Advertising

Question 1

Advertising: efficiency vs effectiveness

Answer 1

Efficiency: minimize advertising to people that aren’t interested in the product.

Effectiveness: impact of communicating utility.

Question 2

Reach vs frequency

Answer 2

Reach: how many people hear your message.

Frequency: how often

Question 3

3 Basis for trading off reach & frequency

Answer 3

1) Advertising goal
2) characteristics of the message
3) constraints environment

Probably gonna do frequency.

Question 4

Advertising noise

Answer 4

Amount of advertisements a consumer is subjected to. Anything that distracts consumers from your ads.

Question 5

3 factors that reduce advertising effectiveness

Answer 5

1) Number of ads
2) Low consumer involvement
3) Confusion and market leader attributes

Question 6

5 tactics used to address noise

Answer 6

1) Huge budgets (scream)
2) Creative execution
3) Scheduling and placement
4) Clear & consistent message/positioning
5) Price Promotion

Question 7

2 consequences of price promotions in response to advertising gains not being captured soon enough.

Answer 7

1) reduce brand equity
2) invoke competitor price responses.

Question 8

2 unknowns of online ad environments

Answer 8

1) Ad effectiveness: which platform was ad encountered.

2) Ad relevance: word of mouth or online reviews is replacing the value of advertising.

Question 9

6 Stages towards purchase

Answer 9

1) Awareness
2) Knowledge
3) Liking
4) Preference
5) Purchase
6) Brand Switching or repeat purchase

Question 10

Advertising agency claims to be responsible for which Stages toward purchase:

Answer 10

1) Awareness
2) Knowledge

Question 11

Clients would like advertising agencies to be accountable for which Stages toward purchase:

Answer 11

5) Purchase
6) Repeat Purchase

Question 12

Potential problems at each stage when working with agency:

Answer 12

1) Awareness & Knowledge not met… Agency should be fired. This is the minimum.
2) Preference not met… product might suck.
3) Trial not met… might be price or place. This one is diagnosable.
4) Repeat not meet… problem is most likely the product.

Question 13

2 Economic schools of thought of advertising.

Answer 13

1) Advertising = information (optimistic view)
2) Advertising = market power (pessimistic view)

Question 14

4 beliefs ( advertising = information)

Answer 14

1) Informs consumers about product attributes, but does not alter consumers’ value of attributes.
2) Greater knowledge = easier substitutes. Greater price sensitivity.
3) Allows communication = reduces entry barriers.
4) Increase competition = lower prices.

Question 15

4 beliefs (advertising is power)

Answer 15

1) Affects preferences = falsely differentiating products.
2) Creates brand loyalty = less price sensitivity.
3) Loyalty = barrier to entry.
4) Less competition = higher prices.

Question 16

4 assumptions of the market if you believe advertising is “information”

Answer 16

1) Markets are rational
2) Consumers can obtain “full information” about products
3) Advertising does not affect repeat purchases.
4) Deceptive advertising is minimal in the long term.

Question 17

3 Evidences to support Advertising is information school of thought (Attributes). AKA: Consumers are good learners.

Answer 17

1) Search Attributes.
2) Experience Attributes.
3) Credence Attributes

Question 18

Search Attribute

Answer 18

Consumer can get all necessary info to make purchase decision about product by “searching”.

Question 19

Search Attribute

Answer 19

Consumer can get all necessary info to make purchase decision about product by “searching”.

Question 20

Experience Attribute

Answer 20

Consumer needs to experience the product to understand it. Cannot describe “taste”.

Question 21

Credence Attribute

Answer 21

Consumer needs an opinion or reference to make purchase decision. Doctor or dentist.

Question 22

4 evidences to support Advertising is power school of thought. AKA: Consumers are poor learners.

Answer 22

1) Insufficient exposure to evidence.
2) Biased encoding the evidence.
3) Inappropriate use of evidence.
4) Uses of signals and peripheral cues

Question 23

3 reasons for insufficient exposure to evidence. (Advertising = Power)

Answer 23

1) Consumer lacks motivation to search.
2) Consumer overestimate their knowledge.
3) Consumer overestimate reliability of their experience. (opinion on single experience)

Question 24

Biased encoding the evidence (Advertising = Power)

Answer 24

Consumers interpreting experience based on prior beliefs, especially when info is ambiguous.

Question 25

3 causes of ambiguity:

Answer 25

1) Lack of training
2) Credence attributes
3) Information complexity

Question 26

Inappropriate use of evidence (Advertising = Power).

Answer 26

Misinterpretation involving a failure of logic. The best coffee is mountain grown. Folgers is mountain grown….

Question 27

5 Uses of signals and peripheral cues (Advertising = Power)

Answer 27

1) Price - Consumer reports
2) Warranty - (Mitsubishi)
3) Amount of Advertising - (Brokerage)
4) Endorsers - (insurance/doctors)
5) Brand name

Question 28

2 Advertising Ethics

Answer 28

1) Vulnerable populations: (children, geezers, & not-savvy).
2) Need creation: (disease mongering, antibacterial, pickup truck).

Question 29

2 arguments against Need Creation being unethical

Answer 29

1) Latent needs. Company raises an existing need.
2) Non utilitarian needs are okay. People can be vain.