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Exam 1 review

by: Jordyn

Exam 1 review ADV 205

GPA 3.6
Principles of Advertising
J. Bukovac-Phelps

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book notes and lecture notes... great resource for the online test questions
Principles of Advertising
J. Bukovac-Phelps
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This 28 page Study Guide was uploaded by Jordyn on Friday February 27, 2015. The Study Guide belongs to ADV 205 at Michigan State University taught by J. Bukovac-Phelps in Spring2014. Since its upload, it has received 262 views.


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Date Created: 02/27/15
Advertising Usually paid form of communication Structured Identi ed sponsor Tries to persuade or in uence Conveyed through a variety of media Nonpersonal Brand advertising Retaillocal Political Directory Directresponse Businesstobusiness Institutional any business any product about themselves how good they are and what they do PSA Interactive Plays many roles Marketing role 0 Product place price promotion 4 P5 of marketing Communication role Economic role 0 Can control cost man who sells cony dogs and charges 250 and another guy who charges in better location for 6say commercial for 250 so knew which to go toman for 6 drops prices Societal role 0 Stereotypes old people I39ve fallen and cannot get up Functions and effects of advertising as marketing tool Identify and differentiate products Communicate info Introduce consumers to try new products and reuse Stimulate distribution Increase product use Build value brand preference and loyalty Lower overall cost of sales Mandate for effectiveness Today advertising is in a bind Advertisers expect speci c results that lead to sales Advertising must be effective 0 For good ads strategy creativity execution Strategy has to do what client needs it to do Creativity no one wants to see the same old ad that goes in one ear and out the other Execution to come up with new idea 0 Truly great ads use all 3 12751900 preindustrial age Chinese invent paper Europe gets its rst paper mill 0 Paper and writing fro the elite 0 Most people are illiterate 1440 Johannes Gutenberg invents the printing press Germany 1472 rst poster ads on church doors 1650 rst newspaper ad reward for 12 stolen horses 1704 0 Boston newsletter asks readers to places ads for real estate 0 Soon after rst ad in America for property in long island 1730 ben franklin starts using headlines and illustrations in his paper 1741 rst American magazines Phiadelphia First ads were personal 1759 Samuel Johnson 25 centuries into ads he already writes how people hate ads 1800industria revolution animals are being turned into machines 0 More productsmore advertising 1841 Volney B Palmer rst advertising profession works for customers instead of business 1844 rst magazine ad Civil war spurred growth of print because need thousands of uniforms which triggered mass production women went to the factories to earn money instead of making soap and bread 1867 earliest billboards on railroads 1869 Francis Ayer opens NW Ayer amp Sons rst advertising company like ones today 1870 john E powers short to the point ads 1880 miracle cure patent medicine make extravagant hyperbolic ads 0 Products are made with cocaine heroin and alc and made consumers unhappy and sick it will continue until the 19005 when the government and literature steps in 1893 rst catalog 1896 Grover Cleveland establishes mail boxes and post of ces 1900 the branding broom Mass production satis es basic consumer needs Manufactures start branding and packaging not about getting out enough products its about being able to tell them apart 1902 lifebuoy soap 1903 commercial paci c cable company lays the rst paci c telegraph cable 1904 Campbell kids 1905 Gillette creates the rst national ad plan series More products than consumers need 1906 FDA not successful at regulating advertising 1908 ford revels the model t 850 1910 electricity becomes standard 1910 john wanamaker opens 12 story department store 19111920 dawn of the radio 19201930 1911 advertising industry wants to clean up its act truth in advertising codes 0 Needs to get back consumer trust 1911 rst sex appeal ad 1913 camel begins advertising as rst packaged form 1912 federal trade commission act is established to further curb dishonest advertising 1914 wwl 0 Advertising asks to support the war makes us look good 1920 Americas rst radio station 1920 Americas advertising industry 3 billion dollars the soap opera stage broadcast radio sells its rst ad10 minutes for 100 consumers are able to use credit Claude Hopkins publishes scienti c advertising 1922 1920 1923 1924 Ayer and sons produce the rst sponsored radio show 1926 john Caples writes on the most famous headlines 1928 Lis terine ad ve rtises cures colds and so re throats 1928 lucky strike spends 123 million on advert isingmost Spent by and company 1929 stock market crashes and great depression 0 Research companies align advertising with consumer behavior and attitudes o Gallup poles 1 9302 more than half of us homes have radios the great depression leaves publishers nancially squeezed newspaper is all people can afford so prime source of entertainment 1930 Chicago creates the rst daytime radio soup opera for stay at home moms 1933 federal communication commission established 1935 Leo burnet company was opened in Chicago 1936 life publishes its rst edition 1937 American tobacco company pays senators 1000 to endorse lucky strike cigarettes 1938 congress passes the wheelerlea amendment able to go after advertisement a nd govern ment can control advertisements 19411950 a time of war TV and The telephone WWII propaganda creates a whole mew level of a clutter another chance to use war to advertise 1940 John Ca pies pioneers basic ad testing measu res which headline is more effective 1941 7500 sets in NYC households 1941 rst commercial bulova clocks advertised on 4000 sets 1946 advertising saying more doctors smoke camels even though its not a true headHne 1946 half of American population has phone 1947 brand names and slogans become protected MampMs melt in you mouth not your hands 19511960 the golden age of creativity 1950ish David Ogilvy popular ad person 1954 cbs becomes the largest advertising medium in the world 1954 tv ad revenue surpasses that of radio and magazines leo burnett agency launces the Marlboro man campaign it becomes the best sellinf cigarette brand 1958 The national association of broadcasters bans subliminal ads 1960 we think small vw campaign by doyle dane berbach introdUCes the creative team copywriter art director 0 Its ugly but it gets you there 19611970 the cynicism epoch A ower power anticonsumerism counterculture emerges in favor of love individuality and trust 1963 pepsi generation ads spark the cola wars 1964 the new Yorker and other magazines ban cigarette advertising surgeon generation calls smoking harmful 1967 McDonald39s airs rst TV commercial burgers fries and shakes are fun 1967 the first super bowl airs on cbs and 160 seconds of ad time costs 85000 today it costs around 4 million for half of the time 1968 7up sells individuality quotthe uncolaquot 19711980 the brand image era 1970 telemarketing emerges 1971 Nation advertising review board to monitor distasteful ads 1971 congress prohibits broadcasting ads of cigarettes 1972 positioning becomes important 1975 vcrs allow customers to fast forward through ads 19811990 selfindulgence decade big hair and big spending 1980 cut ads to max pro ts and make 