Reference no: EM131804667

Problem: Discuss the effects of advertising on market share and consumers. Advertising helps marketers increase or maintain brand awareness and, subsequently, market share. Typically, more is spent to advertise new brands with a small market share than to advertise older brands. Brands with a large market share use advertising mainly to maintain their share of the market. Advertising affects consumers' daily lives as well as their purchases. Although advertising can seldom change strongly held consumer attitudes and values, it may transform a consumer's negative attitude toward a product into a positive one. Additionally, when consumers are highly loyal to a brand, they may buy more of that brand when advertising is increased. Last, advertising can also change the importance of a brand's attributes to consumers. By emphasizing different brand attributes, advertisers can change their appeal in response to consumers' changing needs or try to achieve an advantage over competing brands.

Questions: 1. Discuss the reasons why new brands with a smaller market share spend proportionately more on advertising than brands with a larger market share.

2. Form a three-person team. Divide the responsibility for getting newspaper advertisements and menus for several local restaurants. While you are at the restaurants to obtain copies of their menus, observe the atmosphere and interview the manager to determine what he or she believes are the primary reasons people choose to dine there. Pool your information and develop a table comparing the restaurants in terms of convenience of location, value for the money, food variety and quality, atmosphere, and so on. Rank the restaurants in terms of their appeal to college students. Explain the basis of your rankings. What other market segment would be attracted to the restaurants and why? Do the newspaper advertisements emphasize the most effective appeal for a particular restaurant? Explain.