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Advertising

Advertising. AG BM 460. The codfish lays ten thousand eggs The homely hen lays one. The codfish never cackles To tell you what she's done And so we scorn the codfish While the humble hen we prize Which only goes to show you IT PAYS TO ADVERTISE!. Joe Carroll. Advertising for winery.

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Advertising

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  1. Advertising AG BM 460

  2. The codfish lays ten thousand eggsThe homely hen lays one.The codfish never cacklesTo tell you what she's doneAnd so we scorn the codfishWhile the humble hen we prizeWhich only goes to show youIT PAYS TO ADVERTISE!

  3. Joe Carroll • Advertising for winery

  4. Introduction • An integral part of the food industry • Essential for consumer products • Creates demand • Can be very expensive

  5. Why Advertise? • Product awareness • Match competition • Build consumer loyalty • Gain access to markets • Inform consumers • Shift demand curve

  6. Major Food Advertisers -1998

  7. Costs of 30 sec. Television AdsFall 2002

  8. Cost of Commercials • $2.5 million for 30 seconds in 2006 Super Bowl • Survivor – final episode - $1 million

  9. Advertising New Products • Existence • Build Demand • Get leverage w/ retailers • Slotting fees

  10. Existing Products • Keep customers loyal • Match competition • Keep merchants happy • Build customer base • Make demand more inelastic • Deter entry • New segment

  11. Commodity Products • Milk, Pork, Beef • Match branded competition • Keep customers loyal • Build customer base • Make demand more inelastic

  12. Issues in Generic Advertising • Free–rider problem • Defining category – beef or angus • Keeping industry behind it • Is money enough? • Is it legal?

  13. Other Promotional Activity • Sales • Newspaper articles, recipes, etc. • Coupons • Fairs, dairy princesses, etc. • Store give-aways

  14. Does Advertising Pay? • Measuring benefits • Measuring costs • Payoff per dollar spent – 3 to 1? • How much is enough? • Who is too small to advertise? • Medium? Radio, TV, newspaper

  15. Final words • Huge expense • Protects existing products • Keeps little guys out • Apparently works • Prisoner’s dilemma

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