30 second ads 15 1981 IBM personal computer FCC eliminates regulations on commercial television called Cable Communications act makes infomercial bonanza 1984 apple launces its rst mega successful macintosh with the rst super bowl commercial 1988 bellsouth company to deploy caller id 1988 cable tv is in half of us households 19912000 The onset of Integrated Marketing Advertising alone cannot drive sales 1990 cell phones reach mass market 1993 internet has 5 million users around the world 1994 email spam 1995 search engines 1998 seth godin permission marketing 1998 this year the average consumer will see or hear 1 million marketing messages almost 3000 per day 1998 google and MSN 1998 TiVo 2000 internet has 400 million users 2000 ads start to invade mobile 200stock market crashes and dotcom bubble bursts 20012010 The digital age Ch1 The Evolution Of Advertising Obama change o Positioning term marketers used when they create an image of a product person organization or idea in the minds of a group of people 0 Spend heavily on advertising 310 million dollars 0 Second campaign Obama logged twice as many facebook likes as Romney and 20 times as many twitter retweets 0 John F Kennedy was the rst president to effectively use the new medium television Obama was the rst president to effectively use social media lntergrated marketing communications the coordination and intergration of messages from a variety of sources What is advertising Exposed to hundreds maybe even thousands of commercial messages every day the various efforts and tools companies with customers and prospects including newspaper ads event sponsorship publicity telemarketing digital ads and coupons to mention just a few Albert Lansker father of modern advertising 0 De ned it as salesmanship in print driven by a reason Why long before radio tv or internet Journalists would de ne advertising as communication public relations or persuasion process Business people would de ne advertising as marketing process Consumers may de ne it as nuisance is the structured and composed non personal communication of information usually paid for and usually persuasive in nature about products by identi ed sponsors through various media 0 Type of communication Advertising is typically directed to groups of people not individuals Consumers people who buy products like cars deodorant or food for their personal use A type of non verbal mass communication Advertising is PAID for by sponsors an advertisement serving to the public interest often for non pro t organization carried by the media at no charge A poster on a school bulletin board promoting a dance is not paid for but is still and ad structured non personal persuasive communication Advertise both 0 langible products such as suits soaps and soft drinks 0 bundle of bene ts that may or may not be physical that are temporary in nature and come from the competition of a task Advertising is used to advocate a wide variety of whether economic political religious or social the particular good or service the company sells An add identi es a sponsor an instrument that helps carry or helps transfer a message from the sender to the receiver 0 Advertising medium is any non personal means used to present a target audience 0 Ex radio advertisn tv ads newspaper google ads ect i passing information especially product recommendations in an informal unpaid person to person manner rather than by advertising or other forms of traditional marketing o Is communication medium hasn t really been considered an advertising medium 0 Twitter fb makes uses reconsider this belief traditional form to send messages in adverting print or broadcast media that reach very large audiences 0 Ex radio tv newspapers magazines and billboards The role of advertising in business Business functions Operations productionmanufacturing Financeadministration Marketing 0 Only one whose primary role is to bring in revenue What is marketing 0 as it applies to adverting the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and a society at large Marketing is a a sequence of actions or methods aimed at satisfying consumer needs pro tably 0 Usually broken down into the 4ps of the marketing mix Developing products pricing them strategically distributing them so they are available to customers at appropriate places and promoting them through sales and advertising Role of advertising promote inform persuade and remind groups of customers or markets about need satisfying value of the company s goods and services Advertisers and the marketing process Advertising helps the organization achieve its marketing goals as well as market research sales and distribution the statement of how the company is going to accomplish its marketing objectives the strategy is the total directional thrust of the company the howto of the marketing plan and is determined by the particular blend of the marketing mix elements the Ps which the company can control 0 Who the targets of advertising should be I what markets the advertising should appear and what goals the advertising should accomplish advertising objective declares what the advertiser wants to achieve with respect to consumer awareness attitude and preference the advertising strategy describes how to get there the creative strategy and the media strategy Economics the growing need for advertising Principles of free market economists Our economy is based on the notion of competition 1 Selfinterest people and organizations tend to act in their own self interest people are acquisitive and always want more for less 2 Complete information access by buyers and sellers to all information at all times about what products are available at what quality and what process leads to greater competition and lower prices all around 3 Many buyers and sellers having a wide range of sellers ensures that if one company does not meet customer needs another with capitalize on the situation by producing a more marketresponsive product 4 Absence of externalties sometimes the sale of consumption of products may harm or bene t other people who are not involved in the transaction and didn t pay for the product government may use taxation or regulation to compensate for or eliminate the a Externalities bene t or harm caused by the sale consumption of products to people who are not involved in the transaction and didn t pay for the product Functions and effects of advertising in a free economy identi es products and their source and differentiates them from all other products Basic function of advertising to communicate information about the products its features and its location of sale Coca cola persuaded government to give their drinks instead of alcoholic coke borrowed 55 million dollars to establish 64 bottling plants this increased product use because soldiers preferred coke over Pepsi 10 to 1 First international coke bottling plants were established in 1906 o Stimulated distribution of a product Builds value brand preference and loyalty The evolution of advertising as an economic tool period of time between the beginning of written history and roughly the start of the 19th century during which the invention paper and the printing press and increased literacy gave the rise to the rst forms of written advertising Wasn t a need until goods started becoming produced in mass quantities First merchants hung carved signs in front of their ships so passersby could see what was being sold there In the 14405Johannes Gutenberg invented the printing press in Germany First mass medium the newspaper 1472 rst ad in