paper

Please follow the requirement and answer the questions. You should use insights of the powerpoint which I upload on the attachment.

The following ad campaign, for the website JobsInTown (a career search database), was launched as an outdoor marketing campaign. Please review the campaign at the following website (please review the ads, NOT the website the ads are on):

http://creativecriminals.com/print/jobsintown-de/life-s-too-short-for-the-wrong-job

Complete the assignment instructions below. When submitting this assignment, PLEASE COPY AND PASTE your write-up into the assignment box. DO NOT ATTACH YOUR ASSIGNMENT AS A WORD DOCUMENT.

Assignment Instructions:

Review the campaign and write a 3 page, double-spaced reflection (approximately 900 words). This write-up should feature insights about advertising we have covered in class (i.e. lectures, book, powerpoints). In your reflection, you should answer the following questions (Please list each question as a heading in your write-up, and answer it in complete sentence, paragraph format):

1. What is the campaign about? (Describe the campaign, its message, key elements, etc.)

2. What are the campaign objectives?

3. What is the campaign’s strategy? How would you describe it?

4. Who is this campaign for? Why?

5. Do you consider the campaign to be effective or ineffective? Why? (Use insights learned in this course)

Chapter 2
The Big Picture:
The Evolution of IMC

William F. Arens Michael F. Weigold Christian Arens

Assumptions of Free Market Economics
Self – Interest
Absence of Externalities
Complete Information
Many Buyers & Sellers

Functions & Effects of Advertising
Identify and differentiate products (branding)
Communicate product features and availability
Induce customers to try products and suggest reuse
Stimulate product distribution
Increase product use
Build value, brand preference, loyalty
Lower overall cost of sales

Benefits of Strong Brands

Premium pricing

Aid in dealing with crisis

Recruit top talent

Garner customer loyalty

Price war protection

Attractive to partners

Leverage for negotiating

Increases new product success

Evolution of Advertising
Preindustrial Industrializing Industrial Postindustrial
pre-1800 1800-1900 1900-1980 1980-present

Preindustrial Age of Advertising
During this era, few could read
Then. . .
Chinese invented paper
Gutenberg invented the printing press

Industrializing Age of Advertising
Producers needed mass consumption to match mass production
For the first time, it cost less to buy a product than to make it yourself
Transportation breakthroughs facilitated distribution
Increased need for mass marketing techniques

Industrial Age of Advertising
Fresh markets for new, inexpensive brands of luxury and convenience goods
Consumer packaged goods
Catalogs mailed to rural areas
Radio provides new medium
Advertising becomes a profession
“Lest you forget, we’ll say it yet..”
1st pre-packaged biscuit, eventually 1st million$ ad campaign

Golden Age of Advertising
Product differentiation
Market segmentation
Positioning
Age of Television
The Product Positioning Era
Post WWII – 1970

Retrospective on TV Commercials
1960s …
1980s

1990s and beyond

Back to Past
…to…Postmodern?

Advertising as a Social Force

Raises awareness of product availability

Imbues products with personality

Enables us to communicate about ourselves by the products we buy

Advertising Ethics and Effects
Ethical advertising can . . .
Foster free press and nonprofits
Foster understanding of social issues

Advertising Ethics and Effects
On the other hand, advertising can be dishonest and unethical
Puffery
Advertising to children
Advertising legal but unhealthful products

Effects of Unethical Advertising
Results in laws, regulations, and agencies
Pure Food and Drug Act
Federal Trade Commission Act
Better Business Bureau
Association of National Advertisers
American Advertising Federation

Chapter

The Scope of Advertising:
From Local to Global

William F. Arens Michael F. Weigold Christian Arens

Lecture Objectives

Describe stages in agency/client relationship

Define the main types of ad agencies

Discuss how agencies get clients, make money

Explain what people do in ad agencies

Describe factors that affect agency/client relationship

Describe what advertisers do and detail org structure

Identify the various groups in advertising and their relationships

Explain how the media and suppliers help

by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

The Advertising Industry: Organizations

Advertisers

Agencies

Media

Suppliers

The Advertising Industry: People

Sales personnel

Researchers

Accountants

Managers

Most often employed by agencies:

