Mkt 417
Explain the effect that advertising has on brands, prices, competition, and primary and selective demand.
* Advertising is a small part of a product's cost. * Advertising enables mass-production, which lowers the cost per unit of products. * Regulated industries see no price increase associated with advertising. When deregulated, advertising often causes lower prices. * In retail, advertising contributes to both higher & lower prices. * By making a product better known, advertising can make the product more desirable. * Advertising can create associations that help consumers satisfy both wants & needs.
Describe an action that has been taken by a government agency to restrict the activities of advertisers.
* Freedom of Commercial Speech Commercial speech is protected. * The Tobacco Industry * Advertising to Children Advertising should not intentionally deceive children.
What are the three types of local advertising and what purposes do they serve?
* Product Advertising promotes and/or services * Sale Advertising retail advertising designed to stimulate the movement of merchandise or generate store traffic via special pricing * Classified Advertising recruit employees, offer services, sell and/or lease new and used merchandise
What are the six key components of the definition of advertising?
- Advertising is a type of communication - Advertising is typically directed to receivers - Advertising is paid for by sponsors - Advertising is mediated, which means it reaches through a channel of communication called a medium. - Most advertising is intended to be persuasive - Lastly, an ad identifies its sponsor.
Describe six common criticisms of advertising and discuss how you might refute them.
- Its deceptive: says one thing, but is really another. - Fluffing and Puffing: its overly exaggerated. - Subliminal: advertisements with other messages. - Values: advertising degrades people values by promoting a hedonistic way of life. - Environmental: There's too much of it. - Stereotypes: It's insensitive to minorities, women, immigrants and other groups.
What is a reference group and why is it important?
A reference group includes individuals or groups that influence our opinions, beliefs, attitudes and behaviors. (family)
What is demographic segmentation?
A way to define groups by their statistical characteristics (i.e. gender, age, ethnicity, education, occupation, income, etc.)
Advertising
A written or spoken media message designed to interest consumers in purchasing a product or service
How does the role of an account planner differ from that of an account executive?
Account planners study consumer needs and desires through a variety of methods. account executive is responsible for formulating advertising plans
Give an example of how ___ would be used in an ad strategy.
Ad showing someone applying lotion to hands for a hand cream ad.
What are three advantages and disadvantages of a large-scale market research campaign?
Advantages: Lots of data gathered, valuable for other firms, greater accuracy Disadvantages: Time, money, resources
What is the difference between an advertiser and an advertising agency?
Advertising agencies help companies create, plan and distribute their advertising campaigns. An agency can offer specialist knowledge in the areas of creative design, user experience, and digital marketing, with further specializations in different types of media.
What is the relationship of advertising and the marketing mix?
Advertising experts must understand how to blend all the tools into an integrated marketing communications program.
What uncovers the information needed for making advertising decisions?
Advertising research
What are the four categories of advertising research?
Advertising strategy research, creative concept research, pretesting of ads, post-testing of ads
What is a business-to-business (B2B) agency?
An agency that represents clients that sell to other businesses.
Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
What is the difference between the central route and peripheral route to persuasion?
As with learn- ing theory, the route to persuasion depends on a consumer's level of involvement with the product and message. When a consumer's level of involvement is higher, the central route to persuasion is more likely.
Why do we use perceptual screens to filter the ads to which we are exposed?
Before any data can be perceived, they must first penetrate a set of perceptual screens, the subconscious filters that shield us from unwanted messages.
What are the four types of segmentation?
Behaviorist, geographic, demographic, psychographic
Viewers are finding it convenient to watch what they want through cable cutting. What is cable cutting and give examples of services that consumers use after cable-cutting.
Cable cutting is the practice of choosing to discontinue cable service and watch programming on demand over Internet services (e.g. Netflix, Hulu, Amazon Prime, Sling)
What is the difference between the cognitive theory and the conditioning theory of learning?
Cognitive theory views learning as the rational application of knowledge to dealing with practical problems. conditioning theory—also called stimulus-response theory—treats learning as a trial-and-error process. Some stimulus (perhaps an ad) triggers the consumer's need or want, and this in turn creates the drive to respond.
What are the seven functions of advertising as a marketing tool?
