Chapter Three Outline - Chapter 3 The Evolution of...

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Chapter 3 The Evolution of Promoting Brands
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The Rise of Advertising Exhibit 3.1 A Foundation For Advertising
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The Rise of Advertising, Continued The Rise of Capitalism In capitalists systems, business organizations must compete for survival in a free market setting. In this setting, it is natural that a firm would embrace a tool that assists it in persuading potential customers to choose its products over those offered by others. The Industrial Revolution The principle of limited liability allowed for the accumulation of large amounts of capital to finance the Industrial Revolution. The explosion in production capacity that marked the Industrial Revolution added to the importance of demand stimulation tools. Mass moves of consumers to cities and modern times helped create, along with advertising, consumer culture. Other important changes: shifting away from household self-sufficiency to greater dependence on marketplace goods; revolution in transportation; rapid population growth and urbanization.
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The Rise of Advertising, Continued Power in Distribution Channels Marketing and branding play a key role in the ongoing power struggle between manufacturers and their retailers. Retailers have power in the marketplace deriving from the fact that they are closer to the customer. To assert more power in distribution channels, U.S. manufacturers began branding their products in the late 1800s. They used advertising to build awareness of and desire for their brands. Customers who are loyal to brands demand that retailers carry those brands and will pay a premium price for those brands. Recently, big retailers have been reclaiming some of the power by negotiating large purchases from manufacturers at lower prices. Modern Mass Media The advent of mass-circulation magazines made national advertising possible. National advertising led to national brands. For the most part, mass media are supported by advertising. The ultimate goal is not content or entertaining but to provide a vehicle for making a profit through selling brands.
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Power in Distribution Channels, Continued Exhibit 3.2 Periods of Promotion
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Evolution of Promotion Social and economic trends, along with technological developments, are major determinants of the marketing messages used in advertising and other forms of promotion. Preindustrialization (before 1800) Before the Industrial Revolution, advertising’s presence in the United States was barely noticeable. The first advertisements were closer to today’s classifieds than to modern promotional
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Chapter Three Outline - Chapter 3 The Evolution of...

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