Chapter 21 Presentation

Promotional StrategyMKT4230

Evaluating the Social, Ethical, and Economic

Aspects of Advertising and Promotion

Patricia Knowles, Ph.D.

Associate ProfessorClemson University

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2Promotional StrategyMKT4230 2

Advertising and Promotion ViewpointsThese are the two views concerning the appropriateness and value of advertising.

TextbookPage 730

Creates consumer needs, faults

Promotes materialism, insecurity, and greed

More propaganda than information

Proponent arguments

Critic arguments

Provides information to consumers

Creates jobs

Encourages higher standard of living

Promotes competition

Helps new firms enter a market


Ethics in Advertising and PromotionThis chart defines and summarizes ethical considerations in advertising and promotion.

TextbookPage 731

Not all issues can be regulated

A marketing or promotion action may be legal but not ethical

Marketers must decide the appropriate-ness of

their actions

EthicsMoral principles and values that govern the actions and decisions

of an individual or group


Promoting Responsible DrinkingThis is an ad put out by the Miller Brewing Company to encourage parents to talk to their teenagers about the risks of underage drinking.

TextbookPages 731 – 732 / Exhibit 21 - 2


Shock AdsThis is an ad from the controversial “Death Row” campaign that was run by Benetton in 2000.



Untruthful or Deceptive AdvertisingThese are some of the key points about untruthful or deceptive advertising and its effects on consumers.

TextbookPages 733 - 734

Consumers

Don’t trust advertising

Rely on word of mouth

Find ads intrusive

Find relevance too low

Trust websites slightly more

Industry Problems

Deliberately untruthful

False and misleading claims

Faulty sweepstakes

Providing too little info

Puffery and embellishment


Advertising as Offensive or in Bad TasteAnother common complaint of advertising, particularly by consumers, is that ads are offensive and in bad taste. These are some of the reasons why advertising is viewed this way.


Sexual appealsObjectionable products Shock ads

Condoms

Feminine hygiene products

Women’s undergarments

Hemorrhoid products


Test Your KnowledgeAdvertisers are using shock advertising to:

A. Test their First Amendment rights

B. Get ads noticed in the midst of clutter

C. Make a statement against self-regulation

D. Test the ethics of the advertising industry

E. Act as advocacy ads for company management


What is Your Opinion of this Ad?This is an Airwalk ad that criticized for being suggestive and symbolizing sexual submission.


Is this woman portrayed as a sex object?

Does this ad contain cues that are sexually suggestive?

Does this ad present an image of sexual submissiveness?


Dolce & Gabbana’s Controversial, Offensive AdThis is a Dolce & Gabbana ad that was criticized as being offensive to women.

TextbookPage 732 / Exhibit 21 - 3


Attitudes Toward Sex in AdvertisingThis chart shows the varying attitudes that men and women have toward sex in advertising.

TextbookPage 736 / Figure 21 - 1


Advertising and ChildrenThese are key facts about the television viewing habits of children and the types of ads that target them.

TextbookPages 738

Children's TV Watching Behavior

Children watch an average of 22 hours of TV per week

They see up to 30,155 commercials per year

80% of ads targeted to children cover:

• Toys• Cereal• Candy• Fast food


Perspectives on Ads for ChildrenThis is a summary of the two perspectives on advertising to children

TextbookPage 738

Lack the knowledge and skills to evaluate advertising claims

Cannot differentiate between programs and commercials

Must learnthrough socialization

Must acquire skills needed to function in the marketplace

Advocates Argue That Children:

Marketers Argue that Children:


Other Areas of ConcernThese are some of the additional ways that companies market to children:

• Cable television programming• Internet ads• Ads encouraging children to call 900 numbers• An increase in toy-based programs• Marketing of violent films, music, games• Advertising and promotions in schools by companies like Coca-Cola



Social and Cultural ConsequencesThe social and cultural consequences of advertising and arguments both for and against advertising:


Does advertising encourage materialism?

Does advertising make people buy thingsthey don’t need?

Is advertising just a reflection of society?


Does Advertising Affect Society?This is an ad that was developed by the American Association of Advertising Agencies in response to criticisms of advertising.


These are the various ways in which advertising is accused of creating and perpetuating stereotypes.


Advertising and Stereotyping


Portrayal of women to reflect their changing role in society

Portrayal ofwomen assex objects

Ethnic stereotyping/representation

Gender stereotyping

Sexual orientation

Criticisms of AdvertisingWith Regard to

Stereotyping


Targeting Specific MarketsThis is an ad targeted to the African-American market.



Do Advertisers Control the Media?These are the arguments supporting the position that advertisers have control over the media.


Ads are the primary source of revenue for newspapers, magazines, television and radio

Advertisers may exert control over media by biasing editorial content, limiting coverage of certain issues, or influencing program content

Media’s dependence on ads for revenue makes them vulnerable to control by advertisers


Can Media Resist Advertisers?These are arguments against the position that advertisers control the media.


Advertisers need the media more than the media need any one advertiser

Media must report the news fairly and accurately to retain public confidence

Media maintain separation between news and business departments “The Wall”


The Social Value of MediaThis is a print ad developed by the Partnership for a Drug Free America and the Office of National Drug Control Policy.



Economic Effects of AdvertisingThese are ways in which advertising has an affect on the economy and an ad promoting the same.


Makes consumers aware of products and services

Provides consumers with information to use to make purchase decisions

Encourages consumption, fosters economic growth

Leads to economies of scale and lower prices


Economic Impact of AdvertisingThis visual summarizes the economic impact of advertising on consumer choice, competition, and product costs and prices.


Consumer Choice• Differentiation • Brand Loyalty

Product Costs & Prices• Advertising is an expense that

increases product costs• Increased differentiation

Competition• Barriers to entry • Economies of scale


Test Your KnowledgeFrom an economic perspective, advertising might lower the cost of a product by:

A. Creating barriers to entry for less efficient firms

B. Moving consumers to the consumer socialization stage of the buying process

C. Making it possible for firms to realize economies of scale through expansion of sales volume

D. Allowing firms to advertise at high levels along with competitors

E. Doing none of the above


Summarizing Economic EffectsThis chart summarizes the position that advertising equals market power.

TextbookPages 756 / Figure 21 - 3

Change consumers’ tastes

Reduces competition

Lowers sensitivity to price

Builds brand loyalty

Advertising Equals Market Power

Leads to higher prices

Leads to fewer choices

Results in higher profits


Summarizing Economic EffectsThis chart summarizes the position that advertising equals market power.

TextbookPages 756 - 757 / Figure 21 - 3

Provides useful information

Pressure for lower prices

Increases price sensitivity

Increases competition

Advertising Equals Information

Forces inefficient firms out

Pressure for high quality


The Value of AdvertisingThis is an ad that the American Advertising Federation (AAF) uses to promote the value of advertising in building strong brands.

TextbookPages 757 / Exhibit 21 - 27

Advertising. The way great brands get to be

great brands.


The Positive Effects of AdvertisingThis are excerpts from a speech given by Leo Burnett.

TextbookPages 757 – 758 / Figure 21 - 4