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UA / Advertising / ADV 221 / university of alabama advertising

university of alabama advertising

university of alabama advertising


Test 1 Study Guide

what are the Principles of Free-Market Economics?

Chapter 1:  

Marketing Communications: Efforts and tools used to communicate with customers Examples:  

Integrated Marketing Communication: Coordination and integration of messages from a  variety of sources

Advertising: Structured and composed non-personal communication of information that  are paid for and persuasive in nature

- A type of marketing communication

- Intended to be persuasive

- Employs verbal and nonverbal elements

- Composed to fill specific space and time formats determined by sponsor - Directed at groups of people

Public Service Announcement: Advertisement that serves public interest, for a  nonprofit organization, carried by the media at no charge  

Medium: Communication vehicle that transfers a message from the sender to the  receiver  


The Role of Advertising in Business:

what are The Effects of Advertising?

4Ps (Marketing Mix)—product, placement, price, promotion 

The goal of advertising is to promote, to inform, persuade, and remind groups of  customers, or markets, about the need-satisfying value of the company’s goods  and services

Marketing Strategy:  

- Statement of how the company will accomplish its marketing objectives - Directs the company in formulating the marketing plan

- Determined by the blending of the marketing mix elements

Advertising Strategy:  

- Describes how to achieve the advertising objectives

- Sub strategies

Creative Strategy

Media Strategy

Principles of Free-Market Economics:  

- Self-interest  

- Complete Information

- Many buyers and sellers

- Absence of externalities

Externalities: Benefit or harm caused by the sale or consumption of  products to people who are not involved in the transaction and didn’t pay  for the product

What are the seven functions of advertising as a marketing tool?

Don't forget about the age old question of drake operates a trucking business, and one of his trucks was damaged in a traffic accident. the truck was purchased for $52,000 and the adjusted basis was $22,000 at the time of the accident. the truck was repaired at a cost of $5,000 and insurance reimb

Functions and Effects of Advertising in a Free Economy:

- To identify products and differentiate them from others

- To communicate information about the product, it’s features, and its place of  sale If you want to learn more check out what two conditions are necessary for molecules to be polar

- To induce consumers to try new products and to suggest reuse  

- To stimulate the distribution of a product

- To increase product use

- To build value, brand preference, and loyalty

- To lower the overall cost of sales

Evolution of Advertising:  

Preindustrial Age (? -1700s) – Invention of paper and printing press = newspaper Industrializing Age (1700s – 1918) – manufacturers major concern = production

Industrial Age (1900s – 1970s) – Branding; Product differentiation; USP; market  segmentation; broadcast media

Unique Selling Proposition (USP): The distinctive benefits that make a  product different than any other

Postindustrial Age (1980s – 2005) – People became aware of the sensitivity of the  environment; positioning & demarketing; rise of the Internet

Demarketing: Trying to get someone to use less of a product (no smoking  ads; texting and driving)  

Global Interactive Age (2005 – present) Different ways to approach audiences;  Interactive revolution Recession in 2008 = decline of old media

The Effects of Advertising:  

- Serves Social Media

Encourages increased productivity → Increased demand

Primary income for many media


- Issues of truthfulness and ethics led to:  

Government regulation

Industry efforts at self-regulation

Formulation of consumer rights

New consumer movement in the 1970s

- Shift in attention to more subtle problems


Advertising to children

Advertising of legal but unhealthful products

Advertising ethics

Chapter 1 Questions:  Don't forget about the age old question of conative message strategy

What are the six key components of the definition of advertising?  

Under what conditions might advertising not be paid for?

What is the ultimate goal of marketing?

What are the 4Ps of the marketing mix and under which does advertising fall?  What roles does advertising play in helping marketing meet its goals?  What are the seven functions of advertising as a marketing tool? If you want to learn more check out ucr arts
Don't forget about the age old question of mgt 3303 exam 1

What are the five identified periods in the history of Western civilization and what key  developments characterized each period?

