Advertising

Question 1

The more likely you are to send a message the more likely it is to do what?

Answer 1

Make an impression

Question 2

Resource constraints make it necessary to send the message ________ and ________.

Answer 2

efficiently; effectively

Question 3

Describe efficiently delivering of a message.

Answer 3

Efficient entails minimizing the extent to which the message is delivered to people who are uninterested in your product (cf. benefit segmentation).

Question 4

Managers make the trade-off between reach and frequency on the basis of what 3 areas?

Answer 4

1. the goal of the advertising, educate, inform,
2. the characteristics of the message, and
3. the constrains imposed by the environment.

Question 5

Describe reach when it comes to messaging.

Answer 5

Reach is the percentage of the population that is exposed to the ad at least once. Because high reach uses up the budget and leaves less money to repeat the ad, a reach approach is advisable when the message is simple, the objectives involve mere awareness or reminding, and the environment is friendly.

Question 6

Describe frequency when it comes to advertising.

Answer 6

Frequency is the average number of times that an individual is exposed to the ad. High frequency (and therefore low reach) may be necessary when the message is complex, or the objective involves education or persuasion, and the environment is unfriendly.

Question 7

What distracts a customer?

Answer 7

Noise

Question 8

Several factors (3) conspire to reduce the effectiveness of any single ad, including:

Answer 8

1. Number of Ads
2. Low Consumer Involvement
3. Confusion and Market-Leader Attributions Ex. Energizer/Duracell

Question 9

What five tactics due firms use to combat advertising noise?

Answer 9

1. Huge Budgets Ex.Coke
2. Creative Execution Ex. Pillsbury (doughboy); Tums; Aflack! Geico;
3. Scheduling & Placement - scream intermittently Ex. wave advertising. Reese’s - ET
4. Clear & Consistent Positioning/Message Ex. Baby always in Michelin ads
5. Price Promotion

Question 10

How can price promotion be counterproductive in the long term?

Answer 10

• Dilute brand equity by focusing attention on price rather than quality, thereby reducing differentiation.
• Prompt price-based competitive reaction, resulting in lower margins but no advantage in market share.

Question 11

What are the two unknowns when it comes to the online environment?

Answer 11

1. Ad effectiveness

2. Ad Relevance

Question 12

Why is there a basic tension that exists between firms and advertising agencies regarding the results of advertising?

Answer 12

1. The difficulty of measuring the impact of advertising 2. Disagreements regarding the appropriate time frame for assessing impact.

Question 13

What are the six stages in sequential order that a consumer experiences on the way toward purchase?

Answer 13

Awareness -> Knowledge -> Liking -> Preference -> Purchase -> Brand Switching/Repeat Purchase
(each can be viewed as a different goal of advertising or impression)

Question 14

What stage do advertising firms usually claim as their responsibility?

Answer 14

Awareness and Knowledge

Question 15

What can resolve the dispute between clients and agencies?

Answer 15

Research

Question 16

What are the two economic schools of advertising?

Answer 16

1. Consumers are good learners (Advertising regulates itself)
2. Consumers are poor learners

Question 17

What four points support that Advertising = Information?

Answer 17

1. Advertising informs consumers about product attributes but does not alter the way consumers value attributes.
2. Greater knowledge allows easier perception of substitutes and thus leads to greater price sensitivity.
3. Advertising enables all firms to communicate, thereby making entry easier.
4. Greater competition leads to lower prices.

Question 18

What four points support that Advertising = Market Power?

Answer 18

1. Advertising affects preferences and tastes, and it (falsely?) differentiates products.
2. Consumers become more brand loyal and less price sensitive because they perceive less substitutability across brands.
3. Loyalty creates an entry barrier for new entrants.
4. Less competition leads to higher prices.

Question 19

Describe how consumers are good learners.

Answer 19

Markets are rational and that consumers can obtain full information about product attributes prior to making their decision.

Thus, advertising should have no effect on repeat purchase—and therefore the long-term dangers of deceptive advertising are quite minimal.

Question 20

What three types of attributes support the theory that consumers are good learners?

Answer 20

1. Search Goods/Attributes: can read label and pricing Ex. price
2. Experience Goods/Attributes: you find out for yourself Ex. taste
3. Credence Goods/Attributes: you must rely on someone else/expert Ex. cavity prevention - dentist, pet food quality - vet

Question 21

Describe how consumers are poor learners.

Answer 21

Consumers are highly imperfect learners, which provides firms with ample opportunity to influence consumer perceptions and beliefs. Proponents of this viewpoint to several deficits in human information processing that hinder the learning process—even in the context of search and experience attributes.

Question 22

What four types of attributes support the theory that 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

Describe a consumer’s insufficient exposure to evidence further.

Answer 23

Consumers are not exposed to all the information because they:

1. Lack motivation or knowledge to search ex. OTC drugs
2. Overestimate their knowledge ex. beer
3. Overestimate the reliability of their experience ex. Arby’s chicken sandwich but roast beef is their focus

Question 24

Describe a consumer’s bias encoding the evidence further.

Answer 24

Information is interpreted in a way that is consistent with prior beliefs, especially when the information is ambiguous. Advertising may help establish these prior beliefs. ex. beer (schlitz vs. molson); vodka; fish; fighter jets

Ambiguity itself can be caused by:

1. lack of training
2. credence attributes
3. information complexity

Question 25

Describe a consumer’s inappropriate use of evidence further.

Answer 25

Even when advertising information is encoded, it may not be interpreted properly. In these examples, the misinterpretation involves a failure of logic:
Ex. Folgers “mtn grown coffee” - staking claim; Transition lenses - block UV rays…just like everyone else

Question 26

Describe a consumer’s use of “signals” and peripheral cues further.

Answer 26

Consumers may take shortcuts when making judgments. These shortcuts may be based on signals conveyed through advertising.

1. Price – Consumer Reports
2. Warranty – Chrysler/Mitsubishi
3. Amount of Advertising – brokerage; insurance
4. Endorsers – doctors & detailers
5. Brand Name

Question 27

What are the two vulnerable populations when it comes to advertising? Ethically it is agreed upon not to advertise to them

Answer 27

Old people and children

Question 28

What is need creation?

Answer 28

The notion that advertising is so powerful that it can create needs that people don’t have. Ex. antibacterials or pickup trucks - manliness

Question 29

What two arguments support questioning that advertising creates needs?

Answer 29

1. People can have latent needs. In other words, the need exists and marketing merely raises it to a conscious level.
2. . If an advertisement plays to people’s concern for their appearance, self-esteem, popularity, or sexuality, the advertiser is again practicing good marketing. These needs are a part of the human condition. Marketing has identified them and is trying to address them. Marketing need not be limited to utilitarian needs