Unit 5-Be a Critical Consumer Section 1.5 Advertising and Consumer Decisions

Section 1.5 Advertising & Consumer Decisions Goals: Describe the different types of advertising. Explain how you can recognize deceptive advertising.

Key Terms Advertising Puffery WOW, that’s it!!!!!

Section 1.5 Advertising & Consumer Decisions Why do businesses advertise? To encourage consumers to buy their products so they can make a profit. $$$$$$$$$$$$$$$$$$$$$$$$$$$$ What is advertising? Advertising is a paid form of communication sent out by a business about its product or service.

5 Types of Advertising Brand Advertising Informative Advertising Comparative Advertising Defensive Advertising Persuasive Advertising Let’s take a look at each one. Wait for it…………………..

1. Brand Advertising Brand Advertising is to cause you to remember a particular brand name. Concept: If you remember the brand name you will be more likely to buy the product when you shop. Used to introduce new products or reinforce consumer loyalty. Types of Brand Advertising Jingles and Slogans Benefits: Consistent quality Costs: Cost of advertising rolled into price

2. Informative Advertising Informative Advertising is designed to influence you to buy a product by educating you about the product’s benefits. Concept: Provides information that helps you make a good buying decision. Used for complex or technical products. Don’t include downsides of the product. Example: When Volvo cars make television advertisements that educate consumers about their product safety.

3. Comparative Advertising Comparative Advertising tries to encourage you to buy their product by comparing it to competing products. Concept: To convince you to buy the advertised product instead of the targeted competing product. Highlights the best qualities of a product. Exploits weaknesses of a competitor’s product. Example: Geico Car Insurance Company advertisements comparing their insurance benefits over other insurance companies.

4. Defensive Advertising Defensive Advertising is the counter attack from comparative ads to respond to claims made by other companies. Concept: By defending themselves they are trying to prove they have the better product. Does not provide a complete or balanced picture of either products. VS.

Persuasive Advertisement Examples Persuasive Message: Women will have more self-esteem if they read Marie Claire magazine. Keep a high self-esteem even after taking your heels off.

5. Persuasive Advertising Persuasive Advertising is designed to appeal to your emotions to influence you to buy it. Concept: Companies try to convince you that buying these products will make you happier, more successful or more satisfied. They do not provide much useful information. Attractive people who appear happy or popular.

Persuasive Advertisement Example Persuasive Message: People will have double the fun if they chew Doublemint gum.

Costs & Benefits of Advertising to Consumers! Costs: Advertising is built into the price you pay when you buy a good or service. Benefits: If advertising increases sales it allows businesses to produce a higher volume, which lowers production costs per product, and may lower prices.

Deceptive Ads vs. Puffery Deceptive Advertising is DELIBERATELY designed to mislead you. Factually Wrong- Deceptive Advertisers use vague claims to avoid fines for deceptive ads. Puffery is an innocent exaggeration. 50% off or enormous markdowns (markups too high to begin with.) Free gifts when buy products. Complete information necessary (even in small print) is legal. Puffery is legal

Advertising & Decision Making Never make decision based upon advertisements alone. Gather information from several sources. Evaluate information and consider alternative choices.