English handbill tacked on church doors in London announcing a prayer book for sale 1650 rst newspaper ad reward for stolen horses 1700 worlds population was about 600 million 1758 beginning of puffery 1704 Boston news letter began carrying ads Ben Franklin father of advertising arts rst known American to use illustrations in ads The lndustrializing Age Mid 17005 industrial revolution by 18005 reached north America Machines mass produced goods and for the rst time it cost people less to buy a product than to make it themselves Mid 18005 words opulation was 12 billion period of time from the mid 17005 through the end of WWI when manufactures were principally concerned with production Price currents placing announcements in publications to let retailers know about sources of supply and shipping schedules for unbranded commodities Volney B Palmer set up advertising profession in Philadelphia 1869 Francis Ayer formed an ad agency rst company to charge a commission based on the net cost of space 1890 ayer became the rst ad agency to operate as agencies do today 1839 added credibility and a new world of creativity with photography 18405 maazine ads A historical period covering approximately the rst 70 years of the 20th century growth and maturation for US industrial base consumer packaged goods Consumer packaged goods everyday use consumer products packages by manufactures and sold through retail outlets generally goods like food and beverages health and beauty care cleaning products and detergents that get used up and have to be replaced frequently During the industrial age manufactures changed their focus from a product orientation to a sales orientation 19205 us was rich and powerful salesmanship 0 Scienti c advertising written by Claude Hopkins Radio advertising nations primary means of mass communication October 29 1929 5tock market crashed advertising expenditures plummeted manufactures portraying their brands as different form and better than similar competitive products through advertising packaging or physical product differences The TV in 1941 greatest expansion of any medium to that time 19405 and 19505 people tried to climb the social ladder by buying more and more modern products Rosser Reeves the distinctive bene ts that make a product different than any other reason marketers believe consumers will buy a product even though it may seem no different from may others just like it 0 As more and more products showed up all offering the same thing the effectiveness of this strategy wore out the next strategy marketers searched for unique groups of people whose needs could be addressed through specialized products Advertisings emphasis switched from product features to brand image 19705 positioning era 0 What really mattered is how the brand stacked up against the competition in the consumers mind 0 association of a brands features and bene ts with a particular set of consumer needs clearly differentiating it from the competition in the mind of the consumer Period of cataclysmic change 1980 people rst became truly aware of the sensitivity of the environment in which we live came from energy shortage of 1970519805 when advertising was used to slow the demand for products Companies began buying companies starting megamergers and recession stopped the buyings Two economic factors characterized marketing in this period 1 The aging of traditional products with a corresponding growth in competition 2 The growing af uence and sophistication of the consumer public led by the baby boomer generation Mid 19805 avalanche of ads especially in toiletries aimed at the quotmequot generation direct inducement offering extra incentives all along the marketing route for manufactures through distribution channels to consumers accelerate the movement of the product from the producer to the consumer 1990 advertising had lost 25 of its share with marketing communications Advertising industry began suffering from over population In 3 years advertising agency lost over 13500 jobs About 40 magazines went out of business during the two year slump Mid 19005 US marketers had begun shifting dollars back from sales promotion to advertisingto rebild value in thei brands 1994 ad budgets surged ahead by 81 percent to 150 billion nationally 2000 US advertisers spent 2475 billion 2001 recession stock market crash and 911 advertising stopped internationally By 2005 when increased again US reached 264 billion Explosion of the internet The global interactive Age Looking at the TwentyFirst Century New millennium the rest of the world has caught up to America Typically advertising expenditures are higher in countries with higher personal incomes Now eastern European countries encourage private enterprise and realize the bene ts of advertising delivering programming to a speci c group de ned by demographics andor program content rather than mass appeal Usually used to describe cable networks the opposite of broadcasting 0 Now small companies can use tv to appeal to a limited clientele DVRs Tivo and allows customers to pause and fast forward live tv Personal computers phones internet and email give advertisers new media for reaching potential customers 2006 abc was the rst network to offer hit shows for internet download just days after they aired Advertising is turning into a twowavmedium consumers with PCs internet and cable tv can choose the information they access and then researching the product information they desire 2008 global economy began an economic shut down people shut down on advertising newspapers shut down 2011 the US economy was growing upward again but very slow In effort to do a betterjob of relationship marketing companies must be consistent in what they say and do Society and ethics the effects of advertising From advertising you know something is available Newspapers magazines ect facilitate freedom of press 1906 pure food and drug act protect the publics health and control drug advertising 1914 federal trade commission act protect the public from unfair business practices including misleading and deceptive advertising Even advertisers made groups to help the integrity of the industry 0 ANA AAFBBB Biggest problems today puffery advertising to children the advertising of legal but unhealthy products and advertising ethics Overall advertising has a pronounced effect on society as well as economy LECTURE 2 Advertising and social responsibility Ethical issues advocate does it have support accurate truthful and acquire making us want things Develop most effective attention grabbing messages possible crossing the line unusual very creative offensive ETHICS moral and value standards that act as a behavioral guidelines for a society39s citizens everyone has different ones Unlike laws and regulations ethical codes are generally not written down 10 commandments Murder what about murder of animals ethics aren39t always black and white Concerns about advertising Drives up cost of product Create a barrier to market entry for small rms Merchandises too many aspects for our culture what kind of car do you drive what kind of shoes do you wear Sells inferior products if its legal and not dangerous there39s someone out there who39s advertising it even if its poor quality Sells unhealthy and dangerous products Sets unrealistic expectations expect products to perform at a certain level and they don t ls done in bad taste sex to sell violent Invites censorship big corporations like coke say we will pull all our advertising if you don t post this can control media Creates visual pollution