Computer scientists

Writers

Artists

Musicians

Photographers

Performers

Attorneys

Cinematographers

Advertisers: Local

Directed to customers in the same geographic area

Specialty businesses

Government and nonprofits

Franchisees and dealers

Sellers of branded merchandise

Advertisers: Local

Typical structure of small advertisers with high volumes of work

Regular price-line, sale, or clearance
Types of Local Advertising

Create favorable image, increase awareness, foster goodwill
Recruit employees, offer services, sell merchandise
Classified
Institutional
Product
Ads can be created locally using local experts or
ads can be created cooperatively

Advertisers: Cooperative
Vertical Co-op
Horizontal Co-op
Firms in the same business or part of town advertise jointly
National brand association
Manufacturer provides complete ad & shares costs
Professional quality ads
Expands advertising budget

Advertisers: Regional and National
Regional: one or several states
National: several regions
or entire country

Advertisers: Regional and National

Centralized Department Structure

Decentralized Department Structure

Transnational Advertising Structure
Divisions are responsible for their own product lines, marketing, and profits
Each division has an advertising department to coordinate sales and promotion across brands
The corporate advertising department provides information and guidance

Global Advertising Strategy
Assumption that product use and needs are universal
Standardized approach in all countries
Extensive research to ensure ad is basic and universal
Appeal to basic human emotions and interests

Media Around the World
McDonald’s honors an Islamic observance

Roles of Ad Agencies

Ad Agency

Independent

Business staff; creative staff

Contracts for media space and time

Client oriented

Understands global marketing

Agencies: Types
Specialty
Boutiques
Media Buyers
Interactive
Range of Services
Consumer
BTB
Reach
Local
National
Regional
Global
International

Agencies: People
Account Research and Planning
Traffic Management
Administration
Account Management
Other Services
Advertising Production
Media Planning and Buying
Creative Concepts

Ad Agency Structure

Agencies: Compensation
Ad rate
card
price:
$100,000
Agency
buys ad
at 15%
discount:
$85,000
Agency
bills client
full ad
amount:
$100,000
Agency keeps $15,000
difference
Media Commissions

Agencies: Compensation
Markups
Agency
buys
materials
for
campaign
Materials
cost
$85,000
Agency
bills for materials plus a
17.65%
markup
Agency bills $100,000
(cost plus markup)

Agencies: Compensation
Fees
Fee-commission combination
Straight-fee (retainer) method
Incentive system

Agencies: In-House
Pros
May save money
Allows tighter control
May allow greater
attention to the brand
Lower creative quality
Less experience
and talent
Loss of objectivity
Cons

Agencies: Client Relationships
Referrals
Presentations
Community relations
and networking
Solicitation
Finding and Attracting New Clients

Client-Agency Relationship Stages
Development
Pre-
relationship
Termination
Maintenance

Client/Agency Relationship Factors
Communication
Conduct
Chemistry
Changes
The Four Cs

Suppliers
Art studios and
web designers
Printers and
related specialists
Film and video
houses
Research
companies

Media
Out-of-home
Digital interactive
Electronic
Print
Direct mail
Other
Social

Chapter 6
Market Segmentation and the Marketing Mix: Determinants of Campaign Strategy

William F. Arens Michael F. Weigold Christian Arens

Overview

How marketers use behavioral characteristics to cluster perspective customers into market segments

Today’s Objectives
Define market segmentation and describe its purposes
Explain the target marketing process
Show how IMC is used with the product element in marketing
Review how IMC is used with the place element in marketing
Discuss how IMC is used with the communication element in marketing
Illustrate how IMC is used with the price element in marketing

The Advertising Dilemma
Advertising does not always lead to marketing success
Marketing success does not always come from advertising

The Market Segmentation Process
2. Aggregate these
groups into market
segments according
to their mutual interest
in the product’s utility
1. Identify people with
shared needs and
characteristics
Demographic
Behavioristic
Geographic
Psychographic
Shared Characteristics
Categories

Behavioristic Segmentation
Sole Users
Semi-Sole Users
Discount Users
Aware Non-triers
Trial/Rejectors
Repertoire Users
User-Status
Purchase-Occasion
Benefit
Segmentation
Benefits-Sought
Volume Segmentation
Usage-Rate

Behavioristic Segmentation

Geographic Segmentation
Sales are analyzed by:
Region
Country size
City size
Zip code
Types of stores

Demographic Segmentation

Psychographic Segmentation
Values
Attitudes
Personality
Lifestyles
Feelings

Market Segmentation
Adidas captures attitude and lifestyle

Psychographic Segmentation

Psychographic Segmentation
10 values shared by people around the world

Psychographic Segmentation

Business, Government, & Industry
Differences
from Consumer
Markets
Professional
buyers
Many purchase
decision factors
Categorized by
NAICS code
Small number
of buyers
Concentrated
geographically

