Advertising Flashcards
The more likely you are to send a message the more likely it is to do what?
Make an impression
Resource constraints make it necessary to send the message ________ and ________.
efficiently; effectively
Describe efficiently delivering of a message.
Efficient entails minimizing the extent to which the message is delivered to people who are uninterested in your product (cf. benefit segmentation).
Managers make the trade-off between reach and frequency on the basis of what 3 areas?
- the goal of the advertising, educate, inform,
- the characteristics of the message, and
- the constrains imposed by the environment.
Describe reach when it comes to messaging.
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.
Describe frequency when it comes to advertising.
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.
What distracts a customer?
Noise
Several factors (3) conspire to reduce the effectiveness of any single ad, including:
- Number of Ads
- Low Consumer Involvement
- Confusion and Market-Leader Attributions Ex. Energizer/Duracell
What five tactics due firms use to combat advertising noise?
- Huge Budgets Ex.Coke
- Creative Execution Ex. Pillsbury (doughboy); Tums; Aflack! Geico;
- Scheduling & Placement - scream intermittently Ex. wave advertising. Reese’s - ET
- Clear & Consistent Positioning/Message Ex. Baby always in Michelin ads
- Price Promotion
How can price promotion be counterproductive in the long term?
- 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.
What are the two unknowns when it comes to the online environment?
- Ad effectiveness
2. Ad Relevance
Why is there a basic tension that exists between firms and advertising agencies regarding the results of advertising?
- The difficulty of measuring the impact of advertising 2. Disagreements regarding the appropriate time frame for assessing impact.
What are the six stages in sequential order that a consumer experiences on the way toward purchase?
Awareness -> Knowledge -> Liking -> Preference -> Purchase -> Brand Switching/Repeat Purchase
(each can be viewed as a different goal of advertising or impression)
What stage do advertising firms usually claim as their responsibility?
Awareness and Knowledge
What can resolve the dispute between clients and agencies?
Research
What are the two economic schools of advertising?
- Consumers are good learners (Advertising regulates itself)
- Consumers are poor learners
What four points support that Advertising = Information?
- Advertising informs consumers about product attributes but does not alter the way consumers value attributes.
- Greater knowledge allows easier perception of substitutes and thus leads to greater price sensitivity.
- Advertising enables all firms to communicate, thereby making entry easier.
- Greater competition leads to lower prices.
What four points support that Advertising = Market Power?
- Advertising affects preferences and tastes, and it (falsely?) differentiates products.
- Consumers become more brand loyal and less price sensitive because they perceive less substitutability across brands.
- Loyalty creates an entry barrier for new entrants.
- Less competition leads to higher prices.
Describe how consumers are good learners.
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.
What three types of attributes support the theory that consumers are good learners?
- Search Goods/Attributes: can read label and pricing Ex. price
- Experience Goods/Attributes: you find out for yourself Ex. taste
- Credence Goods/Attributes: you must rely on someone else/expert Ex. cavity prevention - dentist, pet food quality - vet
Describe how consumers are poor learners.
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.
What four types of attributes support the theory that consumers are poor learners?
- Insufficient exposure to evidence
- Biased encoding the evidence
- Inappropriate use of evidence
- Uses of “Signals” and Peripheral Cues
Describe a consumer’s insufficient exposure to evidence further.
Consumers are not exposed to all the information because they:
- Lack motivation or knowledge to search ex. OTC drugs
- Overestimate their knowledge ex. beer
- Overestimate the reliability of their experience ex. Arby’s chicken sandwich but roast beef is their focus
Describe a consumer’s bias encoding the evidence further.
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:
- lack of training
- credence attributes
- information complexity
