THE SCOPE AND BACKGROUND

OF ADVERTISING

Mackerel Team
 The scope of advertising: from

ICS TO local to global.

P The advertising industry

TO

BE
The people in advertising

We will cover the How large companies manage

following topics their advertising?
for this session:
The foundation of advertising

Customer behavior process and

IS E
its application in advertising
D

D
CUSS Standard of advertising
WHAT IS
ADVERTISING?
Advertising is any paid form of non-personal
presentation and promotion of ideas, goods and
services through mass media such as newspapers,
magazines, television or radio by an identified sponsor

Philip Kotler
THE SCOPE OF
ADVERTISING:
FROM LOCAL
TO GLOBAL.
THE ADVERTISING INDUSTRY
They range in size, from small Advertising agencies are the one who
independent business to huge assist the advertisers to plan, create, and
multinational firms, and in type from prepare ad campaigns and other
service organizations to industrial promotional materials
manufacturers to local charities and
political action committees
include photographers, illustrators,
printers, digital service bureaus, color film
separators, video production houses,
internet web developers, and others who
assist both advertisers and agencies in
preparing advertising materials
- Sell time and space to carry the
advertiser's message to the target audience
- Sell time on radios or television and sells
space on prints, outdoors, and digital media
THE PEOPLE IN ADVERTISING
Majority of people in advertising are actually
employed by the advertisers.

The advertisers (The Clients) involve:

- Local advertisers
- Regional advertisers
- National advertisers
TYPES OF LOCAL ADVERTISERS
Dealers or local
franchisees of national Stores
companies

Governmental, quasi-
Specialty business and
governmental and
services
nonprofit organizations
LOCAL ADVERTISING
sometimes called retail advertising

used by many businesses in various industry

critically important because most consumer sales are made locally

where relationships often start and truly develop

 TYPES OF LOCAL ADVERTISING
Product advertising
- Promotes a specific product or service
and stimulates short-term action while
building awareness of the business
- Major types of ads are the regular price-
line, sale, and clearance
Institutional advertising
- Attempts to create a favorable long-
term perception of the business
- Making the public aware of what the
business stands for and attempts to build
reputation and image
Classified advertising
Is used in newspapers for variety of
reasons: to locate and recruit new
employees, offer services, sell or lease new
and used merchandise

lops Ketchup “Think Diffe

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lì xì nè!
 TYPES OF LOCAL ADVERTISING
Product advertising
- Promotes a specific product or service
and stimulates short-term action while
building awareness of the business
- Major types of ads are the regular price-
line, sale, and clearance
Institutional advertising
- Attempts to create a favorable long-
term perception of the business
- Making the public aware of what the
business stands for and attempts to build
reputation and image
Classified advertising
Is used in newspapers for variety of
reasons: to locate and recruit new
employees, offer services, sell or lease new
and used merchandise

lops Ketchup “Think Diffe

eve like le’s ren
d pp t”
ne H A
oo

ei
nz
"N

"
 TYPES OF LOCAL ADVERTISING
Product advertising
- Promotes a specific product or service
and stimulates short-term action while
building awareness of the business
- Major types of ads are the regular price-
line, sale, and clearance
Institutional advertising
- Attempts to create a favorable long-
term perception of the business
- Making the public aware of what the
business stands for and attempts to build
reputation and image
Classified advertising
Is used in newspapers for variety of
reasons: to locate and recruit new
employees, offer services, sell or lease new
and used merchandise

lops Ketchup “Think Diffe

eve like le’s ren
d pp t”
ne H A
oo

ei
nz
"N

"
 Direct marketing

GRATO
E
INT

RS
Sales promotion

Integrated Integrated
Marketing
approach Media advertising
Communications

lì xì nè!

Public relations
 COOPERATIVE ADVERTISING
Cooperative advertising is a process through which two or more parties share the
cost of marketing a product within a region.

VERTICAL CO-OP HORIZONTAL CO-OP

- Manufacturer provides complete - Firms in the same business or
advertising & shares costs part of town advertise jointly
- National brand association - Expands advertising budget
- Professional quality advertising
REGIONAL ADVERTISERS
Include regional grocery and department store chains,
governmental bodies, franchise groups, telephone companies
and statewide or multi-state banks.

Markets exclusively within a particular region

NATIONAL ADVERTISERS
Sells in several regions or throughout the country

These include the consumer packaged goods manufacturers,

national airlines, media and entertainment companies,
electronics manufacturers

These firms make up the membership of the Association of

National Advertisers (ANA)
HOW LARGE
COMPANIES
MANAGE THEIR
ADVERTISING?
DECENTRALIZED
INTERNATIONAL
STRUCTURE
- Divisions are responsible for their own product
lines, marketing, and profits
- Each division has an advertising department to
coordinate sales and promotion across brands
- The corporate advertising department provides
information and guidance
 CENTRALIZE
GLOBAL
STRUCTURE
- Assumption that product use and needs are universal
- Standardized approach in all countries
- Extensive research to ensure advertising is basic and universal
MULTINATIONAL
CORPORATIONS lì xì nè!