Aggregating Market Segments

Select Groups Interested in Public Utility

Whole market

Specific market

Combine Groups to Build Target Market Segments

Homogeneous

Profit Potential

Defining the Target Market

The Target Marketing Process
2. Use the 4Ps of the marketing mix to shape a
product concept for the market
1. Select a target market from the market
segments identified
Product
Price
Place
Promotion

Target Market Segments
New Empty
Nest
Young
Influentials
Park Bench
Seniors
New
Beginnings
Home Sweet
Home
Movers &
Shakers
Bohemian
Mix

Product Life Cycles

The Product Element
Market
Tangibility
Consumption rate
Buying habits
Physical description
Classification
Own a word
Market segment appeal
Benefits offered
Positioning
Classification
Differentiation

The Product Element
Perceptible
Induced
Hidden
Differentiation

Differentiation

Product Branding

Individual
Family
National
Private
Licensed

Words
Product
Name
Design
Symbols

Goal is brand loyalty

The Most Valuable Brands

Product Packaging
Containment,
protection,
convenience
Identification
Economy
Consumer
appeal
These functions may become copy points

The Price Element
Demand
Production &
distribution costs
Competition
Corporate goals & strategies
Price Factors:
Variable influences

The Place (Distribution) Element
Intensive
Exclusive
Selective
Indirect
Direct
Network
Buyer Club
Vertical
Franchises

The Promotion Element
Collateral
Materials
Sales
Promotion
Product
Advertising
Communication
Mix
Personal
Selling
Public
Relations
Direct
Marketing

Chapter 1
Advertising and IMC Today

Today’s Objectives

Explain how the basic human communication process is useful in advertising communication

Define advertising and distinguish it from other forms of marketing communications

Explain the importance of relationship marketing

Define integrated market communications (IMC)

Today’s Objectives
Illustrate advertising’s role in marketing strategy
Identify important categories under promotion: the communication element of strategy
Define marketing and identify the 4 elements of marketing strategy

Integrated Marketing Communications
When a company coordinates and integrates messages
from a variety of sources about its products or brands, it practices integrated marketing communications (IMC).
IMC helps companies adopt a consumer-centric perspective in creating brand messages.
IMC helps companies to initiate, develop and nurture relationships with customers.

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Integrated marketing communications – or IMC for short – occurs when a company coordinates messages about its products or brands.
— So a magazine ad for a new food processor doesn’t stand on its own.
— Today it might be combined with TV commercials on daytime TV, a discount coupon sent in the mail, and an Instagram contest showing people using the product.
— These tools promote the product but are more than “advertising.” They are integrated methods to communicate product information to consumers.
IMC enables a company to adopt a more consumer-centric perspective when creating brand messages – and to develop relationships with customers.
— Advertising on its own cannot build relationships with customers.
— In today’s marketing environment, nothing is more important than understanding and effectively communicating with consumers.
4

What is Advertising?

Structured form of communication
Directed to groups
Paid for by sponsors
Usually persuasive
About products
Identified sponsors
Transmitted through
a communication medium
*Jef I. Richards and Catharine M. Curran, “Oracles on ‘Advertising’: Searching for a Definition,” Journal of Advertising 31 (2002), pp. 63–77.
“Advertising is a paid, mediated form of communication from an identifiable source, designed to persuade the received
to take some action, now or in the future.”*

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
5
We’re exposed to advertising every day. It’s inescapable in our society. But what is it?
First, it’s a form of communication – and one with a particular mission.
Advertising is intended to reach groups of people; it’s not targeted to one individual. The most common target audience is consumers.
Producing and distributing advertising costs money; these costs are paid for by sponsors.
Unlike many other forms of communication, advertising seeks to persuade the audience – perhaps to buy something or take some type of action.
Most advertising emphasizes products – which in this book covers goods, services, and ideas.
Sponsors are identified in ads. (Compare this with public relations activities in which the sponsor is usually not identified.)
Finally, advertising reaches its audience through a communication channel called a medium. The medium might be TV, radio, or direct mail. Technology has expanded the media options for advertising. Who can give me an example of a new advertising medium?