Communicating Vital Information. ... Persuading Consumers to Buy. ... Creating a Brand. ... Creating Product Demand. ... Building a Customer Base. ... Differentiating Products From One Another. ... Previewing New Market Trends.
Why is consumer behavior the key to advertising strategies?
Companies use consumer behavior research to tailor ads specifically to their consumers
What are the benefits of a strong brand?
Competitive edge in market. ... Easy introduction of new products. ... Customer loyalty and shared values. ..
What is the mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy particular needs/wants?
Consumer behavior
Why do consumer sales play such an important role in local advertising?
Consumer sales are either made or lost locally. When making a sale and/or dealing with customers, local advertising is where relationships are made and developed.
Briefly explain the relationship between a country's GDP per capita and ad spending.
Countries with higher ad spending typically have higher GDP per capita due to a greater awareness of products available.
What is a culture? How does it differ from a subculture?
Culture refers to the whole set of meanings, beliefs, attitudes, and ways of doing things A subculture is a segment within a culture that shares a set of meanings, values, or activities that differ in certain re- spects from those of the overall culture.
What are the four types of local advertisers?
Dealers/local franchises of national companies, stores that sell a variety of branded merchandise, specialty businesses/services, and governmental/non- profit organizations
What is social responsibility? How can it affect companies' future business decisions?
Doing what society views as best for the welfare of people. Not paying attention to societal trends will result in a decline in the business.
GDP
Gross Domestic Product- the total market value of all final goods and services produced annually in an economy
How have accountability concerns affected agency compensation?
If a campaign is successful, the agency earns more; if it fails, the agency earns less due to the incentive system (sometimes called pay-for-performance)
Why do advertisers and ad agencies work so diligently to regulate their own activities?
In today's competitive marketplace, consumer confidence is essential, offensive or illegal advertising can affect that
In what ways does advertising facilitate exchanges?
Marketing creates exchanges to satisfy the perceived needs & wants of individuals & organizations.
Why is marketing research so important? How do companies use this research?
Marketing research helps identify consumer needs and market segments, provides the necessary information for developing new products/deciding new marketing strategies. Companies use this research to help market already existing products and to implement new products into the market.
What is the difference between positioning and market segmentation?
Positioning is associating a brand's features and benefits with a set of customers' needs while market segmentation is the strategy of identifying a specific group of people based on their needs.
What is the difference between primary and secondary data?
Primary data is a real-time data whereas secondary data is one which relates to the past.
Describe the difference between primary demand and selective demand.
Primary demand is demand for the entire product class. Selective demand is when someone only wants the price information of the brand
Which of these components do product placements not fulfill?
Product placements occur when a brand is featured for example in a show, in exchange for compensation. It is clear that an ad has a sponsor, and product placements are often made to look natural and unobtrusive, so the audience can not be sure if they are seeing a promotion.
What are the benefits of qualitative research?
Provides depth and detail an creates openness
An exaggerated, subjective claim that cannot be proven true or false is considered to be
Puffery
What is an example of an Internet-related privacy concern?
Search engines. Google, tech giant, the biggest and most used search engine collects a lot of information about its users. ... Identity theft. Millions of people were victims of identity theft which led to financial loss and even legal problems
What are the five basic steps in the research process?
Situation analysis and problem definition o Secondary research o Construction of research objectives o Primary research o Interpretation and reporting findings
What steps are in the human communication process?
Source o Encoding o Message o Channel o Decoding o Receiver
What would be an example of a target market for a BMW advertising campaign?
Successful black male, late 20's, median income $100,000, loves high end cars, wears a suit daily
Describe the three different markets: target, consumer, and business.
Target: aimed at a particular segment of the population o Consumer: marketed towards people who buy the product for their own or someone else's personal use o Business: reach people who buy goods and services for resale
What are the four identified periods in the history of Western civilization and what key developments characterized each period?
The Industrial age: It costed a consumer less to buy a product than to make it themselves, which fueled the growth of advertisement. The golden age: They used market segmentation to advertise to certain people during this age. The postindustrial age: They took advantage of people becoming more aware of the environment and advertised towards that group Global interactive age: The explosion of new technology in the last decade has affected advertising, so now it's more directed towards mass media.
