Topic 1 Flashcards
What is advertising?
Any form of paid communications by an identified sponsor aimed to inform or persuade a target audience about a product, service or organisation.
How many commercial messages is the average US consumer exposed to per day?
1,000
According to McDonald & Scott (2007), what was the first type of advertising?
Outdoor advertising. Traders and merchants from ancient Egypt, Greece and Rome told their community what they were selling at what price.
What important economic change led to the explosion of wealth of trade, plus a media to advertise with them?
The industrial revolution, 1730-1830.
What do we call a label designated to a product to differentiate it from others?
Consumer brand.
What do we call a summary statement used to meaningfully differentiate a brand from its competitors?
Unique selling point (USP)
According to McDonald and Scott (2007), newspaper advertising is second to TV advertising. What percentage of media expenditures do print ads account for?
30%
Magazine ads are specifically targeted towards those who share common interests, values and lifestyles, these groupings are called:
consumer segments.
How much was spent on advertising in 2015?
$574 billion
How much was spent on advertising in 2018?
$668 billion
According to McDonald and Scott (2007), from the 1800’s to the early 20th century, print ads predominantly used informational OR argument based ads, which included the use of facts to appeal to reason. This type of approach is called the:
hard sell approach.
The hard sell approach uses show and tell, using a set of persuasive arguments to convince prospective buyers. This argument based approach was also called:
the reason why approach.
In the early 1900’s, advertising adopted a different approach, which used emotional OR affect based advertising to convince consumers emotions and feelings. This type of approach is called the:
soft sell approach.
Which type of approach is used for durable goods in richer countries?
Informational or argument based approach.
Which type of approach is used for new or recalled products?
Informational or argument based approach.
What type of approach is used for existing products?
Emotional or affect based approach.
Which type of approach is used for non-durable, experimental goods in poorer countries?
Emotional or affect based approach.
According to Tybout et al. (1981), what type of approach did McDonalds used to effectively overcome a rumour about worms in their hamburger meat?
Emotional based approach.
What are the 3 main ways advertising aids in the functioning of society?
- Facilitates competition between companies, consumer attention and preferences, choice and consumer financial resources.
- Is the prime means for companies to inform consumers about their goods and services.
- Is a key source of funding for major mass media using sponsorship (e.g. YouTube).
What are the 2 main ways advertising aids the individual consumer?
- Informs: creates non-evaluative consumer responses such as knowledge and beliefs.
- Persuades: generates or changes an evaluative (valenced) response to make the advertised brand more favourable.
What are the 4 stages of the product lifestyle cycle?
- Introduction
- Growth
- Maturity
- Decline
What occurs during the introduction phase (1) of the product lifestyle cycle, and what its main objectives?
What occurs:
Inform potential customers, induce product trial, secure distribution to retail outlets, focus on higher income groups, prices set high due to high manufacturing costs.
Objectives:
Create brand awareness, knowledge and attitude.
What occurs during the growth phase (2) of the product lifestyle cycle, and what are its main objectives?
What occurs:
Maintain promotional expenditures, lower prices to appeal to price sensitive buyers, improve product quality, add new features/models/accessories, enter new market segments, increase distribution, shift to product preference advertising.
Objectives:
Promote brand attitude and preference.
What occurs during the maturity phase (3) of the product lifestyle cycle, and what are its main objectives?
What occurs:
Pursue new customers (convert people), enter new market segments, increase product used through more additional applications, improve product, modify marketing programs, find niche, markdown prices, increase ads and promos, increase research and development for product, supply product for private label branding.
Objectives:
Promote brand attitude, create brand loyalty, increase customer satisfaction.
What occurs during the decline phase (4) of the product lifestyle cycle, and what are its main objectives?
What occurs?
Increase company’s investment to dominate market, maintain firm investment until uncertainties resolved, decrease investment by dropping unprofitable customer groups whilst increase increasing investment in profitable ones, milk the investment for cash, divest the line.
Objectives:
Purchase new target consumer groups.
What is the best type of approach to use when there are problems associated with a product or the need to do a product recall?
Informational based approach.
Persuasion
According to Knowles and Linn (2004), what are the two strategies advertisers can use to persuade customers?
- Alpha.
2. Omega.
Persuasion
A type of approach motivation that uses strong arguments which increase incentives for accepting a message position, is called an:
alpha strategy.
Persuasion
A type of avoidance motivation that stops a consumer from moving away from a position, such as by using fear based appeals to reduce resistance, distraction techniques, is called an:
omega strategy.
