Chapter 1

Question 1

Advertising

Answer 1

Any form of paid communication by an identified sponsor aimed to inform
and/or persuade target audiences about an organization, product, service, or idea.

Question 2

The first type of advertising was

Answer 2

“outdoor advertising” done by traders and merchants

Question 3

Industrial Revolution between 1730 and 1830

Answer 3

boosted advertising practice

o Large-scale diffusion of division of labor

o Accelerated scale of production

o Markets transformed from being mainly local to regional and finally even
global

o Pivotal role of advertising as a necessary lubricant for economic traffic

Question 4

Advertising cannot be said to create consumer needs, but it is

Answer 4

capable of channeling
those needs by reshaping them into wants for specific products and services

Question 5

Brand

Answer 5

The label with which to designate an individual product and differentiate it from
competitors.

Question 6

Unique Selling Proposition (USP)

Answer 6

A summary statement used to meaningfully
differentiate the brand from the competition.

Question 7

Types of advertising media:

Answer 7

o Outdoor media (e.g. clay tablets, place cards, handbills and poster bills)

o Newspapers and magazines

o Television, radio, and the Internet

-Internet coexists next to more traditional mass media, rather than
eliminate them

Question 8

Consumer segments

Answer 8

Advertising aimed at a specific group of consumers that share
common interests, values, or lifestyles.

Question 9

Informational/argument-based appeal:

Answer 9

Ads that straightforwardly inform consumers
what is for sale, at what price, and where one can buy it.

o Popular from the 1800s to the early 20th century
o Hard-sell approach

Question 10

Emotional/affect-based appeal:

Answer 10

Ads that aim to influence the consumer’s feelings and
emotions rather than thoughts.

o Soft-sell approach

o Developed in the early 1900s

Question 11

The functions of advertising

Answer 11

 Commercial sponsorship
1. Facilitating competition among firms
o Competition for attention, preferences, and financial resources

2. Communication with consumers about products and services
3. Funding public mass media and other public resources
4. Creating jobs
5. Informing and persuading the individual consumer

o Informing → emphasis on creating or changing knowledge and beliefs

o Persuading → emphasis on generating or changing evaluative responses

Question 12

The information function varies with product category

Answer 12

o Informational appeals more frequently used for durable, rather than non-
durable goods

o Informational appeals more frequently used in developed, industrialized
cultures

o Information about performance, availability, components and attributes, price, quality, and special offers

Question 13

Product life cycle

Answer 13

An inverted U-shaped curve that is related to the diffusion or
spreading of a product across the marketplace from its initial introduction to its decline
and ultimate demise.

1. Introduction – informing consumers, creating brand awareness, induce
   product trial
2. Growth – building market share, vis-à-vis competition
3. Maturity – consolidating market share, creating consumer bran loyalty and
   maintaining top-of-mind awareness
4. Decline – informational appeals for new and additional uses for the product

Question 14

Two basic strategies for persuasion:

Answer 14

1. Alpha strategies/approach motivation: Directly increasing the attractiveness of
   the offer or the message
2. Omega strategies/avoidance motivation: Reducing consumer reluctance to
   accept the position.

Question 15

Alpha strategies/approach motivation:

Answer 15

Directly increasing the attractiveness of
the offer or the message

Question 16

Omega strategies/avoidance motivation:

Answer 16

Reducing consumer reluctance to
accept the position.

Question 17

The effects of advertising: a psychological perspective

Answer 17

• Naïve approach: Assumes that advertising must be effective, simply because it is so
  ubiquitous and advertising expenditures are vast and ever increasing.
• Economic approach: Tries to address the effects issue by correlating advertising
  expenditures with aggregated changes in sales volume.

-Media approach: Conceptualizes advertising effectiveness in term of the number of
individuals in a specific target population who have been exposed to a messages.
o An effective message is one where many consumers of the target segment
have been exposed, and relatively few consumers outside the target segment
o Cannot inform us on the impact of this exposure

-Creative approach: Assumes that a message is effective to the extent that it is well-
made and creative.
o Equating effectiveness with creativity

-Psychological approach: Aims at identifying effects of advertising at the individual
level. (- Relates specific advertising stimuli to specific and individual consumer
responses, - Intrapersonal, interpersonal, and group-level psychological processes, - Requires being as explicit as possible about the types of consumer responses,
the types of advertising stimuli affecting these responses, and the types of
postulated, causal relations between advertising stimuli and consumer
responses)

Question 18

Cognitive consumer responses

Answer 18

Beliefs and thoughts about brands, products, and
services that consumers generate in response to advertising.