It’s all about the relationship
Relationship marketing – creating, maintaining, and enhancing long term relationships with stakeholders that result in exchanges of mutual value

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
6
-Over the years companies have shifted from simple transactional marketing to relationship marketing. They realize that customers, not products, are what helps a business succeed.
-Comparing the two approaches, we see that transactional marketing is somewhat limited. It focuses on:
— The product being sold
— Acquiring customers
— A single departmental focus
— And “talking” … one-directional communication
Relationship marketing takes a much broader perspective.
— It focuses not on product but on customers and partners or stakeholders.
— It seeks not just to acquire customers but to retain existing customers and grow the relationship.
— Multiple teams work together to achieve marketing goals.
— And finally, communication is two-dimensional: A company both talks to customers and listens to them.

Relationship Marketing

Goals

Manage customer/ company contacts

Maximize value of profitable customers

Use data to know customer

Importance of Relationships
Cost of lost customers
Lifetime Customer Value (LTCV)
Cost of acquiring new customers
Value of loyal
customers

3. Loyal customers offer added value. Repeat customers will support a company even in poor economic conditions. They are also less resistant to the marketing efforts of competitors (who, remember, are paying a lot of money to try and acquire those customers).
8

Relationship Levels
Partnership
Transactional
Reactive
Accountable
Proactive

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
As you know, people have different types of relationships in their lives. So do companies.
Transactional relationships are the most basic. A company sells a product to customers, but doesn’t follow up. Think of a grocery store.
In reactive relationships, the company sells the product and encourages customers to contact them if they have a problem. Where might this occur?
In accountable relationships, the company goes a step further by following up with a customer who makes a purchase. They might ask if the customer is satisfied or has any suggestions. See how this relationship becomes deeper? Where might this occur?
In proactive relationships, the company contacts customers with new information unrelated to the specific purchase. Does your cable company send you mailers offering upgrades for faster Internet service or another tier of TV channels?
A partnership is the deepest relationship. The company works with customers and stakeholders on an ongoing basis to discover ways to deliver better value. Does anyone have an example of this type of relationship?

Relationship vs. Relationship

IMC Tactics
Mass media
Less advertising in
mass media
Target messages
Heavier reliance on targeted
messages
Consumer data
Increased use of consumer data
Expectations
Changed expectations for
marketing communication
suppliers

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
14
In integrated marketing communications, companies coordinate and integrate messages about their products from a variety of sources.
IMC strives to reinforce core ideas about who a company is and the products it offers. Clearly, this will be more effective in building and managing relationships than transactional marketing.
Nowack and Phelps focus on four tactics used in IMC:
– Less emphasis on traditional advertising and more focus on other promotional activities
– More targeted promotional messages that reach smaller market segments Would you connect with a commercial that is aimed at senior citizens?
– So much of our world today is data-driven. To create and build relationships with customers, you must understand who they are. Data is a powerful tool.
– A shift in expectations from suppliers of marcom compared to the transactional model

Affects on Customer View
Product
view
IMC helps company manage customer perceptions

News

Word of mouth

Web

Expert opinion

Gossip

CEO personality

Financial report

4 Sources of Brand Messaging
1. Planned messages
(advertising, publicity releases) Low impact

2. Product messages
(product, price, packaging) Great impact

3. Service messages
(employee interactions) Positive or negative
4. Unplanned messages
(news stories, rumors,
competitors remarks, disasters) Company can influence

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
16
Everything a company does – or doesn’t do – sends a message to customers.
The 4 types of company/brand messages that customers receive are:
– Planned messages
> These are traditional promotional messages, such as advertising, sales promotion, and event sponsorships. They have low impact because customers see them as self-serving.
– Product messages
> These are inferred messages from the product, price, or distribution elements. These can have great impact. How does the classic Tiffany blue box send a message about the product inside?
– Service messages
> Interactions with company employees have greater impact than planned messages. Have you ever said “I’m never shopping at that store again” after a bad experience with a sales clerk?
– Unplanned messages
> Employee gossip, a bad story on an investigative news show, a product safety recall can all impact customer perceptions. Companies can’t control these messages, but public relations can influence the message and the customer response.

Dimensions of IMC
Planned messages
Unplanned messages
Product, service messages
The Integration Triangle

Constructive integration happens when a company does what it says it will do and others confirm this.
Can anyone give an example of this dynamic in action?