What are some of the social needs that are served by advertising in the United States? What are some of advertising’s societal shortcomings?

Chapter 2:

Impact of Advertising on the Economy:

- Effect of Advertising on the Value of Products

By adding value to products, advertising contributes to self-interest, and  the number of sales, which increases competition, which also serves the  consumer’s self-interest

Added Value: The increase in worth of a product or service as a result of a  particular activity. In the context of advertising, the added value is  

provided by the communication of benefits over and above those offered  by the product itself  

- Effect of Advertising on Prices

By encouraging competition, advertising has the effect of keeping prices  down (serves consumer’s self-interest)

- Advertising is paid for by the consumer who buys the product  

- Advertising often enables manufacturers to engage in mass production,  which in turn lowers the unit cost of products

- In regulated industries, advertising has historically had no effect on  prices  Don't forget about the age old question of tegretik

- In retailing, price is prominent in many ads, so advertising tends to hold  prices down  

- Effect of Advertising on Competition

Intense competition tends to reduce the number of businesses in an  


Advertising by big companies often has only a limited effect on small  businesses 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 Businesses  

Primary Demand: Consumer demand for a whole product category

Selective Demand: Consumer demand for a particular brand

When business cycles are up, advertising contributes to the increase

When business cycles are down, advertising may act as a stabilizing force  by encouraging buyers to continue buying

-Social Impact of Advertising

- Encourages the development and speeds the acceptance of new products  and technologies

- Fosters employment  

- Gives consumers and business customers a wider variety of choices  - Keep prices down (by encouraging mass production)

- Stimulates healthy competition between producer (which benefits all  buyers)  

- Promotes a higher standard of living  

- Pays for most of our news media and subsidizes the arts  

- Supports freedom of the press  

- Provides a means to disseminate public information about important  health and social issues  

Ethical Advertising: Doing what the advertiser and the advertiser’s peers believe is  morally right in a given situation

Social Responsibility: Acting in accordance with what society views as best for the  welfare of people in general or for a specific community of people

Responsibilities of Advertising:

- Keep its property clean  

- Participate in civic events  

- Support local enterprises  

- Improve the community

Advertising’s Role:

- Influences a society’s stability and growth  

- Secures large armies

- Creates entertainment events, drawing fans

- Affects the outcome of political elections

Ethics of Advertising:


-Traditional customs and principles

- Attitudes, feelings, and beliefs that form a personal value system

- Singular ethical concepts  

Advertisements are reviewed and modified to create complete information and to  reduce unwanted externalities  

Regulatory Issues Affecting US Advertisers:

- Freedom of commercial speech

- Tobacco advertising

- Advertising to children  

- Consumer privacy

Guidelines for Advertising to children:  

Should not:  

- Be deceptive or unfair to the children

- Stimulate children’s unreasonable expectations about the product  - Directly advertise inappropriate content or products to children


- Avoid social stereotyping and prejudice

- Include minority groups in the ads

- Present positive role models  

- Capitalize on the potential to serve an educational role  

- Influence positive personal qualities in children

- Contribute to the parent-child relationship in a constructive manner  Government Agencies that Regulate Advertising:  

- Federal Trade Commission (FTC)

- Food and Drug Administration (FDA)

- Federal Communications Commission (FCC)

- Patent and Trademark Office and the Library of Congress

Nongovernment Regulation:  

Better Business Bureau (BBB)

Operates at the local level

Protects consumers against fraudulent and deceptive advertising and sales  practices

Maintains public records of violators  

Sends records of non-compliant violators to appropriate government  agencies

Advertising Self-Regulatory Council (ASRC)

Promotes and enforces standards of truth, taste, morality, and social  responsibility

Operating arms = National Advertising Division, National Advertising  Review Board

Reviews complaints from consumers, consumer groups, brand  

competitors, local BBBs, and trade associations

Regulation by the Media:


