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Principles of Advertising Chapter 1-4 Notes

by: aliciamariebr

Principles of Advertising Chapter 1-4 Notes ADV 3310

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Cover all technical terms and meetings that are on the first exam along with some examples from in-class lecture
Principles of Advertisinbg
Dr. Farnall
Class Notes
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This 20 page Class Notes was uploaded by aliciamariebr on Monday September 26, 2016. The Class Notes belongs to ADV 3310 at Texas Tech University taught by Dr. Farnall in Fall 2016. Since its upload, it has received 5 views. For similar materials see Principles of Advertisinbg in Advertising at Texas Tech University.


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Date Created: 09/26/16
Chapter 1: The Evolution of Advertising 09/26/2016 ▯ Integrated Marketing Communication  “Speak with one voice”  No matter what the contact point between brand and consumer/supplier the message of that brand should be the same  ex: snuggles fabric softener—box is always pastel/soft colored, font is bubble letters ▯ ▯ Advertising  a paid, sponsored message delivered through mass media with an intent to persuade  directed to targeted groups  one type of marketing communication  promotes goods, services, and ideas  Medium: communication vehicle that transfers a message from the sender to the receiver o word-of-mouth (WOM) advertising: passing of information in an informal, unpaid, person-to-person manner o mass media: print or broadcast media that reach very lard audiences (radio, tv, newspaper, billboards) o non traditional media: bathroom advertising ▯ ▯ Activities of a Business Organization  operations  finance/administration  marketing ▯ ▯ Functions and Effects of Advertising in a Free Economy  identify products and differentiate them from others  communicate info about the products, its features and its place of sales  induce consumers to try new products and to suggest reuse  stimulate the distribution of a product  increase product use  build value, brand preference and loyalty  lower the overall cost of sales ▯ ▯ Preindustrial Age  period between the beginning of written history and the nineteenth century  invention of paper and printing press gave rise to written advertising o 1275- first European paper o 1440s- printing press o 1472- first English advertisement o 1700s- spread of newspapers o 1729- illustration in ads were used ▯ ▯ Industrializing Age  Period from mid01700s through end of WWI when production was the major concern of manufacturers ▯ ▯ Industrial Age  Period covering approx. the first 70 years of the twentieth century  marked by: o growth of the US industrial base o development of new brands of consumer packaged goods  product differentiation: portraying one brand as different and better than similar competitive products o through advertising, packaging, or physical product differences  unique selling proposition (USP): distinctive benefits that make a product different than any other  market segmentation: identifying groups of people or organizations with shared needs and characteristics o aggregating the groups into larger market segments according to their mutual interest in the product’s utility ▯ ▯ Postindustrial Age  period of cataclysmic change, from 1980, when people became aware of the sensitivity of the environment o positioning: association of a brand’s features and benefits with a particular set of customer needs, differentiation it from the competition o demarketing: coined during the energy shortage in the 1980s when advertising was used to slow the demand from the products ▯ ▯ Global Interactive Age Now  growth of media delivery systems o narrowcasting: delivering programming to a specific group defines by demographics and/or program content (used to describe cable networks)  introduction of digital video recorders (DVRs) allowed viewers to skip through commercials  digital technologies have a huge impact on advertising  interactive revolution: evolution advertisement into a two-way medium  recession of 2008-2010 led to: o decline in advertising expenditures o adverse effects on the newspaper industry ▯ ▯ ▯ Chapter 2: The Environment of Advertising 09/26/2016 ▯ Learning Objectives:  understand the social criticisms of advertising  explain the difference between social responsibility and ethics  advertising regulation ▯ ▯ Issues in Advertising  Highly visible activity—companies risk public criticism if: o an advertisement is offensive o products don’t measure up to advertised promises  influence on the economy  societal effects ▯ ▯ Social Impact of Advertising—the good  encourage development and speeds the acceptance of new products and technologies  fosters employment  consumers have a wider variety of choices  helps keeps prices down through mass production of goods  promotes healthy competition  can improve standard of living  enables freedom of press ▯ ▯ Social Impacts of Advertising—the bad  deception in advertising o puffery: exaggerated, subjective claims that cannot