Chapter 3 notes - Chapter 3: What is Advertising? -...

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Chapter 3: What is Advertising? - Producer generated information about products and services - The activity of attracting public attention to a product or business, by paid announcements in the print, broadcast, or electronic media Advertising by Firms… - Benefits -Increased sales (demand) -Increased consumer base - Costs -The actual dollar amount -Loss of sales if ad is bad Economists debate advertising - We agree that the goal is to increase demand - We disagree on the utility for consumers -Recall that markets most efficient in presence of “perfect” information -Does advertising bring us closer to “perfect” information? At its extreme… - Some argue that advertising is manipulation -Extreme consumer advocates -Advertising drives unnecessary demand -Conspicuous consumption - This view suggests consumers’ tastes are not independent - Do advertisers wield this much power over us? Again, the goal of advertising… To influence consumer tastes/preferences to shift demand curve to the right Our Consumer Goals: - Increase awareness and become more informed about advertising influences - Understand how advertisers present a distorted reality to viewers Advertising Overload: Approximate Frequency Radio…every 5 minutes
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This note was uploaded on 03/30/2008 for the course HACE 2100 taught by Professor Mooreman during the Spring '08 term at University of Georgia Athens.

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Chapter 3 notes - Chapter 3: What is Advertising? -...

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