Types of advertising

Advertising can be divided into two broad categories—consumer advertising and trade advertising. Consumer advertising is directed at the public. Trade advertising is directed at wholesalers or distributors who resell to the public. This text focuses on consumer advertising, the form of advertising that is familiar to most people.

Consumer advertising can be further divided into national advertising and local advertising. National advertising is aimed at consumers throughout the entire country. National advertising usually attempts to create awareness among the public of a product or service, or it tries to build loyalty to a product or service. Local advertising is aimed at informing people in a particular area where they can purchase a product or service. Advertising to the public may also take the form of institutional advertising, image advertising, informational advertising, or cooperative advertising.

Institutional advertising seeks to create a favorable impression of a business or institution without trying to sell a specific product. This type of advertising is designed solely to build prestige and public respect. For nonprofit institutions, such advertising helps support the institution’s activities—for example, by encouraging blood donations or cash contributions for the work of an organization like the Red Cross. A for-profit business has other reasons for improving its reputation rather than trying to sell a particular product. In some cases a large company may sell a diversity of products. As a result, there is more value and greater efficiency in building a brand image for the company itself. If consumers learn to have a high regard for the company, then they are more likely to have a favorable opinion of all of the company’s diverse products.

Many advertisers prefer a strategy known as image advertising. These advertisers seek to give a product a personality that is unique, appealing, and appropriate so that the consumer will want to choose it over similar products that might fulfill the same need. The personality is created partly by the product's design and packaging but, more importantly, by the words and pictures the advertisements associate with the product. This personality is known as a brand image. Advertisers believe brand image often leads consumers to select one brand over another or instead of a less expensive generic product. Brand image is especially important for commodities such as detergents, jeans, hamburgers, and soft drinks, because within these product categories there are few, if any, major differences.

Informational advertising seeks to promote an idea or influence behavior. Sometimes known as public service advertising, it may try to discourage young people from using drugs or tobacco, or it may encourage people to adopt healthier lifestyles.

Cooperative advertising is an arrangement between manufacturers and retailers in which manufacturers offer credits to their retail customers for advertising. The credits, or advertising allowances, are based on the amount of product the retailer purchases. For example, if the retailer purchases $100,000 worth of a product from a manufacturer, the manufacturer’s cooperative advertising program may allot a 1-percent credit, or $1,000, toward the cost of purchasing an ad that will feature the product. In addition, some manufacturers will match the amount that the retailer spends, sharing the cost of the ad. In the United States antitrust laws enforced by the Federal Trade Commission (FTC) ensure that these ad allowances are offered on equal and proportionate terms so that large retailers are not unduly favored over small retailers.

Date: 2016-04-22; view: 1155