be proven true or false  subliminal advertising myth o subliminal advertising: advertisements with messages embedded in illustrations below the threshold of perception  advertising and our value system o advertising promotes a materialistic way of life  proliferation of advertising o too much exposure to advertisements in all media  ex: Xmas Southern Living magazine—too much advertising  stereotypes o insensitivity to minorities, women, immigrants, persons with disability, elderly, and other groups  offensive advertising o advertising that is offensive to certain individuals o offended consumers can boycott a product o marketplace veto power—campaign will falter if the ads do not pull in audiences ▯ ▯ Social Responsibility and Advertising Ethics  ethical advertising o doing what the advertiser and the advertiser’s peers believe is right in a given situation  social responsibility o doing what society views as best for the welfare of the people or specific community ▯ ▯ Advertising Social Responsibility  advertising’s role o influence a society’s stability and growth o secure large armies o creates entertainment events, drawing fans  need to maintain ethical standards o buy, create, produce, and sell advertising to contribute to the society and economic system ▯ ▯ Ethics of Advertising  components o traditional customs and principles o attitudes, feelings and beliefs ▯ ▯ Regulatory Issues Affecting US Advertisers  freedom of commercial speech  tobacco advertising o settlement of 1998  imposed limits on brand-name promotion at events with young attendees  banned the use of cartoon characters  created a fund to be used by the various signatory states  advertising to children o should not be intentionally deceptive o Establishment of Children’s Advertising Review Unit (ECARU)  consumer privacy ▯ ▯ Establishment of Children’s Advertising Review Unit  advertisers have: o special responsibilities when advertising to or collecting data from children online  advertising should not: o be deceptive or unfair to children o stimulate children’s unreasonable expectations about the products  should: o avoid stereotyping and prejudice o include minorities o positive role models ▯ ▯ Federal Regulation Agencies of the Advertising Industry  federal trade commission (FTC)  food and drug ad (FDA)  federal communications commission (FCC)  patent and trademark office  library of congress ▯ ▯ FTC  eliminates acts of: o deceptive advertising—misrepresentation, omission, or other practice that can mislead consumers to their detriment o unfair advertising—causes a consumer to be unjustifiably injured or violates public policy o comparative advertising—claims superiority to competitors in some aspect ▯ ▯ evidence gather while investigating suspected violations  substantiation  endorsements  testimonials  affirmative disclosure ▯ ▯ remedies for unfair of deceptive advertising  consent decree  cease and desist order  corrective advertising ▯ ▯ FDA  safety of food, cosmetics and medicine and therapeutic devices  nutritional labeling and education act o sets legal definitions for terms like fresh, light, low fat and reduced calories ▯ ▯ FCC  has jurisdiction over radio, television, telephone, satellite, cable TV industries and the internet  restricts the products advertised and the content of ads ▯ ▯ Patent and Trademark Office and the Library of Congress  intellectual property: intellectual works legally protected by copyright, patent or trademark o patent—confers upon the creator of an invention the sole right to make, use and sell that product ▯ ▯ state and local regulation of the advertising industry  all states have facets of the FTC act o state legislation for advertising is based on the truth in advertising statutes o states work together to investigate and prosecute violations o localities have consumer protection agencies ▯ ▯ non government regulation  better business bureau (BBB) o operates at the local level o protects consumers against fraudulent and deceptive advertising  advertising self-regulatory council (ASRC) o promotes and enforces standards of truth ▯ ▯ regulation by the media  TV  radio  magazines  newspapers ▯ ▯ regulation by consumer groups  consumerism  consumer advocates ▯ ▯ self regulation by advertisers and ad agencies  in house counsel that review advertisements ▯ ▯ international advertising regulation  foreign gov regulate diff that the US ▯ ▯ ▯ Chapter 3: The Business of Advertising 09/26/2016 ▯ Organization in Advertising  Advertisers—companies that sponsor advertising for themselves and their products  advertising agencies—develop and prepare advertising plans, advertisements and other promotional tools for advertisers  suppliers—assist advertisers and agencies in the preparation of advertising materials  media—communications vehicles paid to present an ad to their target audience ▯ ▯ Local Advertising  advertising by businesses that is directed towards costumers in a specific city  types o dealers/franchisees of national companies o retail o specialty business and services o governmental and nonprofit organizations  advertising manager: