ADV370: Advertising Principles Exam 1 Study Guide

Flashcards covering key concepts from Chapters 1-6 of the ADV370: Advertising Principles course, including IMC, advertising definitions, economic, ethical, regulatory aspects, industry structure, consumer behavior, and market segmentation.

Integrated Marketing Communications (IMC)

A strategic process that marketers use to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time to consumers, customers, prospects, employees, and other targeted relevant external and internal audiences.

Advertising

The structured and composed nonpersonal communication of information, usually paid for and usually persuasive in nature, about products or ideas by identified sponsors through various media.

Relationship Marketing

Creating, maintaining, and enhancing long-term relationships with individual customers and other stakeholders for mutual benefit through a conscious and continuous management of customer contact for optimizing customer lifetime value.

Basic Relationship

A type of relationship marketing where the company sells the product but does not follow up in any way.

Reactive Relationship

A type of relationship marketing where the company sells the product and encourages the customer to call if they have any problems.

Accountable Relationship

A type of relationship marketing where someone from the company phones the customer shortly after the sale to check whether the product is meeting expectations.

Proactive Relationship

A type of relationship marketing where the company contacts the customer from time to time with suggestions about improved product use or helpful new products.

Partnership Relationship

A type of relationship marketing where the company works continuously with the customer to discover ways to deliver better value.

Defensive Marketing

Marketing aimed at retaining existing customers by building customer loyalty.

Offensive Marketing

Marketing aimed at attracting new customers by expanding market share.

Marketing

An 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.

Marketing Mix (4 Ps)

The combination of product, price, place (distribution), and promotion used to execute a marketing strategy.

Industrial Age

A historical period (mid-1800s to early 1900s) marked by mass production, mass media, and the rise of consumer packaged goods, which significantly influenced the development of modern advertising.

Global Interactive Age (21st Century)

The current period characterized by digital media, interactive communication, global markets, and increased consumer control over media and brand messages.

Branding

The process of creating a unique name and image for a product in the consumer's mind, mainly through advertising campaigns with a consistent theme. It helps differentiate products and build brand loyalty.

Differentiation

The process of identifying and emphasizing the unique characteristics of a product or service that make it stand out from competitors. It helps create competitive advantage.

Free Market

An economic system based on supply and demand with little or no government control, assumed to operate efficiently with self-interest, complete information, many buyers and sellers, and absence of externalities.

Self-interest

One of the principles of free market economics, where people and organizations are motivated to act in their own best interest.

Complete Information

One of the principles of free market economics, where buyers and sellers have full access to all relevant information to make informed decisions.

Many Buyers and Sellers

One of the principles of free market economics, ensuring competition and preventing monopolies.

Absence of Externalities

One of the principles of free market economics, meaning there are no hidden social costs related to the production or consumption of a product or service.

Primary Demand

Demand for a general product category, like all smartphones or all dairy products, often stimulated by advertising to new users.

Selective Demand

Demand for a particular brand within a product category, such as an iPhone or a specific brand of milk, often influenced by advertising focused on brand differentiation.

Abundance Principle

States that in an economy that produces more goods and services than can be consumed, advertising plays an important role by keeping consumers informed of their alternatives and allowing companies to compete more effectively for consumer dollars.

Short-term Criticism (Advertising Ethics)

Concerns about advertising's immediate effects, such as misleading claims, puffery, or offensive content.

Long-term Criticism (Advertising Ethics)

Concerns about advertising's cumulative effects on society, such as promoting materialism, reinforcing stereotypes, or targeting vulnerable populations.

Puffery

Exaggerated, subjective claims that cannot be proven true or false, such as 'the best coffee in the world.' It is generally legal in advertising.

False Advertising

Advertising that is misleading, untruthful, or deceives consumers, often leading to legal consequences.

Offensive Advertising

Ads that are perceived as tasteless, sexually suggestive, or disrespectful by certain audiences, potentially leading to brand backlash.

Subliminal Ads

Advertisements designed to influence viewers below their conscious level of awareness, often through brief, hidden messages. Their effectiveness is highly debated and largely discredited.

Social Responsibility (in Advertising)

Doing what society or stakeholders consider to be best for the welfare of people in general or for a specific community, balancing profits with public welfare.