- Usually exerts strong centralized control over all its marketing

activities
- Multinationals that use a standardized approach to marketing and
advertising in all countries are global marketers. They create global
brands, their assumption is that the way the product is used and the
needs its satisfies are universal
- Global advertisers include Coca-Cola, British Airways, British
Petroleum, TGI Friday's, FedEx, and Chiclets.
“SHARE A COKE”
MARKETING AND
CONSUMER BEHAVIOR:
THE FOUNDATION
OF ADVERTISING
THE RELATIONSHIP BETWEEN MARKETING,
CONSUMER BEHAVIOR, ADVERTISING

Advertising is 1 component of promotion in 4P

The whole 4p nowadays is based on customer behavior
CUSTOMER The process & activities people engage in
when searching for, selecting, purchasing,

BEHAVIOR using, evaluating, and disposing of products

Stages in the Consumer Decision-Making Process

Relevant Internal Psychological Processes

1. PROBLEM
REGCONITION

The point at which a potential customer realizes

they need or want a product or service
to solve the problem
 D is Ne t s
O ut s a tis f a c ti o n wN an
of Stock ee ds/ W

SOURCES OF PROBLEM RECOGNITION

Products/Pu
rch rketer-Induc ew Products
d a ed N
te as M
a
el e
R

s
MOTIVATION

The way consumers perceive a problem and

become motivated to solve it can greatly affect
the followings of the decision process.

To understand why consumers buy things,

marketers study motivations – the factors that
push them to take action.
 HIERARCHY OF NEEDS PSYCHOANALYTIC THEORY
Helps marketers understand which needs Our unconscious desires, fears,
their products satisfy and tailor advertising conflicts affect what we buy

Palmolive’s soap ads

in 1990s exploit
woman’s fear of
abandonment
2. INFORMATION
SEARCH
Customers begin to search for information
needed to make a purchase decision.

Customer may get information from internal

resource or external sources.
PERCEPTION

Individual's way of receiving, selecting,

organizing, and interpreting information to
form a meaningful understanding of the world.

Perception involves
Crucial for marketers for shaping the
3 distinct processes:
communication strategies.
1. Sensation
2. Selecting Information
3. Interpreting the Information
 SENSATION
Direct response of the senses (taste, smell, sight, touch, and hearing) to a
stimulus such as an ad, package, brand name, or point-of purchase display
SELECTING INFORMATION

Customers usually focus on

what are relevant to their needs
and ignore the irrelevant ones.
INTERPRETING THE INFORMATION
How customer interpret the brand’s messages would depend on their
internal psychological factors and the nature of the advertising

Subaru’ hidden messages

for LGBTQ+ community
3. ALTERNATIVE
EVALUATION
After have all the information, customer would
compare various brands or products to identify
the best option that can solve their problem.
 THE EVOKED SET EVALUATIVE CRITERIA
A group of brands/ products consumers think
about first when they consider a purchase.
Operating System

Price
lì xì nè!

S22 Ultra Battery life

Camera quality
Ip 15 Pro Max

Design, etc

Redmi Note 10
ATTITUDES
Feelings & opinions customers have about things
like products, brands or even celebrities.

Multi-attribute Attitude Model

INTEGRATION
Combining product knowledge,
information about different brands to evaluate alternatives.

Formal integration strategies Heuristics

Operating System

price-based promotion-based affect referral

Price
heuristics heuristics decision rule
Battery life

Camera quality

Design, etc
4. PURCHASE
DECISION
Purchase intention to certain brand is developed.

Sometimes there's a wait between deciding and

actual buying: longer wait for complicated stuff
and shorter wait for non-durable goods.

-> Marketers make this wait shorter or dissapear

POP reminding banner

5. POST-PURCHASE
EVALUATION
Consumer compare its performance to their
expectations -> satisfied or dissatisfied.

Cognitive dissonance, a psychological

discomfort after a difficult purchase decision.

-> advertise to reinforce consumer decisions

 LEARNING
Refers to how consumers acquire new behaviors, attitudes, or
preferences through exposure to advertisements.

Behavioral Learning Theory Cognitive Learning Theory

Classical Conditioning Operant Conditioning Observational learning

 STANDARDS OF ADVERTISING
Social ResponsibilityAdvertisements must be prepared and placed with a due sense of
social responsibility to consumers and to society

Privacy: only portray or refer to personal information that is publicly available

Decency & Offensiveness: not containing anything indecent, exploitative,...

Exploitation of Children & Young people: prohibited from exploiting, degrading, or

inappropriately portraying individuals under 18

Violence and anti-social behaviour: should not condone or depict violent or anti-social
behavior or property damage
Protecting the environment: prohibited from promoting or depicting any form of
environmental damage or degradation
STANDARDS OF ADVERTISING
Truthful presentation: Advertisements must be truthful, balanced and
not misleading.

Truthful presentation: Advertisements should not deceive

consumers, abuse trust, or exploit their lack of knowledge

Comparative Advertising: must be factual, accurate, clear, and not

denigrate competitors, focusing on similar products or services

Use of testimonials and endorsements: must not use personal

testimonials without permission, be verifiable, and represent the typical
 Launch of Increasing
new product Markets
Advertising

BENEFITS Create
Create Goodwill Customers
Awareness
LAUNCH OF A NEW PRODUCT INCREASING MARKETS
Play a significant role in introducing a new product to Help manufacturers expand their markets.
customers. New segmented markets and customers are found through
Customers are motivated and encouraged to buy products effective advertising.
through Ads. Help expanding new promising locations for companies.

ADS

CREATE GOODWILL CREATE CONSUMER AWARENESS

Advertising builds goodwill for brands.
A central root that provides customers with neccessary
infomation about brand and its products and services.
Advertising is educational and dynamic.
Advertising gives customers various choices and help
them to define which one best fits them.
Advertising helps customers to choose the right
products.
THANK YOU
FOR WATCHING