- Strictest of the media  

- Cable less strict that broadcast networks

- Broadcast standards department: Reviews all programs and commercials  to be broadcast to see that they meet all applicable standards  


- Unwritten guidelines  


- Older magazines can be stricter than newer media

- Magazines test products


- Not uniform

- Reject ads that look like regular content

Regulation by Consumer Groups:  

Consumerism: Social action designed to dramatize the rights of the buying public

Consumer Advocate: Individual or group that actively works to protect consumer  rights

Investigates advertising complaints received from the public and those that  grow out their own research

Self-Regulation by Advertisers and Ad Agencies

In house legal counsel that review advertisements

Associations that monitor Industry-wide advertising practices  

- American Association of Advertising Agencies (AAAA)

- American Advertising Federation (AAF)

- Association of National Advertisers (ANA)

Advertising Principles of American Business of the American Advertising Federation: - Truth

- Substantiation  

- Comparisons  

- Bait advertising  

- Guarantees and warranties

- Price claims  

- Testimonials  

- Taste and decency

Chapter 2 Questions

Why do you think countries with higher advertising spending per capita tend to have a  higher standard of living?  

Explain the effect that advertising has on brands, prices, competition, and primary and  selective demand.

What beneficial roles does advertising play in a healthy economy?

Describe six common criticisms of advertising and discuss how you might refute them.  

What is an example of an internet-related privacy concern?  

Describe an action that has been taken by a government agency to restrict the activities of  advertisers.

Why do advertisers and ad agencies work so diligently to regulate their own activities?

Chapter 3

Organizations in Advertising:

- Advertisers (clients)

- Advertising Agencies

- Suppliers

- Media

Local Advertising: Advertising by businesses within a city or county directed toward  customers within the same geographic area

Types of local advertisers:

- Car dealerships  

- Stores that sell a variety of branded merchandise

- Specialty businesses or services

- Governmental and nonprofit organizations

Advertising manager: performs all the administrative, planning, budgeting, and  coordinating functions


Product advertising

Sale advertising

Institutional advertising  

Classified advertising  

Local advertisers and IMC:

Integrated marketing communications: building and reinforcing mutually  profitable relationships with the stakeholders and general public

Develop and coordinate a strategic communications program via various  media

Social Media:  

Connect with a local community through social media can be very  effective

Most used: Facebook

Transnational Advertisers:  

Multinational Corporations: operate and invest throughout many countries and  make decisions based on availabilities worldwide

Global Marketers: Use a standardized approach to marketing and  

advertising in all countries

Localized approach:  

Adaptation of products, packages and advertising campaigns to suit each  market

Types of Agencies: Geographic Scope





Types of Agencies: Range of Services

Full Service advertising agency

General consumer agency

Business-to-business agency (B2B)

Types of Agencies: Specialized Services

Creative boutiques  

Media-buying service

Interactive agency

Tasks performed in an Agency:

Account Management

Research and account planning

Media planning and buying

Creative concepts

Advertising production

Traffic management

Additional services

Agency administration  

Compensations Received by Agencies:

Media commission: Paid by a medium to recognized advertising agencies for  advertising placed with it

Markup: Source of agency income gained by adding some amount to a supplier’s  bill


Fee-commission combination, Straight-fee method & incentive system Methods used to Gain Clients:



Networking and community relations

Soliciting and advertising for new business

Chapter 3 Questions

What are the four distinct groups the ad business has evolved into? What is the difference between an advertiser and an advertising agency?

Why is local advertising so important?

What are the three types of local advertising and what purposes do they serve?  What factors determine the type of organizational structure that advertisers use?

What additional challenges are faced by companies that advertise internationally? What determines whether a multinational advertiser is a global marketer or not? Why do so many advertisers hire ad agencies?

What are the main types of advertising agencies?

In what ways does the role of an account planner differ from that of an account  executive?

What do people in an ad agency do?

How have accountability concerns affected agency compensation?

What are the most important things an advertiser should consider when selecting  an agency?

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