Chapter 04

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Chapter 04

  1. 1. Chapter 4 Social, Ethical, and Regulatory Aspects of Advertising and Promotion 1 PPT 4-1 © 2009 South-Western, a part of Cengage Learning
  2. 2. Social Aspects of Advertising  Advertising Educates Consumers – Pro: Advertising informs – Con: Advertising is superficial and intrusive Is there “information” in this ad?  Advertising improves living standards – Pro: Ads lower the costs of products – Con: Ads are wasteful and help only some 2 PPT 4-2
  3. 3. Ad in Context Example Critics of advertising feel that advertising is superficial because many ads carry little actual product information. Do you think advertising is superficial? 3 PPT 4-3
  4. 4. Social Aspects of Advertising  Advertising Affects Happiness and Well-Being – Con: Ads create needs – Pro: Ads address a wide variety of basic human needs – Con: Ads promote materialism – Pro: Ads reflect society’s priorities 4 PPT 4-4
  5. 5. Ad in Context Example Critics feel advertising promotes materialism. 5 PPT 4-5
  6. 6. Social Aspects of Advertising  Advertising: Demeaning and deceitful, or liberating and artful? – Con: Ads perpetuate stereotypes – Pro: Advertisers are more sensitive now – Con: Ads are often offensive – Pro: Ads are a source of liberation – Con: Ads deceive via subliminal stimulation – Pro: Advertising is art 6 PPT 4-6
  7. 7. Ad in Context Example Do you think this ad perpetuates stereotypes? 7 PPT 4-7
  8. 8. Ad in Context Example Do you think this ad perpetuates stereotypes? 8 PPT 4-8
  9. 9. Social Aspects of Advertising  Advertising has a Powerful Effect on the Mass Media – Pro: Ads foster a diverse and affordable mass media that provides information and exposure on important issues. – Con: Advertising affects and controls programming. “Branded Entertainment” blurs entertainment and persuasion. And, controversial issues do not attract advertisers. 9 PPT 4-9
  10. 10. Ethical Aspects of Advertising Ethics are the moral standards against which behavior is judged. Key areas of debate regarding ethics and advertising are:  Truth in advertising  Advertising to children  Advertising controversial products 10 PPT 4-10
  11. 11. Ethical Aspects of Advertising Truth in Advertising  Deception is making false or misleading statements, but puffery (commercial exaggeration) is legal.  Cannot legislate against emotional appeals 11 PPT 4-11
  12. 12. Ethical Aspects of Advertising Advertising to Children—Issues  Advertising promotes superficiality and materialism in children  Children are inexperienced and easy prey  Persuasion to children creates child-parent conflicts  What does the literature say about kid’s abilities to process persuasive information? 12 PPT 4-12
  13. 13. Ethical Aspects of Advertising Advertising Controversial Products  Critics question “targeting” minorities  Tobacco, alcohol, gambling and lotteries are product categories of greatest concern  How does the concept of “primary demand” provide insights here?  What does the literature say about advertising’s impact on these product categories? 13 PPT 4-13
  14. 14. Regulatory Aspects of Advertising Areas of advertising regulation:  Deception and unfairness – Representation or omission that can mislead – Judged from perspective of consumer  Competitive issues – Vertical cooperative advertising – Comparison advertising – Monopoly power  Advertising to children 14 PPT 4-14
  15. 15. Key Regulatory Agents Government Regulation  Federal Trade Commission (FTC) – Wide range of regulatory programs and remedies  Federal Communications Commission (FCC)  Food and Drug Administration (FDA)  U.S. Postal Service  Bureau of Alcohol, Tobacco, and Firearms 15 PPT 4-15
  16. 16. Key Regulatory Agents--FTC FTC Programs and Remedies  Advertising Substantiation Program  Affirmative Disclosure  Consent Order – Cease and Desist Order – Affirmative Disclosure  Corrective Advertising  Control of Celebrity Endorsements 16 PPT 4-16
  17. 17. Key Regulatory Agents (con’t) Industry Self-Regulation  National Advertising Review Board (NARB)  State and Local Better Business Bureaus  Ad Agencies and Associations  Media Organizations 17 PPT 4-17
  18. 18. Key Regulatory Agents (con’t) Internet Self-Regulation  No industry-wide trade association has emerged to date  Global Dialogue on Electronic Commerce (GBDe) is emerging as a governing body  Little progress has been made to address consumers’ complaints 18 PPT 4-18
  19. 19. Key Regulatory Agents (con’t) Consumers as Regulatory agents  Consumerism: Grass roots consumer movements  Consumers Organizations – Consumer Federation of America – Consumers Union – Consumer Alert – Commercial Alert 19 PPT 4-19
  20. 20. Regulation of Other Promotional Tools Direct Marketing and e-Commerce  Privacy, Contests, Telemarketing  Spam=30 million messages/minute, 50 billion/day worldwide  “Phishing” as insidious spam Sales Promotion  Premiums, Trade Allowances, Contests/Sweepstakes Public Relations  Privacy, Copyright Infringement, Defamation (slander and libel) 20 PPT 4-20

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