BMGT350 Chapter 15

BMGT350 Chapter 15 - BMGT350 Chapter 15 Advertising and...

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BMGT350 Chapter 15 Advertising and Public Relations THE EFFECTS OF ADVERTISING: Advertising: any form of impersonal, paid communication in which the sponsor or company is identified o Popular form of promotion, especially for consumer packaged goods and services Advertising and Market Share: Today’s most successful brands of consumer goods (Coca Cola and Ivory soap) were built by heavy advertising. Today’s advertising dollars are spent on maintaining brand awareness and market share New brands with a small market share tend to spend proportionately more for advertising and sales promotion than those with large market share for 2 reasons : o 1. Advertising response function: beyond a certain level of spending for advertising, diminishing returns set in. That is, sales or market share begins to decrease no matter how much is spent on advertising and sales promotion Understanding the advertising response function helps marketers use budgets wisely o 2. A certain minimum level of exposure is needed to measurably affect purchase habits Need to achieve the exposure needed to penetrate consumers’ perceptual defenses, and affect purchase intentions The Effects of Advertising on Consumers: Advertising informs consumers about products and services and influences their attitudes, beliefs, and ultimately their purchases Advertising cannot change deeply rooted values and attitudes, but it may succeed in transforming a person’s negative attitude toward a product into a positive one Advertising reinforces positive attitudes toward brands Advertising can affect the way consumers ran a brand’s attributes (safety, versatility, etc.) MAJOR TYPES OF ADVERTISING: Institutional advertising : used if the goal of the promotion plan is to build up the image of the company or the industry o Promotes the corporation as a whole and is designed to establish, change, or maintain the corporation’s identity o Only asks the audience to maintain a favorable attitude toward the advertiser o Advocacy advertising: typically used to safeguard against negative consumer attitudes and to enhance the company’s credibility among consumers who already favor its position Used when corporations want to express their views on controversial issues React to criticism or blame Ward off increased regulation, damaging legislation, or an unfavorable outcome in a lawsuit Product advertising : used if the advertiser wants to enhance the sales of a specific good or service o Promotes the benefits of a specific good or service o The products stage in the life cycle determines which type of product advertising is used: Pioneering advertising: intended to stimulate primary demand for a new product or product category Heavily used during the introductory stage Offers consumers in-depth information about the benefits of the product class Seeks to create interest Competitive advertising: the goal is to influence demand for a specific brand
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