Pushes one country39s culture onto another McDonald39s Positive economic effects of advertising Value of products satis es psychic and symbolic wants and needs we all drive different types of cars Prices advertising helps reduce the cost of newspaper Competition which is cheaper Consumer demand cell phones educated consumer what it is turn heat down to save energy To consumers saves time and informs Business cycle things get out of trend and then can come back in style If drop advertising on the down trend people will forget about you and when you come back on the rise it will cost more money to get people to remember you Social responsibility PSA Smoky for forest re prevention Flu prevention Spousal abuse what39s too far Social impact of advertising Deception subliminal advertising value system proliferation of advertising use of stereotypes Controversial issues in advertising Taste and advertising product categories and tastecurrent issues Puffery exaggeration best better tastier lega right now Papa johns better pizza better ingredients Offensive messages Marketers have a range of creative options for their messages each with a trade off Safe but boring Attention grabbing but on the edge 0 Our prices are sofa king low Stereotypes Typically womenneed of help and rescue Racial and ethnic stereotypes Gay and lesbian consumers more positive now Subliminaladvertising Shadows Things you don39t see are the things that you do Carrot and 25 More controversies Tobacco alcohol gambling prescription drugs Advertising to children Portraying children in sexual ways Ronald told me to eat a happy meal and I like a Ronald so ill eat a happy meal Kids are much more susceptible to advertising Advertising and the law The rst amendment freedom of expression Difference between quotspeechquot and quotcommercial speechquot Commercial is stronger and looking for a pro t and is dif cult to sHence Valentine v Christensen 1942 Valentine was only allowed to make yers of political views went to supreme court to say advertising is not protected by the rst amendment Bigelow vs Virginia 1975commercial service deserves a degree of protection from the rst amendment Virginia State Board of Pharmacy vs Virginia Citizens Council 1976 wanted to advertise where they could advertise drug prices Bates vs St Bar of Arizona 1977 allows bars to advertise When can commercial speech be regulated o Truthful advertising about lawful productsservices 0 Government must assert a substantial state interest to justify the regulation 0 Government must demonstrate that the regulation of advertising directly advances their concern 0 If the answer is yes the regulation must go as far as necessary to solve the problem no more than is necessary Advertising and the FTC Federal trade commission FTC WheelerLea amendment Regulate deception substantiation remedies Deception 0 Must mislead the consumer 4 out of 5 doctors agree 0 quotReasonable consumerquot not kids 0 Must lead to material injury Unfair Advertising 0 Causes or is likely to cause substantial injury to consumers 0 Which is not reasonably avoidable by consumers turn TV off Shut magazine 0 And is not outweighed by countervailing bene ts or to consumers or to competition Substantiation o If you have proof the FTC will make sure you do 0 Listeriene prevents colds had 10 year olds report when they had symptoms of a cold control vs experimental Comparative Advertising 0 Dominos is better than papa johns 0 When you say you work better than another company you need proof to back it up Endorsements o Truthful not misleading o What they experience must be realistic to what I experience ifl use the product 0 If there39s a connection between the endorser and the marketer they need to be clear I Demonstrations o Utilize different products to substitute for others 0 In studio and eating ice cream will melt so can use a replacement as long as it has the same characteristics 0 FTC deceptive and unfair advertising remedies o Consent decrees ceaseanddesistorders corrective advertising substantiating advertising claims af rmative disclosure consumer redress and is the ad agency legally responsible o Corrective advertising ex this bread has more energy but it really has more calories Food and drug administration 0 Oversees package labeling ingredients Federal communication commission has indirect control over advertising 0 Can issue and revoke broadcasting stations 0 Can ban messages that are deceptive or in poor taste Social responsibility and selfregulation o Selfdiscipline 0 Media groups tv radio magazines newspapers Organized groups 0 National advertising review council 0 National advertising division 0 Nation advertising review board Self discipline 0 Most advertisers and agencies have inhouse review procedures Self regulation 0 American association of advertising agencies 0 American advertising federation Advertising affects the effects the economy Ch2 The Adverting is something other than free speech The evolution of advertising Society determines what is offensive excessive and irresponsible What happens when brands associate themselves with celebrities who attract the wrong kind of attention Many controversies about advertising Advertising isn t journalism education or entertainment it is something completely different even though it acts like them Does advertisng make us more materialistic A society is best served by empowering people to make their own decisions and act as free agents within a system chacterized by four fundamental assumptions self interest many buyers and sellers complete information and absence of social costs 0 Externalities bene t or harm caused by the sale or consumption of products to people who are not involved in the transaction and didn39t pay for the product goal of society to promote behaviors that foster the greatest good for the most people and offers a system of economic activity 0 Has accomplished that goal better than any other system in history Economic Impact of Advertising Marcel BleusteinBanchet father of modern French advertising 0 The level of advertising investment in a country is directly proportional to standard of living Effect on the Value of Products the increase in a worth of product or service as a result of a particular activity The added value is provided by the communication of bene ts over and above those offered by the product itself By simply making a product better known advertising can make the product more desirable to the consumer advertising ads value to the brand Advertising also adds value to a brand by educating customers about new uses for a product Kleenex was originally makeup remover In a freemarket system consumers can choose the values they want in the products they buy low price vs status 0 Many of our wants are emotional social or psychological rather than functional Effect on prices By encouraging completion advertising has the effect of keeping process down Advertising is paid for by the consumer buying the product Advertising enables manufactures to mass production which lowers the unit cost of products Advertising has no affect on prices when advertising has had effects when industries are deregulated National advertising stresses features that make their brands better so uses drives retail process up Effects of competition Advertising by big companies often has only a limited effect on small business because a single advertiser is rarely large enough to dominate the whole country The freedom to advertise encourages more sellers to enter the market Effect on consumers and business Advertising