interest created for product Humor - message generally comes at the end of the add, attention getting, consumer distraction, very subjective Animation - fictitious characters, borrowed interest, not just products for children (MetLife snoopy) Sex - implicit or explicit, gain sexual attractiveness by using product, Attention getting; improves recall, changes attitude Music - very emotional, remember brand name, attention getting, adds value, differentiates the brand, & maintains continuity which ties all ads together
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