performs all the administrative, planning, budgeting, and coordinating functions  product advertising—promotes goods and services  sale advertising—stimulates movement of a particular merchandise or increases store traffic by emphasizing price reduction  institutional advertising—gain attention for the business as a whole and intends the effects to be long term  classified advertising—used to locate and recruit new employees, offer services, or sell of lease new and used merchandise ▯ ▯ Cooperative (co-op) Advertising  sharing of advertising costs by the manufacturer and the distributor or retailer  manufacturer repays part of the dealer’s advertising costs based on sales  purposes o build the manufacturer’s brand image o help distributors, dealer or retailer increase sales  constraints o retailers should have very high sales to qualify for co-op funds o retailers and manufacturers have different objectives o manufacturers expect total control o retailers have their own ideas about which products to feature o both manufacturers and retailers feel that the other part has more control ▯ ▯ Regional and National Advertisers  regional—operate and market exclusively in one part of the country  national—advertise in several regions throughout the country o source: Agency Red Book ▯ ▯ Transnational Advertisers  multinational corporations—operate and invest throughout many countries and make decisions based on availabilities worldwide o 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 offering Specialized Services  creative boutiques—organizations of creative specialists working for advertisers and agencies to develop creative concepts, advertising messages, and specialized art o small groups hired because of their specializations  media buying services—specializes in purchasing and packaging radio and tv time  interactive agency—specializes in the creation of ads for a digital medium ▯ ▯ Tasks Performed in an Agency  Account management o account executive—person responsible that everything works the way it should  manages services for the client  represents agency’s point of view to the client o management (account) supervisors—supervise account executives and report to the agency’s director of account services  Research and account planning o researching the uses and advantages of the product, analyze current and potential customers and determine what will influence them to buy the product o account planning—bridges the gap between traditional research, account management, and creative direction  agency people represent the view of the consumer to define and plan the client’s advertising program  Media planning and buying o media planning—identification and selection of media vehicles for a client’s advertising messages o planning vs. buying skill sets  planning: putting together the puzzle  buying: negotiating the deal  Creative o copywriters—people who create the words and concepts for ads and commercial o layout and design  creative director—head of creative team od agency copywriters and artist  art directors—graphic designers and production arts, determine how verbal and visual symbols fit together  Advertising production o production department—responsible for managing the transformation of creative concepts into finished ads and collateral materials  traffic management o traffic department—coordinate all phases of production and ensure completion before the deadline  great way to “see the operation”  Additional services o sales promotion department  agency admin o small agencies o large agencies ▯ ▯ Two Structures: Medium and Large Agencies  departmental system—organization of an ad agency into department based on functions like: o account services o creative o marketing  group system—organization of an ad agency into a number of small groups ▯ ▯ Compensations Received  Media commission—compensation paid by a medium to recognized advertising agencies for advertising placed with it o traditionally 15%  markup—source of agency income gained by adding some amount to a supplier’s bill o traditionally 17.65%  fees o fee-commission combination—charge a monthly fee for agencies services and retain any media commissions earned o straight-fee method—compensation gained by a straight fee based on client-plus-fixed-fee formula o incentive system—agency shares in the client’s success when a campaign attains specific, agreed-upon goals ▯ ▯ In-House Agency  wholly owned by an advertiser and is set up and staffed to do al the work of independent full-service agency  benefits o cost-effective, greater control over advertising, and faster turnaround  limitations o less creative and risk of loss of objectivity ▯ ▯ Current Trend in Ad Industry  industry consolidation  decline of the commission system—advertisers are picking best commission instead of best advertisement  changes resulting from new media  economic downturn ▯ ▯ ▯ Chapter 4: Segmentation, Targeting, and the Marketing Mix 09/26/2016 ▯ Steps Involved in the Market Segmentation Process  Identifying groups with shared needs and characteristics  Aggregating/combining the groups into