can help get new products off the ground giving people more complete information stimulating consumer demand for a whole product category Selective demand consumer demand for the particular advantages of one brand over another declining markets Manufactures who want to beat the competition need to make their product different The freedom of advertising encourages businesses to create new brands and improve old ones When business cycles dip companies cut advertising expenditures Companies that continue to invest in advertising during a recession are better able to protect and sometimes build market shares The abundance principle the economic impact of advertising in perspective Advertising pays back more than it costs A bottle of coke contains about a penny for advertising The 20000 car cost 400 advertising states that an economy produces more goods and services than can be consumed it keeps consumers informed of their other alternatives allows companies to compete more effectively for consumer dollars Advertising stimulates competition Advertising stimulates a healthy economy The social impact of advertising Deception in advertising Advertising is so frequently deceptive exaggerated subject claims that cant be proven true or false such as quotthe bestquot quotpremierquot or quotthe only way to yquot Advertising by nature is not complete information People except advertisers to be proud of their products and don39t mind if they puff them a little except when they cross the line The subliminal advertising myth Advertisers intentionally create ads with sexual messages hidden Wilson Byan Key advertisements with messages often sexual supposedly embedded in illustrations just below the threshold interpretation Complete information advertising information doesn t give consumers information it manipulates us through brainwashing The consumer acting on hisher own selfinterest makes the decision Advertising and our value system Advertising degrades peoples value systems Advertising is so powerful consumers are helpless to defend against it Only 17 of us consumers see advertising as a soure of information to them decide what to buy Advertisers spend millions trying to convince people that their products will make them sexier healthier and more successful The proliferation of advertising In the united states alone the average person may be exposed to 500 to 100 commercial messages a day Nearly 13 of immediately leave a website if they think its too cluttered and half come away with an less favorable opinion of the advertiser FCC reconsidered time limits for commercials on tv Stereotypes in advertising Insensitivity to minorities women immigrants disabled elderly others Latinos African Americans Asians and others are now usually portrayed favorably in ads Positive role portrayal in some mainstream ads has had a positive effect on the self esteem of African American youth Problems still exist especially in local and regional advertising and in certain advertising like beer and sports With increasing numbers continuing academic studies of minority and sex role stereotype greater attention will be focused on these studies Offensive advertising Parents were incensed at Abercrombie and Fitch ads because they perceived them as pornographic What is bad taste is perfectly acceptable to others Where nudity is relevant to their products people are less likely to regard it as offensive The social impact of advertising in perspective Advertising encourages the development and speeds the acceptance f new products and technologies By encouraging mass production it keeps prices down Advertising is criticized for giving less than complete information and sometimes unwanted problems it should also be applauded when it contributes to the bene ts of a free economy Social responsibility and advertising ethics An advertiser can act unethically or irresponsibly without breaking any laws doing what the advertiser and the advertisers peers believe is morally right in a given situation doing what society views as best for the welfare of people in general or for a speci c community of people Ethics and social responsibility can be seen as the moral obligation of advertisers not to violate our basic economic assumptions even when there is no legal obligations Advertisers social responsibility Concerned consumers interest groups pressure advertisers when they perceive the publics welfare is at risk Ethics of advertising Ethics comprise two interrelated components the traditional actions taken by people in a society or community and the philosophical rules that society establishes to justify such past actions and decree future actions Customs and principles create the primary rules of ethical behavior in society and enables us to measure how far an individual or company strays from the norm Advertising today is closely watched and regulated profession Modify advertising to make more complete information and reduce unwanted externalities Current regulatory issues affecting US advertisers Freedom of commercial speech Supreme court differentiates between quotspeechquot and quotcommercial speechquot Decisions over last 2 decades say truthful commercial speech is also entitled to signi cant if not full protection under the rst amendment Started in Virginia state board of pharmacy vs Virginia citizens consumer council Central Hudson test 0 Does the commercial speech at issue concern a lawful activity 0 Will the restriction of commercial speech serve the asserted government interest substantially 0 Does the regulation directly advance the government interest asserted o Is the restriction no more than necessary to further the interest asserted l982 physicians and dentists can advertise Freedom of commercial speech is far from settled Tobacco Advertising Tobacco is legal kills many people and costs tax payers millions every year in health costs 1998 limits on brand name promotion to younger people Joe the camel Advertising to children Kids are not sophisticated customers The nature of children advertising can lead to false beliefs or highly improbable product expectations Advertisers should not intentionally deceive children Children39s advertising review until reviews and evaluates child directed advertising in all media Sweeden and Norway do not allow any advertisments during childrens programs Consumer privacy of or pertaining to an individuals right to prohibit personal information from being divulged to the public Privacy is an ethical issue as well as a legal one Many websites create pro les of their visitors to get data Some sites track users sur ng habits to better target ads for products small pieces of information that gets stored on your computer when you download certain web sites These cookies can keep track of whether a certain user has ever visited a speci c site this allows the website to identify returning users and to customize the information based on past browsing or purchase behavior Google Facebook and apple has potential access to an enormous amount of information about web users Only 27 of internet users accept that tracking is helpful 54 nd it harmful 87 think websites should ask permission Can disable cookies but some websites require that you have it on Federal regulation of advertising in the United States The US federal trade commission FTC Major regulator of advertising for products sold in interstate commerce FTC de nes any ad which there is a misrepresentation omission or other practice that can mislead a signi cant number of reasonable consumers to their department