Question 19

Affective responses

Answer 19

Various more or less transient emotions and moods that can
occur as a function of ad exposure and differ in valence (positive vs. negative) and
intensity (i.e. arousal).

Question 20

Behavioral responses

Answer 20

Intention and actual behavior in response to advertising

Question 21

Consumer responses

Answer 21

• Cognitive consumer responses: Beliefs and thoughts about brands, products, and
  services that consumers generate in response to advertising.
  o Attitudes
• Affective responses: Various more or less transient emotions and moods that can
  occur as a function of ad exposure and differ in valence (positive vs. negative) and
  intensity (i.e. arousal).

-Behavioral responses: Intention and actual behavior in response to advertising.

Question 22

Experiment:

Answer 22

Manipulating one or more antecedents, and subsequently assessing their
impact on the consequence.

• Suited to establish causality
• Random assignment assures equal influence of extraneous variables in the
  different conditions

Question 23

Mediation analysis:

Answer 23

Attempts to identify the intermediary psychological processes that
are responsible for the effect of an independent on the dependent variable.

1. Independent variable has an impact on the assumed mediator
2. Variation in the mediator significantly accounts for variation in the dependent
   variable
3. Controlling for the mediator significantly reduces or eliminates the impact of
   the independent variable on the dependent variable

Question 24

Factorial experiments

Answer 24

Experiments in which two or more variables are manipulated
within the same design.

Question 25

Moderator:

Answer 25

Individual differences or contextual variables that affect the strength or
even change the direction of the effect of the independent on the dependent variable.

• The effect of A on B is different for different levels of C

Question 26

Distinction between direct and indirect sources:

Answer 26

o Direct source – spokesperson delivering a message or demonstrating a product

o Indirect source – does not deliver the message, but is nevertheless associated
with the product or service (e.g. logo)

Question 27

Attractiveness frequently functions as

Answer 27

a “halo”; heuristic – what is beautiful is good

Question 28

Argument quality

Answer 28

What is communicated about the product and the strength or
persuasiveness of the argument.

• Based on perceptions of the valence of the argument as well as the likelihood
  of occurrence

Question 29

Message structure

Answer 29

How product information is communicated and the order of
presentation.

• First argument – increased consumer attention and processing intensity
• Last argument – most recently activated in memory

Question 30

Message sidedness

Answer 30

• One-sided messages contain only arguments supporting a conclusion favorable to the
  advertised brand
  o Effective but may result in resistance
  o More persuasive when recipients are favorably disposed to the message issue

-Two-sided advertisements include both positive and negative arguments
o More effective when the issue is unfamiliar to consumers, or when their initial
attitudes are unfavorable

Question 31

Fear-arousing communications

Answer 31

Scaring the consumer into action.

o Referring to risks that the consumer can prevent or reduce by buying the
product
o Types of risks: physical, social, product performance, financial, opportunity

Question 32

Promotional mix

Answer 32

It includes five types of marketing communications in addition to
advertising, namely direct marketing, interactive marketing, sales promotion, public
relations (PR) and personal selling.

Question 33

Integrated Marketing Communications (IMC)

Answer 33

IMC involves coordinating the elements
in the promotional mix to create synergy between them.

Question 34

Direct marketing

Answer 34

The firm communicates directly and individually with a potential
customer, with the objective of generating a behavioral response form them,
preferably in the form of a transaction

Question 35

Word-of-mouth (WOM) marketing

Answer 35

The influence agent is not a sales representative of
the company, but a committed user of the product.

Question 36

Event marketing

Answer 36

A sports event or cultural event is used as a vehicle to get in touch
with prospective customers, frequently through sponsorship of an existing event or the
creation of an entirely new one, closely associated with the sponsoring brand.

Question 37

Direct mail

Answer 37

A personalized form of advertising, where consumers are typically
addressed by their names.

