Chapter3 - Chapter 3 Outline Economic, Social, and...

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Chapter 3 Outline Economic, Social, and Regulatory Aspects of Advertising  Identifies and explains economic, social, ethical, and legal issues advertisers must consider Chapter 3 Objectives 1. Classify two main types of social  criticisms 2.  Explain social responsibility and  ethics 3. Discuss court rulings that affect  freedom of speech 4. Describe how federal agencies  regulate 5. Employ an economic model to  discuss effects 6. Understand how governments  regulate here and abroad 7. Define the regulatory roles of state  and local governments 8. Discuss self-regulation Two Main Controversial Areas :  Economic and Societal Economic Concerns Societal Concerns Affect product value? Influence consumer choice?  Make us buy things we don’t need? Make us more materialistic? Discourage competition Affect us subliminally? Increase prices? Debase language? Affect demand? Affect art? Billiards Model 1
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Economic Impact – Four Affected Areas 1. Product value Communicates  brand image Educates  customers Associates w/ desirable image 2. Prices and Competition Ad cost low vs. product cost Ad cost  à  Branding  Competition à  Efficiency 3. Consumer Demand Primary : Product  Category Secondary : Particular Brand 4. Consumer Choice Product differentiation 2
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Abundance Principle:   In an economy that produces more goods and services than can be  consumed, advertising does the following: Allows more-effective competition à  Self-interest Stimulates competition à  Many buyers and Sellers Keeps consumers informed  à  Complete information Self-regulates to keep market free  and open à  Absence of externalities Two Types of Criticism: 1. Short-term manipulative arguments a. Deception: i. puffery, nonproduct facts, bias, inaccuracy b. Subliminal myth 2. Long-term macro arguments a. Impacts values b. Proliferation c. Stereotyping d. Offensiveness e. Social Impact Short-Term Manipulative Arguments 
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This note was uploaded on 03/18/2008 for the course ADV 401 taught by Professor Wright during the Spring '08 term at University of Texas at Austin.

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Chapter3 - Chapter 3 Outline Economic, Social, and...

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