MKTG 477 1st Edition Lecture 21 Outline of Last Lecture I. Considerations when setting a promotional budgetII. Budget “effects”Outline of Current Lecture I. Budget “effects” continued II. Federal Trade CommissionCurrent LectureMarch 11–Budget “effects” continued - Delayed response – consumers see ads but don’t buy the product immediately (Bad)- Hold over – consumers are able to retain information in memory; do not have to see the ad again before buying the product (Bad)- Decay – in the absence of further promotion, the effects of past promotional dollars (on consumer goodwill, brand name awareness, sales, etc.) will be diminished (Bad)o Number 1 incentive for why advertisers overspend – they are fearful they are not spending enough (which would lead to decay)- Competitor – your competitors’ promotional programs (and the amount of money they’re spending on them) will influence how effective your campaign will be (Bad)- Quality – the effectiveness of your ad program is dependent upon the unique content, presentation, and placement of the promotion – not solely on the dollars spent (Bad)o If your ad is placed properly in the correct medium with the right niche/targeting strategy then it will be successful, not necessarily how much you spend A “good” ad will have greater impact on consumers than will a “bad” adRegulatory Environment – Situation analysis (other forces/trends)What regulatory body is probably most influential in scrutinizing advertising practices (especially deceptive practices)?- Federal Trade Commission o “AT&T to pay $80 million to FTC for consumer refunds in mobile cramming case”Federal Trade Commission (FTC)These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- FTC Act 1914 – established the Federal Trade Commissiono Focused on “competitive injury”- Wheeler-Lea Amendment 1938 – amended the FTC Acto Added “consumer injury” to the FTC’s focus o And, “intent to defraud” did not have to be proven to rule that deceptions had occurred - FTC protectso Consumers (re: fairness and deception) Consumer Protection Division Target groups of fairness - Children- Elderly- Financially disabled Deceptive - Before and after ads- Lean Cuisine ad – “All the things we make, we make sense!”o Businesses (re: competitive practices) Anti-Trust/Competition Division- Determining “deception” 3
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