Say

Confirm

Human Communication Process
Source
Encoding
Message

Decoding
Receiver

Feedback

Channel
Noise

Interactive Communication Model

Encoder
Source
Decoder

Message

Decoder
Receiver
Encoder

Feedback

Stern Communication Model

Communication: Source Dimensions
Sponsor
Legally responsible
Has a message
Author
Copywriter, art director,
creative group
Invisible to audience
Persona
Within the text
Lends voice or tone to ad
Real or imaginary spokesperson

Communication: Message Dimensions
Autobiography
“I” tell a story about
myself to “you,” the
imaginary audience
Narrative
Third person persona tells a story about others to imagined audience
Drama
Characters act in front
of imagined empathetic audience

Receiver Dimensions
Implied consumers
Every ad or commercial assumes an audience of ideal consumers
Sponsorial consumers
Decision makers at the sponsor’s organization
They decide if the ad will run
Actual
consumers
People in the real world who comprise the target audience

Actual consumers don’t respond the same as implied consumers. Both the creative team and the sponsor must consider how actual consumers will decode an advertising message.
Can you think of an ad or campaign that perhaps seemed perfect when developed for implied consumers – but then backfired with actual consumers?

Let’s Evaluate some Ads

The Marketing Dimension
Business
Functional Divisions
Operations
Finance & Admin
Marketing
Defines advertising’s role in business
Only marketing has revenue generation as primary role

What is Marketing?
The process of planning and executing…
Concepts, pricing, distribution, and promotion of
Ideas, goods, and services
To create exchanges that…
Satisfy the perceived needs, wants,
and objectives of individuals and organizations

Advertising Classifications
Target Audience
Geographic Area
Medium
Purpose

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
28
Companies use many different types of advertising, depending on their marketing strategy.
Advertising can be classified in a variety of ways:
Target audience: The two types of target audiences or markets are consumers and businesses. Has anyone ever heard the term B2C or B2B marketing? What do these mean?
Geographic area: Advertising can be local, regional, or national – depending on the company’s goals and strategies.
Medium: Advertising can be presented via broadcast, print, out-of-home, direct mail, or interactive channels. Can anyone give an example of a specific ad on a specific medium?
Purpose: Not all advertising is focused on promoting products and services.
— Nonproduct (corporate or institutional) advertising promote a mission or philosophy rather than a specific product. Examples?
— Commercial advertising promotes products, services, or ideas with the expectation to make a profit.
— Noncommercial advertising is sponsored by or for a charitable or nonprofit institution, civic group, or religious or political organization.
— Action advertising attempts to stimulate immediate action by the recipient. Examples?
— Awareness advertising attempts to build the image of a product or familiarity with the product’s name and package. Examples?

Target Markets and Audiences
Consumer Markets
Retail & Public Service
Business/Industrial Markets
Trades, Professions, & Agriculture

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
29
Consumers are people who buy a product for their own or someone else’s personal use. Advertising aimed at consumer markets can be sponsored by retail stores and businesses – and it can also include public service announcements (PSAs) from nonprofit organizations.
Businesses buy goods and services for business – not personal – use. Business advertising uses a different approach than consumer advertising because the markets and their needs are different.
The three types of business advertising are:
— Trade advertising, which targets resellers (wholesalers, dealers, retailers) so a company can obtain a larger distribution of its products.
— Professional advertising, which aims to convince professionals to recommend or prescribe a product or service to their clients, use a product or service in their work, or use the product personally. Examples?
— Agricultural advertising, which promotes products and services to farmers and others in agribusiness.

Marketing: The 4 Ps
Product
Categories of
goods or services
Price
Strategies for
competitive pricing
Place
Distribution and
geography
Promotion
Communication
channels

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
30
Marketing strategy is a mix of the Four Ps: Product, Price, Place, and Promotion
Product is self-explanatory. Remember for our purposes we use this term to describes goods and services.
Price is important, because consumers view value as the ration of a brand’s quality to its price.
— In price advertising, an ad claims the product is equal in quality to higher priced brands.
— Image advertising creates a perception, but is rarely explicit about price.
— Sales advertising focuses on a recent drop in price.
Place links a company’s distribution and its advertising reach. A company like Pepsi will run national or international advertising, whereas a fast food chain located in the Northeast will only run regional advertising.
Promotion is the communication element of marketing. Let’s take a closer look at this…

Marketing Communications (Marcom)
Collateral
Materials
Sales
Promotion
Product
Advertising
Personal
Selling
Public
Relations
Types of
Marketing
Communication