Does the ad convey a false impression even if its true quotFreequot quotlow costquot FTC de nes advertising that causes a consumer to be unjusti ably injured or that violates public policy Didn39t warn of safety problem Alleged unfair practice involves substantial unavoidable injury to consumers Injury is not reasonably avoidable to consumers Injury is not outweighed by bene ts to consumers or competition advertising that claims superiority Any advertiser that misrepresents its own or another39s rms goods services or activities is vulnerable to a civil action Advertising suspended violations if it receives complaints the FTC may decide to investigate an advertiser FTC looks for substation endorsements and af rmative disclosures evidence that backs up cited survey nding or scienti c studies that the FTC may request from a suspected advertising violator Ftc also scrutinizes ads that contain questionable endorsements or testimonials o the use of satis ed customers and celebrities to endorse a product in advertising 0 use of satis ed customers and celebrities to endorse a product in advertising advertisers must make their products limitations or de ciencies Remedies for unfair or deceptive advertising 1 negotiate with the advertiser for a consent decree 2 issue a ceaseand desist order 3 and or require corrective advertising document advertiser signs agreeing to stop the objectionable advertising without admitting any wrongdoing may be issued by the FTC if an advertiser wont sign a consent decree prohibits further use of an ad can be ned up to 11000 per showing of offending ad may be required by the FTC for a period of time to explain and correct offending ads The FDA Authorized by congress to enforce the federal food and drug and cosmetic act and several other health laws Monitors import transport and storage and sale of over 1 trillion worth of products annually FDA requires manufactures to disclose all ingredients on product labels FDA allows pharmaceutical companies to advertise their drugs on broadcast medias long as they mention any possible side effects 1994 congressional law setting stringent legal de nitions for terms such as fresh light low fat and reduced calorie setting standard serving sizes and requiring labels to show food value for one serving alongside the total recommended daily value for one serving alongside the total recommended daily value as established by the national research council Federal Communications Commission The FCC can restrict both the products and the content of ads Fcc and JanetJackson super bowl ned CBS The patent and trademark of ce and the library of congress something produced by the mind such as original works of authorship including literally dramatic musical artistic and certain other intellectual works may be legally protected by copyright patent or trademark a grant made by the government that confers upon the creator of an invention the sole right to make use and sell that invention for a set period of time By registering trademarks and copyrights the government helps businesses protect their investments promote their goods and services and safeguard consumers against confusion and deception in the marketplace any word name symbol or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others If someone39s trademark is similarly close to yours you can sue for trademark infringement Copyright an exclusive right granted by the copyright act to authors and artists to protect their original work from being plagiarized sold or used by another without express consent Exclusive right for life plus 70 years State and local regulation Any maker of an ad found to contain untrue deceptive or misleading material is guilty of a misdemeanor Different states have different regulations about what can be advertised Continuous sale violates the sates business and professions code Nongovernment regulation The better business bureau BBB largest US business monitoring organizations Local bureaus contact violators and ask them to revise their advertising BBB investigates thousands of ads for possible violations of truth and accuracy The advertising selfregulatory council ASRC Promote and enforce standards of truth accuracy taste morality and social responsibility in advertising NAD monitors advertising practices and reviews complaints NARB appeals board for NAD Regulation by the media TV 0 Conduct strictest review 0 department at a TV network that reviews all programs and commercials to be broadcasted to see that they meet all acceptable standards 0 Network policies vary so much that it is impossible to make a universally acceptable commercial Radio 0 Every station has its own unwritten guidelines Magazines 0 Many magazines will not accept advertising for certain times of products 0 Some magazines test every product before publishing the ad Newspaper 0 Large newspapers have clearance staff and read every ad submitted 0 Codes not uniform Regulation by consumer groups Products perform as advertised and that product information be provided Consumerism social action designed to dramatize the rights of the buying public individual or group that actively works to protect consumer rights often by investigating advertising complaints received from the public and those that grow out of their own research When protests start the ads usually get pulled Self regulation by advertisers and ad agencies Advertisers also regulate themselves Ad agencies can be help legally liable for fraudulent or misleading advertising claims Most ad agencies have an in house legal counsel and regulatory submit their ads for review Government restraints on international advertisers Many campaigns use the same or similar themes across the globe Foreign government regulate much more than the US Many countries prohibit puffery The ethical and legal aspects of advertising in perspective Advertising offers considerable bene ts to marketers and consumers The industry should do all it can do to raise standards and try to get rid of what is misleading untasteful and irresponsible 97 of advertising reviewed by the FTC is found satisfactory ADVERTISING LECTURE 3 The advertising industry 0 Advertisers 0 Advertising agencies 0 Suppliers 0 Media Key players target audience 0 The desires audience for the advertising message 0 Datagathering technology improves accuracy of information about customers 0 Advertisers must recognize the various target audiences they are talking to and know as much about them as possible Advertisers 0 Uses advertising to send out messages Differences between local and national advertisers 0 National focuses on brand market share strategies markets hope to go into in the future longterm goals 510 million use many of specialists Centralized method have a consistent straight recognizable ads 0 Ef ciency 0 Con nu y Decentralized for each product brand there is a different person in charge so there are different ideas 0 Flexibility 0 Competition among company brands 0 Global advertising Standardized Ef ciencyrecognition 0 Local focuses on location volume tactics customers think on short term time frame lt1 million use of few generalists Based on diffrences in each country or culture Relevanceunderstanding Most companies blend strategies to t their unique situations Advertising Agency 0 An independednt organization of professionals who provide creative and business services to clients related to planning preparing and placing advertisments 0 Types of agencies Geographic scope Range services Specialized agencies o Grographic scope Local Regional Na onal