Ethics (in Advertising)

The moral principles and values that guide decision-making and behavior in the advertising industry, focusing on what is right and wrong.

Self-regulation

The ability of an industry (like advertising) to police itself and set its own standards for ethical and fair practices, often to avoid stricter government intervention.

Federal Regulation

Government oversight of advertising practices through laws and agencies to protect consumers and ensure fair competition.

Federal Trade Commission (FTC)

The primary federal agency that protects consumers from deceptive and unfair advertising practices and ensures fair competition.

Food and Drug Administration (FDA)

A federal agency responsible for regulating advertising for food, drugs, cosmetics, and medical devices to ensure safety and truthful labeling.

The Advertising Industry

Comprises organizations involved in the process of creating and delivering advertising messages, including advertisers, advertising agencies, suppliers, and media.

Advertisers

Organizations that sponsor advertising to promote their products, services, or ideas.

Advertising Agencies

Independent organizations of creative people and businesspeople who specialize in developing and preparing advertising plans, advertisements, and other promotional tools for advertisers.

Suppliers (Advertising)

Provide specialized services to the advertising industry, such as art studios, web designers, film/video houses, and research companies.

Media (Advertising)

Channels of communication that carry the advertising message to the target audience, including TV, radio, print, digital, and out-of-home.

Local Advertising

Advertising placed by local businesses in a particular geographic area to attract customers within that community.

Product Advertising

A type of local advertising that promotes a specific product or service and stimulates short-term action while building brand awareness.

Institutional Advertising

A type of local advertising that attempts to create a favorable long-term perception of the business as a whole, rather than promoting a specific product or service.

Account Management (Agency)

The department within an advertising agency responsible for liaison between the agency and the client, ensuring client needs are met and campaigns run smoothly.

Research and Account Planning (Agency)

The department within an advertising agency that gathers primary and secondary data about consumers, markets, and competitors to inform strategy and creative development.

Creative Concepts (Agency)

The department within an advertising agency responsible for developing the ideas, words, and images for an advertisement, including copywriters and art directors.

Advertising Production (Agency)

The department within an advertising agency that manages the physical creation of advertisements, including print and broadcast production.

Media Planning and Buying (Agency)

The department within an advertising agency that identifies and selects media channels to deliver the advertising message to the target audience most effectively and efficiently.

Traffic Management (Agency)

The department within an advertising agency responsible for coordinating all phases of production and ensuring that ads are completed and delivered on time to the correct media outlets.

Client-Agency Relationship

The professional partnership between an advertiser and their advertising agency, crucial for successful campaign development and execution.

Pre-relationship Stage

The initial phase of a client-agency relationship where the agency is considered for the account.

Development Stage

The phase of a client-agency relationship where the agency and client are working together on the first campaign and establishing trust and communication.

Maintenance Stage

The ongoing phase of a client-agency relationship where successful campaigns are executed and the relationship is sustained over time.

Termination Stage

The final phase of a client-agency relationship when the client decides to end services with the agency.

Out-of-Home Media

Advertising media that reaches consumers when they are outside their homes, such as billboards, transit ads, and cinema ads.

Outdoor Advertising

A form of out-of-home media, typically referring to billboards and other large-format displays found along roadsides and in urban areas.

Transit Advertising

A form of out-of-home media placed on or in public transportation vehicles (buses, trains, taxis) or within transportation shelters and stations.

Direct Response Advertising

Advertising that directly solicits a response from the consumer, such as an order, inquiry, or visit, often through mail, email, or infomercials.

Product Life Cycle

The stages a product goes through from its introduction until its eventual withdrawal from the market, including Introduction, Growth, Maturity, and Decline.

Introduction Stage (Product Life Cycle)

The first stage where a new product is launched, with high promotional costs and efforts to build awareness and trial.

Growth Stage (Product Life Cycle)

The stage where sales and profits rise rapidly as the product gains market acceptance and distribution expands.

Maturity Stage (Product Life Cycle)

The stage where sales growth slows or levels off as the product becomes widely adopted, and competition is intense.

Decline Stage (Product Life Cycle)

The final stage where sales and profits fall, often due to technological advances, changing consumer tastes, or increased competition.

