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chapter one
Advertising
Today and How
We Got Here
McGraw-Hill/Irwin
Essentials of Contemporary Advertising
Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
MKT 340
Principles of Advertising
 Dr Freddy Lee
 [email protected], STF 915
 Essentials of Contemporary Advertising
 3 Quizzes, 1 Final
1-2
Objectives
 Define advertising and differentiate it
from other forms of marketing
communications
 Explain the role advertising plays in
business and marketing
 Explain the importance of advertising in
a free-market economy
1-3
Objectives_2
 Discuss how advertising evolved with
the history of commerce
 Explore the impact of advertising on
society yesterday, today, and tomorrow
1-4
Advertising
The structured and composed
nonpersonal communication of
information, usually paid for and
usually persuasive in nature, about
products (goods, services, and ideas)
by identified sponsors through
various media
1-5
Functional Divisions in Business
Operations
Finance
Marketing
1-6
Marketing
Marketing is the process of
planning and executing
the conception, pricing,
distribution, and promotion of
ideas, goods, and services
to create exchanges that
satisfy the perceived needs,
wants, and objectives
of individuals and organizations
1-7
The Marketing Mix
Product
Place
Price
Promotion
1-8
Exhibit 1-1 Advertising and
the Marketing Process
1-9
Free Market Economics
Self-interest
Complete information
Many buyers and sellers
Absence of externalities
1-10
Exhibit 1-2 Functions and Effects of
Advertising as a Marketing Tool
 To stimulate
 To identify and
distribution
differentiate products
 To increase product
 To communicate
use
information
 To induce consumers  To build value,
brand preference,
to try new product
and loyalty
and to suggest reuse
 To lower overall cost
of sales
1-11
Evolution of Advertising





Preindustrial Age
Industrializing Age
Industrial Age
Postindustrial Age
The Interactive Age
1-12
Industrializing Age
1-13
The Industrial Age
 Birth of product
differentiation
 Consumer
packaged goods
introduced
 Shift from production
orientation to sales
orientation
 Heavy national
brand advertising
1-14
Marketing in the Industrial Age
Product
differentiation
Market
segmentation
Positioning
1-15
The Postindustrial Age
Demarketing
emerges in the
postindustrial
age:
This ad shows
the dangers of
driving while
using a mobile
phone
1-16
Economic Factors
During the Postindustrial Age
 Aging of traditional products with a
corresponding growth in competition
 Growing affluence and sophistication of
the consuming public
 Competition, intensified by lower trade
barriers and growing international trade
1-17
The Interactive Age
Mass media shifts to “narrowcasting”
as technology empowers consumers
1-18
Integrated
Marketing Communications
Relationship marketing
Consistency
Integration throughout
1-19
Major Developments Affecting
Advertising
 Pure Food and Drug
Act (1906)
 Federal Trade
Commission Act
(1914)
 Development of
Professional Groups
 Bill for Consumer
Rights (1962)
– Right to safety
– Right to choose
– Right to
information
– Right to be heard
1-20
Key Terms_1
 Advertising
 Branding
 Consumer
packaged goods
 Consumers
 Demarketing
 Externalities
 Goods
 Ideas




Industrial age
Industrializing age
Marketing
Marketing
communications
 Marketing mix
 Market
segmentation
 Medium
1-21
Key Terms_2
 Narrowcasting
 Personal video
recorders
 Positioning
 Postindustrial age
 Preindustrial age
 Product
 Product
differentiation
 Public service
announcements
 Sales promotion
 Services
 Unique selling
proposition
 Word of mouth
advertising
1-22