larger segments through a marketing mix ▯ ▯ Target Market and Target Audience  Target Market: Market segment or group within the market segment toward which all marketing activities will be directed  Target audience: specific group of individuals to whom the advertising message is directed ▯ ▯ Categories: Market segmentation  demographic: gender, family size, family life cycle, income, occupation, education, race, etc.  psychographic: societal divisions, lifestyle, personality, hobbies, self interest  geographic: region, county size, climate, city  behavioristic (usage): purchase occasion, benefits sought, user status, usage rate, loyalty status, readiness stage o how we use the product—heavy, light ▯ ▯ Behavioristic segmentation (usage)  segmenting consumers based on the benefits being sought o user status: measured by categorizing consumers based on the varying degree of loyalty to certain brands and products  sole  semisole  discount  aware nontriers  trial/rejectors  repertoire users  volume segmentation: defining consumers as light, medium, or heavy users of products  purchase occasion: segmenting markets on the basis of when consumers buy and use a good or service  benefits-sought variables o benefits: product attributes offered to customers, such as high quality, low price o benefit segmentation: segments consumers based on the benefits being sought ▯ ▯ Geographic segmentation  segmenting markets by geographic regions based on the shared characteristics, needs, or wants of people within a region ▯ ▯ Demographic segmentation  based on popular statistical characteristics with quantifiable factors  geodemographic segmentation: combining demographics with geographic segmentation to select target markets in advertising ▯ ▯ Psychographic segmentation  defining consumer markets based on psychological variables like values, personality, and lifestyle  psychographics: grouping of consumers into market segments on the basis of psychological makeup  Values and Lifestyles (VALS) groups consumers based on: o primary motivation: pattern of attitudes and activities that help people reinforce, sustain, or modify social and self-image o resources: range of psychological, physical, demographic, and material capacities that consumers can draw upon  resource axis—education, income, self-confidence, health, and eagerness to buy  innovators—high in resources, high innovation  survivors—surviving day to day  thinkers and believers—do the right thing because they believe in the things they’ve been taught  achiever and strivers—achieve based on what other people think  experiencers and makers ▯ ▯ Limitations of Consumer Segmentation Methods  Oversimplify consumer purchase behavior  Overly complicate the process of identification ▯ ▯ Segmenting Business and Government Markets  business markets o use professional buyers and systematic purchasing procedures o concentrated geographically o small number of buyers o purchase decisions depend on:  price and quality  product demonstrations  delivery time  terms of sale and dependability  business purchasing procedures o more rigid and complex than the consumer purchase process o buyers exhibit a willingness toward their favorite brands— advertising? o making a sale in business markets can take weeks to years  industrial classification system o North American Industry Classification System (NAICS) codes: classify all businesses based on broad industry groups, subgroups and detailed groups in smaller firms (2-6 numbers) o Market concentration—markets can be focused in specific regions or areas ▯ ▯ Products positioning and Differentiation  Positioning o how the product is perceived in the marketplace o goal: own a word that establishes the product in the prospect’s mind  Differentiation (POD) o creating a difference in the product that appeals to the market segment ▯ ▯ Branding  Identifying products and their source and differentiating them from all other products  Brand: combination of name, words, symbols or designs that distinguishing a product from competitors ▯ ▯ Types of brands  individual brands: different brand name for each product a company makes  family brands: group of products that can help each other under one umbrella name  national brand: product brands that are marketed in several regions of the country  private label: products resold to distributors or dealers to be sold as their own brands at lower prices ▯ ▯ Role of branding  offers recognition and identification of the product  adds value to the product  offers differentiation  builds brand loyalty and brand equity o brand equity: the value that the brand possesses ▯ ▯ Elements of the Marketing Mix  know those “adv and marketing mix elements) o price o distribution o promotion ▯ ▯ Factors important for advertising success  strong primary demand trend  differentiate product from others in the same category  look at and or understand things that are important to the consumer —segmentation  opportunity to use strong emotional appeals  substantial funds available to support advertising ▯ ▯ ▯


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