Test 3 Notes

Test 3 Notes - Chapter24:

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 Chapter 24: Advertising criticism (historical), economic role of, social role of, specific areas of social criticism,   advertising’s legal and regulatory environ, FTC, puffery, testimonials, FDA, comparison ads,   NARC.                                                               Chapter 24   Advertising Criticism: A historical perspective              Advertising has changed markedly over the last 130 years. History of advertising  criticism:    1. The Era of Exaggerated Claims, 1865-1900. Most ppl accepted advertising as “buyer beware”  communication in which virtually any claim for a product was allowed. 2. The Era of Public Awareness, 1900-1965. It was during this period that both the public and  government regulators began to reject the notion of a laissez-faire, unregulated economic  system. Pure Food and Drug Act of 1906; proof that Congress recognized public  demands of protection from monopolies and prevailing untruthful portrayal of products  and services (ads). 3. The Era of Social Responsibility, 1965-present. During last 40 years, advertisers have come to  realize that truth alone is not sufficient to meet the demands of ethical advertising. W/out  totally rejecting the classical economic concept of the rational buyer, both critics and  enlightened marketers agree that some level of consumer protection is needed.   The Economic Role of Advertising T Currently American advertising accounts for approx. 2.5% of the gross national product C 1999 American Association of Advertising Agencies (4As) announced its  Value of Advertising  initiative, which was intended to educate marketers about the role of advertising in  building and protecting the brand franchise. Stated purpose was to show “that diminishing  the quantity and/or quality of advertising diminishes the value of the brand, and that the  creative employment of media advertising is the only long-term means of achieving and  retaining market dominance.” r Variety of opinions about usefulness and proper role of advertising. Tend to stem from one of  two fundamental views of advertising and economic benefits or liabilities that each  fosters: f Advertising as a consumer information tool. One view of advertising is that it is the  most efficient and economical means of providing consumers with beneficial  information about the availability of products and services. i Advertising as a detriment to market entry. A second, contrary position is that most  advertising results in brand switching among major companies and prevents the  introduction of new brands, esp. by smaller firms.
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This note was uploaded on 09/21/2011 for the course ADPR 3100 taught by Professor Reichart during the Spring '07 term at UGA.

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Test 3 Notes - Chapter24:

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