Question 38

Interactive marketing

Answer 38

Using the potential of the Internet for marketing products and
services.
o The internet is synchronous
o Consumers have control of contact
o Control of content
o Perceived social presence (the extent of perceived “personalness”, warmth and
sensitivity) is lower on the Internet

Question 39

Sales promotion

Answer 39

Focused on generating an immediate behavioral response from the
consumer. It uses price cuts and other forms of temporary incentives to generate sales
on an ad hoc basis.
o Monetary incentives
o Additional incentives
o Product promotions

Question 40

Five basic functions of sales promotions:

Answer 40

1. Increase market size
2. Reward loyal customers
3. Make existing customers more loyal
4. Stimulate trial by new customers
5. Support other communication tools

Question 41

Sales promotion: Negative effects in the long run

Answer 41

o Ever-increasing promotion costs by competing firms
o Affecting the reference price consumers use to form their judgement
o Making the price the most salient product attribute in the perception of the
consumer

Question 42

Public relations

Answer 42

A communication instrument that is used to promote favorable
perceptions about the organization as a whole

Question 43

In the context of IMC, two types of PR practice may be especially relevant to consider:

Answer 43

o Financial PR, which is aimed at informing and persuading the financial
audiences that are essential for the long-term money-raising potential pf the company

o Marketing PR, which entails the promotion of new products and services
through free publicity

Question 44

Personal selling

Answer 44

A two-way, face-to-face form of communication to inform and
persuade prospective buyers with the aim of yielding a behavioral response from them,
either in the sense of an initial purchase of the product or service, or fostering repeat
purchases and thus creating customer loyalty.

Question 45

Advantages personal selling

Answer 45

o Higher overall impact on buyer, since a salesperson can carefully probe
symptoms of consumer resistance and try to break through
o Customer feedback can tailor the sales message to the specific needs and
wants
o Possibility of demonstrating the product and negotiating on the price, after-
sales service, warranties, etc.
o Efficient form of communication since there is no waste (you don’t reach
audience members outside the target group)

Question 46

Disadvantages personal selling

Answer 46

o Costs → limited reach and frequency
o Company’s lack of control over the content of its messages, because they are
tailored to the individual customer- Inconsistent messages and salesperson behavior can confuse customer

Question 47

Modelling approach

Answer 47

Focus on the aggregate level. Entire markets or market segments
are the primary unit of measurement

Question 48

Behavioral approach

Answer 48

Focus on individual consumer responses as a function of specific
advertising input variables.
o Level of specificity is high
o Experimental research methods

Question 49

Sales-response models

Answer 49

These models aim to relate advertising inputs, such as
expenditures, to aggregated output measures, such as sales, market share, or profits,
in an effort to gain insight in the aggregated advertising effects as a function of
aggregated advertising input.

Question 50

Concave sales response
(Sales-response models)

Answer 50

Sales follow the law of diminishing returns; the incremental impact of
advertising on sales diminishes with increasing the communication budget,
based on the notion that once the entire population of non-buyers has been
reached by an advertising campaign, additional ad expenditures will not add as
much in terms of impact

Question 51

S-shaped model
(Sales-response models)

Answer 51

o Assumes that initial impact of advertising as a function of communication
budget is low
o After the initial phase, sales will start to increase exponentially with increasing
expenditures, up to a certain saturation point where the impact of advertising
will level off
o After this, added investments may even lead to adverse results

Question 52

The aggregate level of analysis may obscure the confounding role of several factors:

Answer 52

o Advertising may not be the only causal factor affecting sales
o Response modelling is based on input-output representations without regard
for the underlying processes that are responsible for the occurrence of a
relationship (or lack thereof) between advertising input and sales output
o Sales output evidently is a behavioral measure; behavioral approach is needed
to complement the modelling approach

Question 53

Hierarchy-of-effects models

Answer 53

Consumer responses to advertising proceed through a
fixed set of three learning stages.

o Cognitive stage – consumers engage in directing conscious attention to the
target ad and thinking about its content
o Affective stage – thinking gives way to emotional responses and the formation
of attitudes or preferences associated with the advertised brand takes place
o Conative stage – behavior that might arise form exposure to advertising,
including (re)purchasing the advertised brand or (re)using it

Question 54

AIDA sequence

Answer 54

A hierarchy that proposes a straightforward linear sequence of effects.
Attention (cognitive), Interest, Desire (affective), and Action (behavioral).

o Several variations, in which stages have been added or deleted
o AIDCA (Attention, Interest, Desire, Conviction, Action)
o AIETA (Awareness, Interest, Evaluation, Trial, Adoption)
o Awareness, Knowledge, Liking, Preference, Conviction, Purchase

Weaknesses:
o Departure from a cognitive-affective-behavior sequence
o Fixed sequence of processes presupposes a relatively high level of consumer
involvement

Question 55

Foote, Cone-Belding (FCB) Grid

Answer 55

Proposes that advertising could be modelled along
two key variables: (1) the extent of thinking vs. feeling, and (2) the extent of consumer
involvement (low vs. high).
o Each quadrant has a different sequence including the components “think”,
“feel”, and “do” that is assumed to account for the consumer decision-making
process and the processing of advertisements about these products

Question 56

In the Rossiter, Percy, and Donovan planning grid, high and low involvement product
types are crossed with two classes of consumer motives, which ones?