International Range of servies 0 Full service General consumer Businesstobusiness o Specialized Creative boutiques Mediabuying services Interactive Markets What do advertisng agencies provide 0 Account services Research and account planning Creative production Media planning and buying Traf c management 0 Market services Why hire an agency 0 Use independent agency to objectivity experience talent contacts Agencymediacompany compensation o a payment that represents a percentage of clients total media spending Agency compensation plans 0 Commissions Around 15 o Markup changes Production cost xed percent Agencies add 1765 to the cost of outside services Agency compensation plans 0 Commissions Around 15 of airtime fees 0 Markup charges Product cost xed percent 0 Fee systems Hourly rates or by project 0 Incentive systems Tightlyspeci es objects 0 Some companies like Benetton prefer to create their ads using their own in house agency 0 Use an inhouse agency to Allow individuals to become expects on products being advertised Receive priority for client and clients needs Cost savings Control Getting clients 0 Refferals presentations networking advertsing Building the clientagency relationship 0 Cyclical 0000 The prerelationship stage The development stage The maintence stage The termination stage 0 Factors affecting the relationship Chemistry Conduct Communication Changes Suppliers 0 Assist advertisers agencies and the media in creating and placing the ads 0 Vendor services are often cheaper than those inhouse Lecture 4 O O O 0 0 O O Suppliers vendors Art studiosweb design houses Printers Production houses Research companies print electronic interactive media outof home direct mail other media Print newspapers national state local magazines geography and content yellow pages Electronic network independent and cable tv network and local radio Interactive media online services kiosks CDROM Home shopping broadcasts interactive programming internetviral Out of home outdoor billboards transit Direct mail brochures and catalogs Other media premiums point 0 purchase displays product placement event sponsorship Marketing and exchange The purpose of marketing is to create exchanges that satisy the perceived needs and wants of individuals and organizations Advertisings role in marketing plan Advertising is One of the several marketing communication techniques under the umbrella term quotpromotionquot Promotion is one of the four elements of the marketing mix which also includes product price and distribution Customer needs amp product utility Utility is the products ability to satisfy both functional needs and symbolic wants Perception is everything Two levels Product Needs wants Advertising gives perception of the product and its utilities Satisfaction the goal of the consumer Advertising reinforces Types of markets Market Where goods are sold and bought Particular type of buyer Key participants in the marketing process 0 Current customers 0 Prospective customers 0 Centers of in uence Market segmentation undifferentiated verses segmentation approaches 0 Market aggregation strategy Ignores differences One market strategy Think of some examples Targeting everyone is expensive wasteful and nearly impossible Easier to consider who your brand is and target them with speci cally designed MC messages Marketing segmentation 0 Identify groups Shared needs Shared characteristics 0 Aggregate into market segments 0 Sit down and select a target market Developing pro les through segmentation 0 Demographic segmentation Sex age ethnicity education occupation income and marital status Geodemographic segmentation o Psychographics Values attitudes personality and life style Developing pro les through segmentation 0 Demographic segmentation Sex age ethnicity education occupation income and marital status Geodemographic segmentation VALS classi cation system segments according to resources and decision making motivation Targeting process used to identify which segments MC messages should be designed to reach and to determine how much MC spending should be used to reach each segment Target market selection 0 Consumers within a target market should have similar product needs 0 Important differences between targets must be identi ed 0 Target must be large enough to be pro table 0 Must be able to target Brand touch points the marketing mix 0 Product concept Shaped the perceived bundle of values Product 0 Marketing begins with questions about the product from the consumers perspective 0 Managers must translate product characteristics into concrete attributes with demonstrable bene ts 0 Life cycle launchintro 0 Primary demand early adopters 0 Market expansion 0 Sales plateaumax pro t competition increases selective demand buy my brand Saturation market is full most people have the products so there39s better and cheaper competition Decline sales falling position ostdie of brand extension 0 Crest used to just be tooth paste Marketing concept marketing should focus on needs and wants of consumers rather than nding ways to sell products that may or may not be god for the customer Relationship marketing identi es customers I39m a Coca Cola person Brand differentiates a product from its competitors makes a promise to consumersserves as the driving unifying force directing all functional areas 0 Determining the desired brand position 0 Developing brand identi cation 0 Creating brand image Differentiation 0 Name 0 Own a word just do it 0 Bene ts 0 People who uses the product 0 People classify the product durable cheapest Positioning can be accomplishes using Attributes Price Ability to surpass competition Application Product user Product class Store brands a brand used exclusively by one chain of stores for a line of products made to a stores speci cation Brand identity name logo symbols design packaging image of associations held by consumers Packaging identi cation containment protection and conveniences consumer appeal and economy Brand equity 0 Audi is now making speed boats would you consider buying an Audi speed boat Dictated by supply and demand In uenced by production amp distribution costs if it has to be hand build you have to pay more Should convey value relative to other products Should meet a company39s objectives Want price to match with products positioning Psychological pricing Price lining 0 Old navy gap banana republic Must be consistent with brand image cant buy Rolex at Walmart Direct vs indirect distribution 0 Intensive sell everywhere low pro thigh volume M ampms 0 Selective limit number of sales outlets certain stores of approval Coach 0 Exclusive used to maintain prestige one or two guys you can buy from Airlines AutosBMW Company wants to control the price through its dealers also wants to build a reputable position in the market Marketing communications 0 Factors important for advertising success Strong primary demand Chance for product differentiation Hidden qualities of high qualities of high importance to consumers Opportunity to use strong emotional appeals Substantial sums available to support advertising 0 Advertising Reaches large audiences but has less ability to promt an immediate change 0 Personal selling Facetoface 0 Sales promotion Aims to generate immediate sales for a limited time buy this today get free shampoo 0 Public relations Enhance a company39s image through publicity news conferences sponsored events open houses donations 0 Direct marketing Telemarketing ect o Pointof salepackaging POS and packaging try to drive sales where the product is sold Communication Have