What are the four distinct groups that characterize the advertising business and what do they do?
The advertisers (or clients): are companies—like Honda advertising agencies: consists of specialists who help advertisers plan, create, and prepare IMC campaigns. Advertisers are their clients. suppliers: includes the photographers, illustrators, printers the media: sells time (on radio and TV) and space (in print, outdoor) or both (digital media) for deliv- ering the advertiser's message to the target audience
What are the 4 P's of the marketing mix and under which does advertising fall?
The four Ps of Marketing (Product, Price, Place & Promotion) are also known as the 'Product Mix'. The product mix is a crucial tool in determining a product's offering to the customer.
What is word-of-mouth (WOM) advertising?
The passing of information/product recommendations.
What are some of the social needs that are served by advertising in the United States?
What are some of the social needs that are served by advertising in the United States? Advertising stimulates sales This encourages productivity Raises worker standards of living Matches the consumer with the product that best suits needs and aspirations
What is the ultimate goal of marketing?
What is the ultimate goal of marketing? The ultimate goal of marketing is to earn a profit for the firm by exchanging products or services with customers who need or want them.
brand loyalty
a customer's favorable attitude toward a specific brand
What do people in an ad agency do?
an agency also collaborates with the client's marketing staff to enhance advertising's impact through package design and other IMC channels.
Almost half of advertising dollars are spent on local advertising. Why is local advertising so important?
because most consumer sales are made (or lost) locally
Why do so many advertisers hire ad agencies?
because they help with the concept, design, and writing.
What are the various approaches that advertisers use to develop brand loyalty among consumers?
breaking habits, Acquiring habits, Reinforcing habits
Provide examples of actions that advertisers or their agencies might take that would demonstrate social responsibility and ethical behavior.
by forming local advertising clubs, the American Advertising Federation (AAF), the American Association of Advertising Agencies (AAAA), and the Ad Council.
secondary/selective demand
consumer demand for the particular advantages of one brand over another
primary demand
demand for a product category rather than for a specific brand
What is ethical advertising?
doing what the advertiser and the advertiser's peers believe is morally right in a given situation
Puffery
exaggerated or false praise
Why do companies pretest their advertising?
for communication gaps or flaws in message content before recommending
What beneficial roles does advertising play in a healthy economy?
helps create financially healthy consumers who are more informed, better educated, and more demanding
How does a product's stage in the product life cycle affect the way it's advertised?
influences the target market selected and the marketing mix used.
IMC
integrated marketing communications
What is IMC?
integrated marketing communications/The coordination and integration of brand managers.
What are the main type of advertising agencies?
local, regional, international
What characteristics are used in psychographic segmentation?
marketers group people by their values, attitudes, personality, and lifestyle
What is meant by noise and how might it affect an advertiser's efforts?
noise is not knowing if consumers have received the message due to competition with many other commercial messages, however feedback helps companies know how much or less effort they need to put
what are the most important things an advertiser should consider when selecting an agency
past work,chemistry, and communication?
Segmentation Strategies
segmenting a market by demographics, psychographics, geographics, behavior segmentation, and benefit segmentation
Communications Process
sender, encoding, message, media, decoding, receiver, response, feedback, noise
subliminal advertising
supposedly hidden messages in marketers' communications
What are some things that might be tested with creative concept research?
target audience's acceptance of different creative ideas at the concept
word of mouth
the influencing of people during conversations
What does the term consumer behavior refer to, and why is it important to advertisers?
the mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy particular needs and wants. (helps advertisers understand market)
Marketing Research
the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization
What additional challenged are faced by companies that advertise internationally?
they may have a cultural issue
What type of motive is related to being transformed in a sensory, intellectual, or social sense?
transformational motives
What are some of advertisements societal shortcomings?
truthfulness and ethics
What determines whether a multinational advertiser is a global marketer or not?
use a standardized approach to marketing and advertising in all countries (mcdonalds, coke)
What is the role of involvement in learning and persuasion?
when the involvement is low customer persuasion is easier
What guidance does marketing strategy give to advertising planning?
will help determine who the targets of advertising should be, in what markets the advertising should appear, and what goals the advertising should accomplish.
