2. Advertising and Promotion Viewpoints
Creates consumer needs, wantsCreates consumer needs, wants
Promotes materialism, insecurity,
and greed
Promotes materialism, insecurity,
and greed
More propaganda than informationMore propaganda than information
Provides informationProvides information
Creates jobsCreates jobs
Encourages higher standard of livingEncourages higher standard of living
Promotes competitionPromotes competitionProponent
arguments
Proponent
arguments
Critic
arguments
Critic
arguments
Helps new firms enter a marketHelps new firms enter a market
3. Ethics in Advertising and Promotion
Not all issues can
be regulated
Not all issues can
be regulated
A marketing or
promotion action
may be legal but
not ethical
A marketing or
promotion action
may be legal but
not ethical
Marketers must
decide the
appropriateness
of their actions
Marketers must
decide the
appropriateness
of their actions
Ethics: Moral principles and values that
govern the actions and decisions of an
individual or group.
Ethics: Moral principles and values that
govern the actions and decisions of an
individual or group.
4. Advertising and Children
Children's TV
Watching Behavior
Children's TV
Watching Behavior
Children ages 2-11
watch an average of
22 hours of TV per
week and see 30,000
commercials per year
Children ages 2-11
watch an average of
22 hours of TV per
week and see 30,000
commercials per year
80% of all advertising
targeted to children
falls in four
product categories:
Toys, cereal, candy &
fast food restaurants
80% of all advertising
targeted to children
falls in four
product categories:
Toys, cereal, candy &
fast food restaurants
5. Perspectives on Ads for Children
Advocates Argue That Children:Advocates Argue That Children:
Marketers Argue Children:Marketers Argue Children:
Lack the knowledge and
skills to evaluate
advertising claims
Lack the knowledge and
skills to evaluate
advertising claims
Cannot differentiate
between programs and
commercials
Cannot differentiate
between programs and
commercials
Must learn
through socialization
Must learn
through socialization
Must acquire skills
needed to function in
the marketplace
Must acquire skills
needed to function in
the marketplace
6. Social and Cultural Consequences
Does advertising
encourage materialism?
Does advertising
encourage materialism?
Does advertising make
people buy things
they don’t need?
Does advertising make
people buy things
they don’t need?
Is advertising just
a reflection of society?
Is advertising just
a reflection of society?
7. ..How is he ?....
Mr Sharuk khanMr Sharuk khan
Promoting his movie…
on TV serials
Promoting his movie…
on TV serials
After all this he earns
above RS200 cr
After all this he earns
above RS200 cr
10. Do Advertisers Control the Media?
Advertising is the primary
source of revenue for
newspapers, magazines,
television and radio
Advertising is the primary
source of revenue for
newspapers, magazines,
television and radio
Advertisers may exert control
over the media by biasing
editorial content, limiting
coverage of certain issues, or
influencing program content
Advertisers may exert control
over the media by biasing
editorial content, limiting
coverage of certain issues, or
influencing program content
Media’s dependence on
advertising for revenue makes
them vulnerable to control by
advertisers
Media’s dependence on
advertising for revenue makes
them vulnerable to control by
advertisers
11. They must report the news
fairly and accurately to retain
public confidence
They must report the news
fairly and accurately to retain
public confidence
Advertisers need the media
more than the media need
any one advertiser
Advertisers need the media
more than the media need
any one advertiser
Media maintain separation
between news and business
departments “The Wall”
Media maintain separation
between news and business
departments “The Wall”
17. Role of Advertising in the Economy
Makes consumers aware
of products and services
Makes consumers aware
of products and services
Provides consumers with
information to use to
make purchase decisions
Provides consumers with
information to use to
make purchase decisions
Encourages consumption,
fosters economic growth
Encourages consumption,
fosters economic growth
18. Economic Impact of Advertising
Effects on Consumer Choice
• Differentiation
• Brand Loyalty
Effects on Consumer Choice
• Differentiation
• Brand Loyalty
Effects on Product Costs and Prices
• Advertising as an expense that
increases the cost of products
• Increased differentiation
Effects on Product Costs and Prices
• Advertising as an expense that
increases the cost of products
• Increased differentiation
Effects on Competition
• Barriers to entry
• Economies of scale
Effects on Competition
• Barriers to entry
• Economies of scale
19. Summarizing Economic Effects
Change consumers’ tastesChange consumers’ tastes
Reduces competitionReduces competition
Lowers sensitivity to priceLowers sensitivity to price
Builds brand loyaltyBuilds brand loyalty
Advertising
Equals
Market
Power
Advertising
Equals
Market
Power
Leads to higher pricesLeads to higher prices
Leads to fewer choicesLeads to fewer choices
Results in higher profitsResults in higher profits
20. Summarizing Economic Effects
Provides useful informationProvides useful information
Pressure for lower pricesPressure for lower prices
Increases price sensitivityIncreases price sensitivity
Increases competitionIncreases competition
Advertising
Equals
Information
Advertising
Equals
Information
Forces inefficient firms outForces inefficient firms out
Pressure for high qualityPressure for high quality
