Chapter 1 Flashcards
Advertising
Any form of paid communication by an identified sponsor aimed to inform
and/or persuade target audiences about an organization, product, service, or idea.
The first type of advertising was
“outdoor advertising” done by traders and merchants
Industrial Revolution between 1730 and 1830
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
Advertising cannot be said to create consumer needs, but it is
capable of channeling
those needs by reshaping them into wants for specific products and services
Brand
The label with which to designate an individual product and differentiate it from
competitors.
Unique Selling Proposition (USP)
A summary statement used to meaningfully
differentiate the brand from the competition.
Types of advertising media:
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
Consumer segments
Advertising aimed at a specific group of consumers that share
common interests, values, or lifestyles.
Informational/argument-based appeal:
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
Emotional/affect-based appeal:
Ads that aim to influence the consumer’s feelings and
emotions rather than thoughts.
o Soft-sell approach
o Developed in the early 1900s
The functions of advertising
Commercial sponsorship
1. Facilitating competition among firms
o Competition for attention, preferences, and financial resources
- Communication with consumers about products and services
- Funding public mass media and other public resources
- Creating jobs
- 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
The information function varies with product category
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
Product life cycle
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.
- Introduction – informing consumers, creating brand awareness, induce
product trial - Growth – building market share, vis-à-vis competition
- Maturity – consolidating market share, creating consumer bran loyalty and
maintaining top-of-mind awareness - Decline – informational appeals for new and additional uses for the product
Two basic strategies for persuasion:
- Alpha strategies/approach motivation: Directly increasing the attractiveness of
the offer or the message - Omega strategies/avoidance motivation: Reducing consumer reluctance to
accept the position.
Alpha strategies/approach motivation:
Directly increasing the attractiveness of
the offer or the message
Omega strategies/avoidance motivation:
Reducing consumer reluctance to
accept the position.
The effects of advertising: a psychological perspective
- 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)
Cognitive consumer responses
Beliefs and thoughts about brands, products, and
services that consumers generate in response to advertising.
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
Consumer responses
- 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.
Experiment:
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
Mediation analysis:
Attempts to identify the intermediary psychological processes that
are responsible for the effect of an independent on the dependent variable.
- Independent variable has an impact on the assumed mediator
- Variation in the mediator significantly accounts for variation in the dependent
variable - Controlling for the mediator significantly reduces or eliminates the impact of
the independent variable on the dependent variable
Factorial experiments
Experiments in which two or more variables are manipulated
within the same design.
Moderator:
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
Distinction between direct and indirect sources:
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)
Attractiveness frequently functions as
a “halo”; heuristic – what is beautiful is good
Argument quality
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
Message structure
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
Message sidedness
- 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
Fear-arousing communications
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
Promotional mix
It includes five types of marketing communications in addition to
advertising, namely direct marketing, interactive marketing, sales promotion, public
relations (PR) and personal selling.
Integrated Marketing Communications (IMC)
IMC involves coordinating the elements
in the promotional mix to create synergy between them.
Direct marketing
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
Word-of-mouth (WOM) marketing
The influence agent is not a sales representative of
the company, but a committed user of the product.
Event marketing
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.
Direct mail
A personalized form of advertising, where consumers are typically
addressed by their names.
Interactive marketing
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
Sales promotion
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
Five basic functions of sales promotions:
- Increase market size
- Reward loyal customers
- Make existing customers more loyal
- Stimulate trial by new customers
- Support other communication tools
Sales promotion: Negative effects in the long run
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
Public relations
A communication instrument that is used to promote favorable
perceptions about the organization as a whole
In the context of IMC, two types of PR practice may be especially relevant to consider:
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
Personal selling
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.
Advantages personal selling
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)
Disadvantages personal selling
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
Modelling approach
Focus on the aggregate level. Entire markets or market segments
are the primary unit of measurement
Behavioral approach
Focus on individual consumer responses as a function of specific
advertising input variables.
o Level of specificity is high
o Experimental research methods
Sales-response models
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.
Concave sales response
(Sales-response models)
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
S-shaped model
(Sales-response models)
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
The aggregate level of analysis may obscure the confounding role of several factors:
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
Hierarchy-of-effects models
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
AIDA sequence
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
Foote, Cone-Belding (FCB) Grid
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
In the Rossiter, Percy, and Donovan planning grid, high and low involvement product
types are crossed with two classes of consumer motives, which ones?
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)
Both the FCB grid and the RPD grid..
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)
DAGMAR (Defining Advertising Goals for Measured Advertising Results):
Advertising
can yield nine different effects that are hierarchically ordered.
- Category need
- Brand awareness
- Brand knowledge/comprehension
- Brand attitude
- Brand purchase intention
- Purchase facilitation
- Purchase
- Satisfaction
- 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
Problems with Early models of individual responses to advertising: hierarchy-of-effects models
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
Consumer behavior model
Buying behavior was conceptualized as the joint resultant
of individual differences and environmental influences affecting information processing
and decision-making.
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.
Cognitive response approach
- 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
Dual process theories of persuasion
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
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
Unconscious processes in consumer behavior
- 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
