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þ ³The 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´ ±Arens &
Schaefer (2007)
 è 
þ A structured form of communication
employing both verbal and nonverbal
elements that are composed to fill
specific space and time formats
þ Typically directed toward groups of
people (mass communication).
þ Most is paid for by sponsors.
þ Usually persuasive.
þ Identifies the sponsor.
þ Reaches us through a channel of
communication.
  
 

þ Dart of the marketing process.

þ Theonly business function whose
primary role is to bring in revenue.
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þ ³an organizational function and a set
of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships in ways that
benefit the organization and its
stakeholders.´ -Arens & Schaefer
(2007)
 

 

 

 
þ ‰AGMAR
þ Awareness
þ Comprehension
þ Conviction
þ action
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þ Self-Interest
þ Complete Information
þ Many buyers and sellers
þ Absence of externalities (social
costs)
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þ Seven functions of advertising
þ To identify products and
differentiate them from others.
þ To communicate information about
the product, its features, and its
place of sale.
þ To induce consumers to try new
products and to suggest reuse.
þ Seven functions of advertising
(contd)
þ To stimulate the distribution of the
product.
þ To increase product use.
þ To build value, brand preference,
and loyalty.
þ To lower the overall cost of sales.
  




þ The Dreindustrial Age

þ The Industrializing Age

þ The Industrial Age

þ The Dostindustrial Age

þ The Interactive Age

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þ Dublic criticism
þ Advertising¶s effect on prices
þ Dromote or discourage competition?
þ Affect on overall consumer demand.
þ Effects on consumer choice and the
overall business cycle
þ Societal effects
þ More materialistic?
þ Forces us to buy things we don¶t need?
þ Reach us subliminally?
þ ‰ebase our language?
  è



þ Effect on the Value of Droducts

þ Effect on Drices

þ Effect on Competition

þ Effect on Consumer ‰emand

  è


· !
þ The Effect on Consumer ‰emand

þ Effect on Consumer Choice

þ Effect on the Business Cycle

þ The Abundance Drinciple

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è


þ ‰eception in Advertising

þ The Subliminal Advertising Myth

þ The Effect of Advertising on Our

Value System
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· !
þ The Droliferation of Advertising

þ The Use of Stereotypes in

Advertising

þ Offensiveness in Advertising
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þ Advertisers¶ Social Responsibility

þ Ethics of Advertising
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þ Freedom of Commercial Speech

þ The Tobacco Advertising

Controversy

þ The Issue of Advertising to Children

þ Consumer Drivacy
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þ The U.S. Federal Trade Commission
þ ‰efining ‰eception
þ ‰efining Unfairness
þ Comparative Advertising
þ Investigating Suspected Violations
þ Remedies for Unfair or ‰eceptive
Advertising
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· !
þ The Food and ‰rug Administration
(F‰A)
þ The food we eat is safe
þ The cosmetics we (NO, NOT ME)
use won¶t hurt us
þ The medicines and therapeutic
devices we buy are safe and
effective.
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· !
þ The Federal Communications
Commission (FCC)
þ Jurisdiction over radio, television,
telephone, satellite and cable TV,
and the Internet
þ Responsible for protecting the
public interest and encouraging
competition
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· !
þ The Datent and Trademark Office and
the Library of Congress
þ Registers and protects intellectual
property.
þ Datents

þ Trademarks

þ Copyrights
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&
 

þ By State Governments

þ By Local Governments
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þ The Better Business Bureau (BBB)

þ The National Advertising Review Council

(NARC)

þ Regulation by the Media

þ Television
þ Radio
þ Magazines
þ Newspapers
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· !
þ Regulation by Consumer Groups

þ Self-Regulation by Advertisers and

Ad Agencies
  
  


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þ Some foreign governments are more
authoritarian
þ Some restrict or ban ads for specific
products
þ Many countries prohibit puffery
þ Many European countries ban coupons,
premiums, free tie-in offers, etc.
þ In Europe, TV ads must be kept
completely separate from the programs
and be clearly recognizable as such.