© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 1 Advertising and Consumer Decisions Objectives: By the end of class, students will be able to :  Describe different types of advertising  Explain the difference between deceptive advertising and puffery

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 2 Types of Advertising  Brand advertising  Informative advertising  Comparative advertising  Defensive advertising  Persuasive advertising  Benefits and costs of advertising

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Brand Advertising  The purpose of brand advertising is to cause you to remember a particular brand name.  Advertisers hope that if you remember the brand name, you will be more likely to buy their product when you shop.  Can you name at least one company whose brand advertising you can quickly recall? Slide 3

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Brand Advertising continued  Companies can use jingles or slogans when attempting to cause consumers to remember their product. Here are four examples:  Alka Seltzer Jingle Alka Seltzer Jingle  Band Aid Jingle Band Aid Jingle  State Farm Jingle State Farm Jingle  Wendy's Jingle Wendy's Jingle Slide 4

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Brand Advertising Continued  Brand advertising also includes benefits of brands advertising.  In these types of ads, the benefits of buying a specific brand is at the forefront of the advertisement. Slide 5

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Informative Branding  Informative advertising is designed to influence consumers to purchase a product by educating them about the products benefits.  Informative advertising is usually used in the computer and automobile industry. Slide 6

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Comparative Advertising  This style of advertising is utilized to lure customers by comparing its product to those of a competitor.  Fast Food establishments and cleaning product companies are two examples of industries that utilize Comparative Advertising Slide 7

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Defensive Advertising  Defensive advertisements are utilized to respond to claims made by other companies about their products. They are similar to Comparative Advertisements but are reactionary rather than initial. Slide 8

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Persuasive Advertising  This style of advertising is designed to appeal to a consumers emotions to influence purchasing their product or service.  These ads focus on creating a desire in the consumer that by owning a particular product they will be happier, more successful or more satisfied.  Cosmetics are usually advertised this way. Slide 9

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Benefits and Costs of Advertising  Businesses spend over $250 Billion each year trying to influence consumers to buy their products.  The costs of advertisements are built into the price of the goods you purchase. Certain brands promote that they do not advertise to save the consumer money on their finished product. Slide 10

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Deceptive Ads versus Puffery  The difference between deceptive ads and legitimate ads is that deceptive ads are deliberately trying to deceive you.  Puffery is innocent exaggeration. Puffery is legal, deceptive advertising is NOT. Slide 11 Puffery Deceptive Advertising

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Advertising Summary  Advertising is all around consumers in many shapes and forms.  Ads can be found almost everywhere  The best tool that consumers have against advertisements is to utilize the decision making process whenever making a purchase.  It is illegal to claim a product does something if it does not in fact do what is advertised.  That’s All Folks! That’s All Folks! Slide 12