Answer 56

o Positive and negative purchase motivations
o Positive motivations = transformational motivations (sensory gratification,
intellectual stimulation, social approval)
o Negative motivations = informational motives (problem removal, problem
avoidance, normal depletion)

Question 57

Both the FCB grid and the RPD grid..

Answer 57

disregard the possibility that the same product
may function in a different role for different individuals

In the Rossiter, Percy, and Donovan planning grid, high and low involvement product
types are crossed with two classes of consumer motives
o Positive and negative purchase motivations
o Positive motivations = transformational motivations (sensory gratification,
intellectual stimulation, social approval)
o Negative motivations = informational motives (problem removal, problem
avoidance, normal depletion)

Question 58

DAGMAR (Defining Advertising Goals for Measured Advertising Results):

Answer 58

Advertising
can yield nine different effects that are hierarchically ordered.

1. Category need
2. Brand awareness
3. Brand knowledge/comprehension
4. Brand attitude
5. Brand purchase intention
6. Purchase facilitation
7. Purchase
8. Satisfaction
9. Brand loyalty

o Compatible with the two essential functions of advertising: to inform and to
persuade
o No evidence that advertising affects the consumer in the proposed sequence

Question 59

Problems with Early models of individual responses to advertising: hierarchy-of-effects models

Answer 59

Problems:
o The models are only concerned with the effects of advertising as discrete
media messages, whereas in reality, effects often come about in interaction
with various other marketing factors
o Simplistic view of human behavior and response processes
o Inflexible models, since they assume that all ads have the same effects
o Lack of construct validity of models; the sequence isn’t necessarily exactly like
it is in realit

Question 60

Consumer behavior model

Answer 60

Buying behavior was conceptualized as the joint resultant
of individual differences and environmental influences affecting information processing
and decision-making.

Question 61

Cognitive response model:

Answer 61

Emphasizes the mediating role of idiosyncratic thoughts or
“cognitive responses” that people generate when being exposed to a persuasive
message. The consumer actively tries to make sense of the advertising message.

Question 62

Cognitive response approach

Answer 62

• Cognitive response model: Emphasizes the mediating role of idiosyncratic thoughts or
  “cognitive responses” that people generate when being exposed to a persuasive
  message. The consumer actively tries to make sense of the advertising message.
• Once a receiver is exposed to a persuasive message, they may actively add to and
  elaborate upon message content
• Cognitive responding may lead to persuasion, active resistance, or a neutral,
  unchanged position
• Cognitive responding is a function of the extent of motivation and ability to engage in
  elaborative thinking, with higher motivation and ability resulting in more extensive
  cognitive responding
• Failure to account for the processes that occur when ability and/or motivation are
  low, other than that the extent and valence of thoughts are less consequential for
  persuasion

Question 63

Dual process theories of persuasion

Answer 63

Information processing, judgement, and decision-
making must be viewed as a continuum.

o At one end, information processing is characterized by controlled, slow,
explicit, conscious, deliberate, analytical, effortful, reflective, rule-based,
bottom-up processing and judgement
o The other end involves relatively automatic, fast, implicit, impulsive,
immediate, experiential, non-conscious, effortless, associative, top-down
processing and judgement - Attitudes formed that way are less persistent, don’t predict behavior
very well, and are vulnerable to counter-persuasion

Question 64

Priming

Answer 64

activating a concept in consumer memory could directly affect overt behavior
without the participant being consciously aware that the activation procedure had any
influence on the subsequent behavioral response

Question 65

Unconscious processes in consumer behavior

Answer 65

• Priming; activating a concept in consumer memory could directly affect overt behavior
  without the participant being consciously aware that the activation procedure had any
  influence on the subsequent behavioral response
• Subliminal priming
• Scholars have argued that unconscious effects of advertising probably account for the
  bulk of consumer behavior
• Implicit processes are the rule rather than the exception when it comes to
  understanding the psychology of advertising