1. Peggy Simcic Brønn Chapter 13 Advertising – how it might work

2. Peggy Simcic Brønn zAdvertising -- any paid form of non- personal presentation and promotion of ideas, goods and services by an identified sponsor to a targeted audience and delivered primarily through the mass media.

3. Peggy Simcic Brønn Leaders in US National Advertising -- 1890s zIvory Soap zLipton’s Teas zMennen’s Talcum Powder zPond’s Extract zPrudential Insurance Co. zQuaker Oats

4. Advertising, 1950 - 1975 zVoice of consumer became more powerful zCigarette ads banned from TV zComparison ads mentioning competition was accepted zOld staple magazines disappeared, special interests magazines filled void

5. 1950 - 1975 zInserts became more popular in newspapers zRadio nearly died with advent of TV, but recovered zDirect-response advertising saw huge growth zTwo biggest developments: TV and electronic data processing

6. Advertising in the 1980s zNew technology zAudience fragmentation -- end of traditional mass market zConsolidation zCredit -- buy now pay later

7. Advertising and the 21st Century zMuch greater consumer involvement and control zMore toward 2-way communication zMarshall McLuhan’s Global Village becoming a reality zCosts will continue to increase

8. Table 13.1 Sequential models of advertising. - AAida SequenceHierarchy of effectsInformation sequenceprocessing seq. AwarenessPresentation CognitiveAttention AttentionKnowledge Comprehension InterestLikingYielding AffectivePreference DesireConvictionRetention Conative ActionPurchaseBehavior

9. Peggy Simcic Brønn Strong and Weak Theories of Advertising zThe strong theory suggests that advertising can persuade someone to buy a product for the first time and generate long-run purchase behavior. The process is similar to the hierarchy of effects model. zThe Weak theory suggest that advertising provides reassurance and reinforces past purchase behavior. The ATR Model is the most appropriate.

10. Strengths of the Advertising Media Reaches large mass audiences Intensifies broad-based product demand Increased brand knowledge Builds brand awareness Creates long-term brand images and positions Reminds consumers about positive experiences with the brand Provides repetition to increase memorability

11. Weaknesses of the Advertising Media Often perceived as intrusive - consumers may avoid it. Clutters the media environment. Wastes efforts on non-target audience members. Escalates costs of product. May not be most cost effective means of marketing communication. Does not allow marketers to closely determine accountability or immediate results as sales, promotion and other mc elements. Traditionally, advertising has received undue attention, thus making it difficult to integrate it with other mc elements.

12. Advertising’s Correlation to Sales 1.) Businesses with higher relative advertising-to- sales ratio earn a higher return on investment. 2.) Advertising expenditures are related to market share. 3.) Companies that do not cut advertising during down times have the highest growth in sales and net income, while companies that do cut such expenditures have lowest sales and net income increases.

13. Figure 13.2 A cognitive processing model (adapted from Lutz et al. (1983); used with kind permission).

14. Figure 13.3 The elaboration likelihood model (based on Aaker et al. (1992)).

15. Peggy Simcic Brønn Key Advertising Characteristics zTo be successful advertising should: yPresent a new or substantially different product yBe interesting and stimulating yBe personally significant zAs a result an advertisement must be significantly valuable to an individual.

16. Figure 13.5 A cognitive association model of advertising/brand relationships.