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Chapter 2 The Big Picture: The Evolution of Advertising

Chapter 2 The Big Picture: The Evolution of Advertising. Chapter Overview. Explains the principles of free-market economics, and the functions and effects of advertising. Chapter Objectives. Explain the role of competition in free-market economics.

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Chapter 2 The Big Picture: The Evolution of Advertising

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  1. Chapter 2The Big Picture: The Evolution of Advertising

  2. Chapter Overview Explains the principles of free-market economics, and the functions and effects of advertising

  3. Chapter Objectives Explain the role of competition in free-market economics Discuss the functions advertising performs in a free market Identify milestones in advertising history Discuss how the role of advertising has changed Explore advertising’s past, present, and future impacts on society

  4. Assumptions of Free Market Economics Self - Interest Complete Information Many Buyers & Sellers Absence of Externalities

  5. Functions & Effects of Advertising • Identify and differentiate products (branding) • Communicate product features and availability • Induce customers to try products and suggest reuse • Stimulate product distribution • Build value, brand preference, loyalty • Lower overall cost of sales

  6. Evolution of Advertising z

  7. Preindustrial Age of Advertising During this era, few could read

  8. Evolution of Advertising

  9. Industrializing Age of Advertising Producers needed mass consumption to match mass production For the first time, it cost less to buy a product than to make it Transportation breakthroughs facilitated distribution Increased need for mass marketing techniques

  10. Evolution of Advertising

  11. Industrial Age of Advertising Fresh markets for new, inexpensive brands of luxury and convenience goods

  12. Industrial Age of Advertising The Product Positioning Era Product differentiation Market segmentation Positioning

  13. Evolution of Advertising

  14. Postindustrial Age of Advertising Consumers became aware of environmental sensitivity

  15. Marketing Warfare Defensive Offensive Flanking Guerilla

  16. Global Interactive Age

  17. Global Interactive Age: New Media

  18. Advertising Ethics and Effects • Ethical advertising can . . . • Improve standards of living • Inform of availability of products • Imbue products with personality • Help us make personal statements • Foster free press and nonprofits

  19. Advertising Ethics and Effects • On the other hand, advertising can: • Be dangerous if misleading • Promote unhealthy products • Encourage conformity • Glorify conspicuous consumption • Target vulnerable markets

  20. Advertising Ethics and Effects Public service ads can shape attitudes

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