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Chapter 1 Notes

by: Kaylin Wallen

Chapter 1 Notes APR 221

Kaylin Wallen
GPA 3.2
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Prof. Michael Little
Intro to Advertising
Michael Little
Class Notes




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This 8 page Class Notes was uploaded by Kaylin Wallen on Thursday September 1, 2016. The Class Notes belongs to APR 221 at University of Alabama - Tuscaloosa taught by Michael Little in Fall 2016. Since its upload, it has received 158 views.


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Date Created: 09/01/16
What is Advertising? Marketing Communications: The various efforts and tools companies use to communicate with customers and prospects - Newspaper Ads - Event Sponsorship - Publicity - Telemarketing - Digital Ads - Coupons - TV Commercials Albert Lasker ( “father” of modern advertising) advertising= “salesmanship in print, driven by a reason why? Advertising: The structured and composed non personal communication of information, usually paid for and usually persuasive in nature, about products (goods, services, and ideas) by identified sponsors through various media - a type of communication - Intended to be persuasive - Identifies it’s sponsor - employs verbal and nonverbal elements - composed to fill specific space and time formats determined by the sponsor - typically directed to groups of people rather than to individuals Can be… Consumers: people who buy products and services for their own or someone else’s personal use OR business people who buy products for commercial or government use Advertising = a type of mass communication Public Service Announcements (PSAs): An advertisement serving the public interest, often for a nonprofit organization, carried by the media at no charge Goods: tangible products such as suits, soap and soft drinks Services: A bundle of benefits that may or may not by physical, that are temporary in nature, and that come from the completion of a task Ideas: Economic, political, religious, or social viewpoints that advertising may attempt to sell Product: The particular good or service a company sells Advertising reaches us through various medium: An instrument or communications vehicle that carries or helps transfer a message from sender to the receiver Radio advertising, television advertising, newspaper ads, Google ads, etc. Word-of-mouth (WOM) Advertising: The passing of information, especially product recommendations, in an informal, unpaid, person- to-person manner, rather than by advertising or other forms of traditional marketing (is a communication medium but not an advertising medium) Mass Media: Print or broadcast media that reach very large audiences.Mass media include radio, television, newspaper, magazines, and billboards addressable media- direct mail interactive media- the internet The Role of Advertising in Business Every business performs activities in: Operations (production/manufacturing) Finance/administration Marketing The only function whose primary role is to bring in revenue Marketing: An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Marketing is a process: A sequence of actions or methods aimed at satisfying consumer needs profitably These processes are 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 activities Goal of the marketing process: to earn a profit for the firm by consummating the exchange of products or services with those customers who need or want them Goal of advertising: to promote, to inform, persuade, and remind groups of customers, or markets, about the need-satisfying value of the company’s goods and services advertising helps the organization achieve its marketing goals Marketing strategy: The statement of how the company is going to accomplish its marketing objectives. The strategy is the total directional thrust of the company, that is, the how-to of the marketing plan, and is determined by the particular blend of the marketing mix elements, which the company can contr ol determine who the targets of advertising should be, in what markets the advertising should appear, and what goals the advertising should accomplish Advertising Strategy: The 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. Advertising strategy consists of two sub strategies: the creative strategy and the media strategy will refine the target audience and define what response the advertiser is seeking (what that audience should notice, think and feel Economics: The Growing Need For Advertising four fundamental assumptions of free market economics: 1. Self-interest people always want more for less; competition between self-interested sellers advertising to self-interested buyers leads to greater product availability at more competitive prices 2. Complete Information information about what products are available, at what quality and at what prices = greater competition and lower prices for all 3. Many buyers and sellers a wide range of sellers = if one company doesn’t meet customer needs, another can; a wide range of buyers = sellers can find interested customers 4. Absence of externalities (social costs) the government can tax or regulate a product if the sale or consumption may benefit or harm other people 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 Branding: a marketing function that identifies products and their source and differentiates them from all other products Basic functions of advertising: 1. to identify products and their source and to differentiate them from others 2. to communicate information about the product, its features, and its location of sale 3. to induce consumers to try new products and to suggest reuse 4. to increase product use 5. to stimulate the distribution of a product 6. to build value, brand preference, and loyalty 7. to lower the overall cost of sales The Evolution of Advertising as an Economic Tool Preindustrial Age: Period of time between the beginning of written history and roughly the start of the nineteenth century, during which the invention of paper and the printing press and increased literacy gave rise to the first forms of written advertising Industrializing Age: The period of time from the mid-1700s through the end of World War I when manufacturers were principally concerned with production Industrial Age: A historical period covering approximately the first 70 years of the twentieth century, This period was marked by tremendous growth and maturation of the US industrial base, It saw the development of new, often inexpensive brands of the luxury and convenience goods we now classify as consumer packaged goods focused change from a production orientation to a sales orientation Consumer package goods: Everyday-use consumer products packaged by manufacturers and sold through retail outlets. Generally these are goods such as food and beverages, health and beauty care, cleaning products, and detergents that get used up and have to be replaced frequently October 29, 1929- stock market crashed Daniel Starch, AC Nielson and George Gallup started research groups to study consumer attitudes and preferences by providing information on public opinion, the performance of ad messages, and sales of advertised products, companies started a whole new business: the marketing research industry Product Differentiation: Manufacturers portraying their brands as different from and better than similar competitive products through advertising, packaging, or physical product differences After World War II, TV advertising grew rapidly late 1940s-early 1950s- consumers tried to climb the social ladder by buying more and more modern products = Advertising Golden Era ads focused on product features that implied social acceptance, style, luxury and success Unique Selling Proposition (USP): The distinctive benefits that make a product different than any other. The reason marketers believe consumers will buy a product even though it may seem no different from many others just like it Rosser Reeves introduced that every ad must point this out so many companies started doing this that it became difficult to see what was unique anymore new strategy: Market Segmentation: Strategy of identifying groups of people or organizations with certain shared needs and characteristics within the broad markets for consumer or business products and aggregating these groups into larger market segments according to their mutual interest in the product’s utility unique groups of people whose needs could be addressed through specialized products increased competition and eventually needed a new strategy: Positioning: The association of a brand’s features and benefits with a particular set of customer needs, clearly differentiating it from the competition in the mind of the customer Postindustrial Age: Period of cataclysmic change, starting in about 1980, when people first became truly aware of the sensitivity of the environment in which we live Demarketing: Term coined during the energy shortage of the 1970s and 1980s when advertising was used to slow the demand for products Economic factors that characterized marketing during the recession: 1. the aging of traditional products, with a corresponding growth in competition 2. the growing affluence and sophistication of the consuming public, led by the baby boomer generation Sales Promotion: A direct inducement offering extra incentives all along the marketing route—from manufacturers through distribution channels to customers—to accelerate the movement of the product from the producer to the consumer coupons, direct mail, and direct marketing Narrowcasting: Delivering programming to a specific group defined by demographics and/or program content, rather than mass appeal. Usually used to describe cable networks. The opposite of broadcasting Digital Video Recorders (DVR): A device (such as TiVo) that is similar to a VCR, but records programs on a hard drive in digital format, providing high-quality image and sound and the ability to “pause live TV"  


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