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SID:Day 14 – Advertising (A paid form of non-personal communication that is transmitted to a target audience through mass media)**WILL BE APPLICATION NOT DEFINITION• Exposures: presentation of an advertisement to the consumer; attempt to estimate the number of exposures necessary to achieve their objective; The goal of advertising is targeted audience exposure• Reinforcement: 1 of 3 types of competitive adv; assures current users they have made the right choice• Pulsing: a combination; runs steadily but with bursts at certain times• Flighting: runs in spurts; heavy/none; good for seasonal products• Pioneer advertising: Focuses on a product category (EX-Got Milk?, Beef )• Advocacy: Conveys a firm’s position on a public issue (EX- sign that says “we ID” at all stores)• Comparative: 1 of 3 types of competitive adv (points out brands advantages compares to comp); Compares two or more brands on one or more characteristics• Recognition/unaided recall: respondents shown a portion of an ad – or sometimes a memorable image and asked:Do you recognize this ad? (recognition measure)Please type in the sponsor of this ad (unaided recall measure)Please choose the sponsor of this ad from the following list (aided recall)Day 16 - Setting Prices (sections 2 & 3)• Reference pricing: psychological pricing; displaying a moderately priced product next to an expensive one; similar to framing; private label shelvingThe price stored in memory that helps to evaluate the actual priceo Serves as an anchoro Frames the purchase priceInternal Reference Priceo Develops in buyer’s mind through experience with productExternal Reference Priceo A comparison price provided by others• Penetration pricing: for new products; set a relatively low price to drive market share/value perceptions; Designed for high market share (hence penetration); Volume over margin; Discourages competition; Good for elastic products (EX:“call now for….”)• Demand curve: various levels of consumer demand for a product at different prices. high prices, demand is generally low. Moves L  R, the demand curve drops down cus lower prices result in demand for a larger quantity of the product. The point at which the demand curve crosses the supply curve represents the equilibrium price• Substitute products: appears to be different, but can satisfy the same need as another product• Break even: point where the costs of producing a product equal the revenue made from selling the product (fixed costs/per unit contribution to fixed costs --- price minus variable costs)• Non-price competition: emphasizing factors other than price to distinguish a product from competing brands• Odd/even pricing: psychological pricing; ending prices in odd or non-round numbers (2.99); Lots of theories about why this is so common (.95 indicates normal selling price & .50 indicates sale) – price seems lower cus the more specific the price, the more consumers believe it’s the lowest price poss• Selling price: The market value; price at which something is offered for sale • Captive pricing: basic product is priced low, but ancillaries are priced high (printers / ink, cell phones / service contract, xbox / games, razor / cartridges)• Price bundling: offering several products for sale in one “package” (EX- cable/phone/high speed internet, microsoft office); no difference in individual price & bundle but people are bad at retail math – increases sales• Price/Loss leader: selling products at or below cost; Purpose is to stimulate sales of other, profitable products  Stimulates store traffic, promotes habitual buying; Low priced, every day products (milk, eggs, soda)• Price elasticity: when consumers’ buying habits are sensitive to price changes; will buy no matter what the price- will fluctuate with it when the price elasticity of demand is greater than one (EX-durables-washer/dryer)-a change in price causes an opposite change in quantity demanded-if a business raises price and doesn't see a decrease in sales, it indicates that demand is inelastic and customers will be willing to pay an even higher price-if a slight price increase in prices causes sales to decline, demand is highly elastic • Price framing: anchoring price for consumers; frame you into believing you’re getting a better deal (EX-“manufacturer selling retail price” when buying a car, Competitor’s Price, “You save”)• Markup (KNOW HOW TO CALC) vs. Margin: 2 different ways of analyzing the cost and profit of a serviceMarkup = diff b/w cost & selling price (gas stations mark up a lot)Markup = (selling price – cost)/cost x 100When you are deciding how much you want to make on the item and determining the price in which the goods should be sold, you would use markup. Profit Margin = (selling price – cost)/selling price x100When you are looking at the success of your business afterwards and know how much money you took in, you would calculate the profit margin (this is gross profit marginDUANE:E-marketing Types of e-marketing • Search engine Optimization: establishing an online presence for websites• Social Media Marketing: taking over/growing rapidly; garner attention and website traffic• Pay Per Click Advertising (PPC): business only pays for the advertisement when a potential customer clicks on it; display adds based on keywords; highly targeted• Public relations: Getting news releases to be picked up by internet publications  tons of traffic toward company pages• E-mail Marketing: way to enhance the relationship that customers share with a company• Networking: collaboration of business owners that wish to gather leads and referrals from one another in order to produce more activity within their marketplace• Paid advertising: creating a recognizable name for businesses on websites that people use every day in order to get wider exposure and break into the minds of people that have never heard your name beforeIceberg Effect: in many cases only a very small amount of information is available or visible about a situation or phenomenon, whereas the 'real' information or bulk of data is either unavailable or hiddenAKA with social media you only see a little bit of sourcing but the more pages you like and people like of you and etc. the bigger the network actually isSocial Media Influencers (what are they, how do you find them)WHO: highly interactive regular people on


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FSU MAR 3023 - Day 14 – Advertising

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