UNIT 11: ADVERTISING

READING 1: ADVERTISING AND VIRAL MARKETING

  1. How companies advertise

  • informs consumers about the existence and benefits of products and services + persuade them to buy

  • most companies use advertising agencies

  • give: brief ( a statement of objectives) + overall advertising strategy concerning the message + budge

  • the agency creates: advertisements + media plan specifies what channels to be used

  1. Potential drawbacks of advertising

  • difficult to know how much to spend on advertising

  • some companies have a fixed percentage of current sales revenue or comparative-parity method (spend = competitors)

  • Creative and expensive ads do not guarantee increased sales

  1. Benefits of advertising

  • essential for launching new products

  • sales promotion:

    • free samples

    • price reductions

    • competitions

    → Initial trial of product

  • Increase ads → increase sales

  1. Viral marketing

  • users share to their contacts

  • create a buzz

  • ideas spread quickly at little cost