Marketing: IMC
New media proliferation
More competition
Higher costs
Less-efficient advertising
Cynical, untrusting, sophisticated consumers
Gaps between promise & delivery
Need for more relationship building
Movement to establish consistency among agencies & departments

Marketing: IMC
Integrated Marketing
Collateral
Materials
Sales
Promotion
Product
Advertising
Personal
Selling
Public
Relations

Chapter 5
Marketing and Consumer Behavior:
The Foundations of Advertising

William F. Arens Michael F. Weigold Christian Arens

Discussion Overview

The relationship between marketing activities and consumer behavior

Discussion Objectives
Define marketing & relate consumer needs and product utility
Discuss interpersonal influences
on consumer behavior
Explain why consumer behavior is to IMC strategy
Describe motives behind consumer purchases
Identify key participants in the marketing process
Outline the psychological processes in human behavior
Explain nonpersonal influences on consumer behavior

Marketing Context of Advertising
Marketing
Conception
Pricing
Promotion
Distribution
Advertising

Customer Needs / Product

Utility

Need Satisfaction

Functional Needs

Psychological Wants

Utility

Goal of Marketing & Advertising
Perception
Exchange
Satisfaction

Marketing Participants: Customers

Total
Market

Centers of
influence
Prospective
customers
Current
customers

Market Types
Transnational or Global
Regional or National
Local
Business
Consumer
Government

Marketing Participants: Market
Markets
Customers
Marketers

Know the Consumer
Consumer behavior — the mental and emotional processes and the physical activities of people who purchase and use goods to satisfy needs and wants

Consumer Decision Process

Consumer Perception Process

Persuasion
Persuasion — change in belief, attitude, or behavioral intention is caused by promotion communication

Elaboration Likelihood Model

Results of Learning
Attitude
Habit
Interest
Loyalty

Consumer Motivation Process
Needs, basic & instinctive
Wants, learned during lifetime
Motivation: underlying forces driving decisions

Maslow’s Hierarchy of Needs

Consumer Motivation

Rossiter & Percy’s Fundamental Motives
Negative Motives: problem removal or avoidance
Positive Motives: benefit, bonus, or reward

Influences on Consumer Behavior
Interpersonal
Family
Society
Reference Groups
& Opinion Leaders

Influences on Behavior
U.S. Army ad focused on a Spanish- speaking audience

Influences on Consumer Behavior
Nonpersonal
Time
Place of Sale
Environment

Influences on Behavior
Red Cross ad focused on its presence during an earthquake disaster

Purchase Decision
Evoked Set:
Smart Phones
iPhone
Android
Blackberry
Evaluative Criteria

Features
Style
Cost
Service
Cognitive Dissonance
Was it worth the money?
Does the data plan work for me?
Could I have found a better price?

Chapter 3
The Big Picture: Economic and Regulatory Aspects

William F. Arens Michael F. Weigold Christian Arens

Today’s Objectives

Classify two types of social criticisms of advertising

Use economic model to discuss advertising effects on society

Explain social responsibility and ethics

Understand how governments regulate advertising

Discuss regulatory issues affecting advertising

Describe how federal agencies protect consumers, competitors

Define regulatory roles of state/local government

Discuss how other agencies fight fraudulent and deceptive ads

Basic Goals of Free Market
society is best served by empowering people to make their own decisions and act as free agents
Free Enterprise: “the most good for the most people.”

Effect on Product Value
Advertising gives products added value
Are advertised products necessarily better?

Prices

Consumer pays-ads small % of cost
Mass production lowers unit cost
Gov’t price control
Ads can support higher or lower prices

Competition

Can reduce businesses in industry
Inhibit new competitors
Regional and local competition can work

Economic Impact: Affected Areas

Consumer Choice
Encourages unique products, services
New, better brands dominate
Wider choices for consumers

Consumer Demand
Stimulates primary demand
Influences selective demand
Influences conquest sales

Economic Impact: Affected Areas

Business Cycles

Advertising contributes to the increase Advertising acts as a stabilizing force

Economic Impact: Affected Areas

Keeps consumers informed about alternatives (complete information)
Abundance Principle
In an economy that produces
more goods & services than
can be consumed, advertising:
Allows companies to compete more effectively (self-interest)

Advertising Stimulations
Advertising stimulates

Innovation
and new products
Competition (many buyers and sellers)
Better education consumers
Healthy economy

