2-1

chapter2

Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinContemporary Advertising, 11e

The Evolution of Advertising

Explains about the Principles of Free-Market Economics, Functions and Effects of

Advertising.

2-2

Chapter 2 Objectives

Explain the role of competition in free-market

economics

Discuss the functions advertising performs in a

free market

Identify milestones in advertising history

Discuss how the role of advertising has changed

Explore advertising’s past, present, and future impacts

on society

2-3

Many Buyers& Sellers

Economics:Principles of Free-Market Economics

Self-Interest CompleteInformation

Absence ofExternalities

2-4Economics:Functions and Effects of Advertising

Communicate Product Features and Availability

Increase Product Use

Build Value, Brand Preference, & Loyalty

Reduce Overall Sales Cost

Induce Customers to Try Products & Suggest Reuse

Stimulate Product Distribution

Identify & Differentiate Products (Branding)

2-5Economics:Evolution of Advertising

Preindustrial Industrializing Industrial Postindustrial

pre-1800 1800-1900 1900-1980 1980-present

2-6Economics:Evolution of Advertising

Stage Waggons ad from the preindustrial age

2-7Economics:Evolution of Advertising

Preindustrial Industrializing Industrial Postindustrial

pre-1800 1800-1900 1900-1980 1980-present

2-8Economics:Evolution of Advertising

Uneeda Biscuit ad from the industrializing age

2-9Economics:Evolution of Advertising

Preindustrial Industrializing Industrial Postindustrial

pre-1800 1800-1900 1900-1980 1980-present

2-10Economics:Evolution of Advertising

Weavers of Speech ad from the industrial age

2-11Economics:Evolution of Advertising

Preindustrial Industrializing Industrial Postindustrial

pre-1800 1800-1900 1900-1980 1980-present

2-12Economics:Evolution of Advertising

American Legacy Foundation ad from the post-industrial age

[Insert American Legacy Foundation ad (p. 46) here

Position: 1.55” vertical, 3” horiz.

Size: 5.7” wide]

2-13Economics:Top Global Marketers

[Insert Exhibit 2-4 (p. 49) here

Position: 1.55” vertical, 0.5” horiz.

Size: 8” wide]

2-14Society and Ethics:Effects of Advertising

Ethical advertising can . . .

improve standards of living,

inform of availability of products,

imbue products with personality,

help us make personal statements, &

foster the free press & nonprofits.

2-15Society and Ethics:Effects of Advertising

On the other hand, advertising can:

be dangerous if misleading,

promote unhealthy products,

encourage conformity,

glorify conspicuous consumption,

or target vulnerable markets.