Product Positioning

The way a product is designed to be perceived in the marketplace by its target audience relative to its competitors.

Product Differentiation

The process of creating distinguishing features for a product to make it stand out from competitors.

Product Branding

The use of a name, term, sign, symbol, or design, or a combination of these elements, to identify the products of one seller and differentiate them from those of competitors.

Product Packaging

The container or wrapper for a product, which serves to protect, identify, describe, and promote the product.

Direct Distribution

A distribution channel where the manufacturer sells directly to the consumer without intermediaries.

Indirect Distribution

A distribution channel that involves one or more intermediaries (wholesalers, retailers) between the manufacturer and the consumer.

Intensive Distribution

A distribution strategy aiming to place a product in as many outlets as possible.

Selective Distribution

A distribution strategy where a product is sold in a limited number of outlets in a geographic area to maintain image and control.

Personal Communication

Communication that involves direct face-to-face or interactive dialogue between individuals, such as sales calls or customer service interactions.

Nonpersonal Communication

Communication that reaches a broad audience simultaneously through mass media, such as advertising, publicity, or sales promotion.

Utility Marketing

Refers to the product's ability to satisfy both functional needs and symbolic (psychological) wants. It includes Form, Place, Time, and Possession utility.

Form Utility

The value added to a product by changing its physical form to make it more useful to the consumer (e.g., raw materials into a finished product).

Place Utility

The value added to a product by making it available at a location where customers want to buy it.

Time Utility

The value added to a product by making it available when customers want to buy it.

Possession Utility

The value added to a product by making it easier for the customer to take ownership of it, often through financing or convenient purchasing options.

Customers

The individuals or organizations who purchase goods or services from a business.

Markets

Groups of customers for a specific product or service, categorized into consumer, business, government, and transnational markets.

Consumer Markets

Markets consisting of people who buy goods and services for personal use.

Business Markets

Markets consisting of organizations that buy goods and services for use in the production of other products and services or for resale.

Government Markets

Markets consisting of government agencies that buy goods and services to carry out public services.

Transnational Markets

Markets consisting of buyers from foreign countries, including consumers, businesses, and governments.

Marketers

The individuals or organizations responsible for planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services.

Consumer Behavior

The mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy needs and wants.

Physiological Screens

The five senses (sight, hearing, touch, taste, smell) that filter incoming information, affecting how consumers perceive ads.

Psychological Screens

The sub-conscious filters applied to incoming information, including needs, wants, attitudes, beliefs, and self-concept, which influence perception.

Classical Conditioning

A theory of learning where an unconditioned stimulus (UCS) associated with a conditioned response (UCR) is paired with a neutral stimulus (CS) until the CS alone elicits the conditioned response (CR).

Operant Conditioning

A theory of learning where behaviors are strengthened or weakened by their consequences (rewards or punishments).

Observational Learning

A theory of learning based on observing and imitating the behaviors of others, often involving attention, retention, reinforcement, motivation, and modeling.

Central Route Processing (Persuasion)

A theory of persuasion where consumers are highly involved in the purchase decision and pay close attention to the product's attributes and benefits, leading to thoughtful consideration.

Peripheral Route Processing (Persuasion)

A theory of persuasion where consumers are not highly involved in the purchase decision and rely on indirect cues like celebrity endorsement, music, or imagery, rather than detailed product information.

Market Segmentation

The process of dividing a broad consumer market into distinct subgroups of consumers who have common needs and characteristics and who respond similarly to a marketing action.

Demographic Segmentation

Dividing a market based on demographic variables such as age, gender, income, education, occupation, family size, and marital status.

Geographic Segmentation

Dividing a market based on geographic units such as nations, states, regions, counties, cities, or neighborhoods.

Psychographic Segmentation

Dividing a market based on consumer personality traits, values, attitudes, interests, lifestyles, and psychological characteristics.

Behavioral Segmentation

Dividing a market based on consumer behavior, such as product usage rate, loyalty status, benefits sought, purchase occasion, and readiness stage.

Culture (Segmentation Input)

The shared beliefs, values, customs, behaviors, and artifacts that characterize a group or society, influencing consumer behavior and segmentation.