a source and a encode it send out the message send it through the channel someone decodes it then receives the message In advertising Advertiser source Message ad channel medium Receiver consumer The commercial the persona tony the tiger momgt implied consumer kids gtsponsora consumergt actual consumer then results go back to the sponsor Consumer behavior 0 Goal of advertising is to persuade the consumer o This is complicated by several factors Internal and external in uences Every behavior pattern has exceptions Finding general patterns of behavior is dif cult Consumers are people who buy or use products to satisfy needs and wants Two types exist 0 Those who shop for and purchase the product 0 Those who use the product Target market 0 Those markets that will receive ads are the target audience 5 stages of decision making 0 Recognize pro blem 0 Search for information 0 Then evaluate alternatives 0 Chose product to buy 0 Evaluate the purchase Perception process which physical sensations are Selected organized and interpreted o Stimuli physical data 0 Process which people select organize and interpret information to form a meaningful pictu re of the world to People can form difrrent perceptions of the sme stimuli How to get attention rea throuh perceptual screens Attention o Perceptual screens Physiological screens Psychological screens Selective perception process of screening out information that doesn39t interest us and retaining information that does our need desires beliefs ect o Selective perce ption my ausive husand is actually good he just by Selective exposo re see king out messages that a re plea sa or pathetic with our as well as avoiding those are painful or threatening 0 Everyone has a new phone so you start seeing ads for phones o Selective distortion interpreting information in a that supports what you already believe twist it no one in family ot cancer form smoking Selective retention remembering the good pects of something you like and forgetting the bad aspects of something yo u dislike Consumer behavior consumer perception process Buy of advertising Bookended aids yad a yada yadai boiokfended ads Putting ads in unconditional places Awareness in terpreta don ads affect our sensory receptors gets our attention and then triger existing thoughts in our minds 39 Mental les only so much room 0 organized collection of 39 39eliefis feelings and exectati ons stored in memory limited capacity resistant to opening new les When you list off cereals captain crunch wants to be in your mental le Need to ow content of persons mental le Learning we cannot learn unless we have accurately perceived information and attached meaning to it Incidental learning 0 Unintentional acquisition of knowledge 39 petition Classical conditioning pavlovs dog pairing two dogs 0 U ncon ditioned stimulus The stimulus that elicits the desired response ha song 0 Conditioned stimulus i6 CDC360 A neural stimqu s old navy o Conditioned response eventually told navy hapy to Re peat the pairings o Decay association weakens if not reinforced Opera nt cond itiron i ng rewa rd ed and nished cognitive learning theory internal mental processes Strenthen behavior 0 Positive reinforcement Consumers are rewarded for behavior 0 Negative reinforcement Negative conseq uenrce ta kie something away Wea ken behavior 390 Punishment 0 No reinforcement 0 Negative consequences 0 No reward Problem solving consciousness o Hypothesis teSting automatic reSponse Learning and persuasion 0 Learning and persuasion closely linked o Lea rning permanent change in thought or behavior 0 Persuasion is when that change occurs as a result of promotional com mu nica ti on Personal importanceinterest 0 Low levels of involvement Peripheral cues music color or celebrities 39 Simple processing Attitudes are weak and be easily changed to High levels of involvement M essa ge arguments and product attributes Me39ssage integration with previous knowledge Strongly held attitude change Elaboration likelihood model ELM h ElanEra his mum quotquotF39f39 FTiaEu 39a imamIii Ell In Hi i With Attitudes o How you feel about a brand can be negative or positive Seen heard experiences and learned Direction and degree 0 Brand interest Openness or curiosity about a brand 0 Hopefully develop habit Acquired behavior pattern Safe simple and essential 0 Brand loyalty Repurchase of a brand continuously crest Break consumers current habits competitor39s product Acquire new habits advertiser39s product and are brand loyal Reinforce habits remind Consumer behavior results of learning 0 Attitudegtinterestgt habit gt loyalty Motivation and needs 0 An internal force that stimulates you to behave 0 Needs are one set of factors that in uence whether we are motivated 0 Each person has a unique set of needs some innate some acquired Maslow39s hierarchy of needs 0 SELF CTU LIZ TlGN Pursue inner Talent tireslivinr Ful llment SELFuEETEEM chievemenl MHSIEI Recognition Respect BELGNGINC i u LDVE Friends Family Simuse Lover S lFETY Security Sl biliw Freedom from Fear FHTSIDLDGICQL Foot Writer Shelter Warmth o I39ilil39iEl ll39Ell39jrilfjf HES n a lF39ll39 EIILIIIIEZ Mm manage Tires Ha guinea 1 quotHakeem9 ElnaI11 iLlJilJJEj39fE39 m 55mmng WEE Tim 39Enilm Elf The air tiara5w m39 it 0 Why did you go to college program cant go out of state everyone in your family went to state Why did you buy a new pair of shoes 0 Problem that advertisers face becomes evident they have to gure out what the majority of people want then sell them on that bene t Linkedln vs Facebook Linkedln esteem level Facebook social Interpersonal 0 Family 0 Reference groups people that you use as a guide friends family provide information means of comparison guidance Celebrity endorsements tap into consumer desires to want to be like members of a group Personal family impersonal politics 0 Opinion leader people we turn to for advice when making a decision Different opinion leaders depending upon the product category 0 Societal social class Determined by factors such as income wealth education occuanon Varies globally rigid India or brazil less rigid united states People in one class but different goods from different outlets and for different reasons than people in other classes Culture 0 Would not do kill somebody never do crack drive drunk 0 Tangible items art literature buildings 0 Intangible concepts history laws moralsde ne a group of people or a way of life 0 Norms boundaries of behavior established by culture 0 Subcultures Cajun music motorcycles Non personal in uences O 0 Environmental in uences decision making Time place environment The purchase decision and post purchase evaluation Decision making search for alternative 0 Internal search evoked set 0 External set Decision making search for alternatives develop important criteria of the decision Evaluate different choices on important criteria Chose evaluate decision Cognitive dissonance Justifying the discrepancy between what we actually received and what we thought we would Purchase decision and post purchase evaluation cognitive dissonance Was the money worth it Will it last as long as my old one Could I have found a better price 5 stages of decision making recognize a problem search for information evaluate alternatives chose a product to buy evaluate the purchase In order to sell a product you must make consumers think they want it Stage one physiological needs don39t have a lot of money attracted to things that don39t use a lot of money Survivor food and water rst needs


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