Chapter One The Evolution of Advertising Arens|Schaefer|Weigold Chapter One The Evolution of Advertising Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Learning Objectives Define integrated marketing communications Define advertising and distinguish it from other forms of marketing communications Explain the role advertising plays in business and marketing

Learning Objectives Illustrate the functions of advertising in a free-market economy Discuss how advertising evolved with the history of commerce Describe the impact of advertising on society

Marketing Communications Efforts and tools used to communicate with customers Newspaper ads, telemarketing and digital ads, event sponsorship, and coupons Integrated marketing communication Coordination and integration of messages from a variety of sources

Advertising Structured and composed nonpersonal communication of information that are paid for and persuasive in nature About products by identified sponsors through various media Type of marketing communication

Advertising Directed at groups Public service announcements (PSAs) Advertisement that serves public interest, for a nonprofit organization, carried by the media at no charge Medium: Communication vehicle that transfers a message from the sender to the receiver Word-of-mouth (WOM) advertising Mass media

Advertising and the Marketing Process Marketing strategy Statement of how the company will accomplish its marketing objectives Directs the company in formulating the marketing plan Determined by the blending of the marketing mix elements Advertising strategy Describes how to achieve the advertising objectives Substrategies Creative strategy Media strategy

Exhibit 1.1 - Advertising: Promotion Component of the Marketing Mix

Principles of Free-Market Economics Self-interest Complete information Many buyers and sellers Absence of externalities

Exhibit 1.2 - Functions and Effects of Advertising in a Free Economy

Evolution of Advertising Invention of paper and printing press gave rise to written advertising Preindustrial Age Production was the major concern of manufacturers Industrializing Age Growth of the U.S. industrial base, development of new brands of consumer packaged goods, product differentiation, unique selling proposition (USP), and market segmentation Industrial Age People became aware of the sensitivity of the environment Positioning Demarketing Postindustrial Age

The Effects of Advertising Advertising serves social needs Encourages increased productivity Primary income for many media Public service announcements (PSAs) Promote growth and understanding of social issues and causes

The Effects of Advertising Issues of truthfulness and ethics led to: Government regulation Industry efforts at self-regulation Formulation of consumer rights New consumer movement in the 1970s

The Effects of Advertising Shift in attention to more subtle problems Puffery Advertising to children Advertising of legal but unhealthful products Advertising ethics