Social Impact: Criticisms
Short-term Manipulative Arguments
Deception
Unfair Practices
Puffery
False promises
Incomplete descriptions

False comparisons
Bait-and-switch
Visual distortions
False demonstrations
False testimonials
Partial disclosure
Small-print qualifications

Social Impact Criticisms
Promotes materialism
Incomplete information
External societal costs
Manipulation
Long-term Macro Arguments
Effects on Value System
17% of U.S. Consumers say Advertising is a source for purchase decisions

Proliferation of Advertising
Too much
Clutters the different mediums
Nuisance for customers
Lower effectiveness for advertisers
500-1,000 Ad messages /day

More Ads = Less Effective

Stereotyping

Stereotyping affects:
Minorities

Women
Immigrants
Disabled

Elderly
Others
Avoiding stereotypes =
embracing cultural diversity

Nudity
Language

Social Impact in Perspective
Negative
Incomplete information
Creates unwanted externalities (e.g. interferes with free press)
Biased
Positive
Contributes to growth and prosperity
Rich information source
Offers information not found in other sources

Social Responsibility and Ethics

Promote
well-being

Promote
harmony,
stability
Influence
elections
Draw
crowds to
events
Responsible
advertising
can…
Ethical =
morally right
Socially Responsible
= society views as best

Interrelated Components of Ethics
Traditional actions
of people in a society
or community
Philosophical rules
society sets to justify
past or future actions
Attitudes, feelings,
and beliefs of
personal value
system

Levels of Ethical Responsibility

How Government Regulates
State
Governor, attorney
general, various
departments
Municipal
Mayor, city manager,
police chief, courts,
city attorney
National
Legislative, executive,
judiciary

Pitfalls of International Regulation
Varies from country to country
Restrictions on what is said, shown, done
Bans on specific products
Time slot restrictions
Bans on coupons, premiums, tie-in offers
Prohibition of paid placements in shows
Arbitrary rulings
Pre-approval requirements

Current U.S. Regulatory Issues
Supreme Court: “speech” or “commercial speech”
Tobacco Controversy
Advertising to Children
Consumer Privacy

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
23
For businesspeople who believe that commercial speech should be afforded protection under the First Amendment, the tobacco case is ominous.
They warn that this selective limitation of freedom of commercial speech threatens every legal business in America, especially because any limitation on the freedom to advertise automatically gives a huge, monopolistic advantage to those big brands that are already the category leaders.
To promote responsible children’s advertising and to respond to public concerns, the Council of Better Business Bureaus established the Children’s Advertising Review Unit (CARU). CARU advises advertisers and agencies and also offers informational material for children, parents, and educators. The basic activity of CARU is the review and evaluation of child-directed advertising in all media

Speech: Central Hudson Test
Does the commercial speech at issue concern a lawful activity?
Will the restriction of commercial speech serve the asserted government interest substantially?
Does the regulation directly advance the government interest asserted?
Is the restriction no more than necessary to further the interest asserted?

Fair Information Practice (Internet)
FTC and Network Advertising Initiative
5 Principles
Notice: Privacy policy posted
Choice: Consumer control over information
Access: Consumers access/amend collected information
Security: Advertisers protect data
Enforcement: 3rd party monitoring.

FTC
Deceptive, unfair, comparative ads
FDA
FCC
Patent & Trademark Office
Library of Congress
Nutritional Labeling & Education Act (NLEA)
Broadcast media licensing
Intellectual property
Copyrights “works of authorship”

Federal Regulation: Trademarks
Coca-Cola’s trademark look is retained through use of similar letterforms and style, even with different alphabets

State & Local Regulation
Printer’s Ink guidelines: untrue, deceptive, misleading
National marketers comply with
states’ laws
Local government regulation:
city and county consumer protection agencies
“Little FTC” consumer protection acts

Nongovernment Regulation
Better Business Bureau (BBB)
National Advertising Review Council (NARC)
National Advertising Division (NAD)
National Advertising Review Board (NARB)
Regulation by the media
Regulation by consumer groups
Self-regulation by advertisers

Self-Regulation: Agencies & Associations
Advertising Agencies
Research and verify claims and
comparative data before use
Liable for misleading/fraudulent claims
May use in-house legal counsel
Industry-Wide
Associations
American Association of
Advertising Agencies (AAAA)
American Advertising Federation (AAF)
Assoc. of National Advertisers (ANA)

Self-Regulation: AAF Principles

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