Hierarchy-Of-Effects Theory

DEFINITION of 'Hierarchy-Of-Effects Theory'

A hierarchical representation of how advertising influences a consumer's decision to purchase or not purchase a product or service over time. The hierarchy-of-effects theory is used to set up a structured series of advertising message objectives for a particular product, with the goal of building upon each successive objective until a sale is ultimately made.

The objectives of a campaign are (in order of delivery): awareness, knowledge, liking, preference, conviction and purchase.

BREAKING DOWN 'Hierarchy-Of-Effects Theory'

The hierarchy-of-effects theory is an advanced advertising strategy in that it approaches the sale of a good through well-developed, persuasive advertising messages designed to build brand awareness over time. While an immediate purchase would be preferred, companies using this strategy expect consumers to need a longer decision-making process.

RELATED TERMS
  1. Green Marketing

    Marketing products and services based on environmental factors ...
  2. Marketing Mix

    Usually referring to E. Jerome McCarthy's 4 P classification ...
  3. Word-Of-Mouth Marketing - WOM Marketing

    When a consumer's interest for a company's product or service ...
  4. Viral Marketing

    Internet advertising or marketing that spreads exponentially ...
  5. Marketing

    The activities of a company associated with buying and selling ...
  6. Tight Monetary Policy

    A course of action undertaken by the Federal Reserve to constrict ...
Related Articles
  1. Professionals

    Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.
  2. Professionals

    How To Target Ideal Customers

    Expand your definition of a lucrative client and uncover a new realm of possibilities.
  3. Entrepreneurship

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  4. Professionals

    The Lucrative World Of Third-Party Marketing

    Hedge funds don't sell themselves. Marketing experts reel in the big fish.
  5. Investing

    3 Healthy Financial Habits for 2016

    ”Winning” investors don't just set it and forget it. They consistently take steps to adapt their investment plan in the face of changing markets.
  6. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  7. Economics

    The Truth about Productivity

    Why has labor market productivity slowed sharply around the world in recent years? One of the greatest economic mysteries out there.
  8. Economics

    The Oscars and Golden Globes: Worth Their Weight In Gold!

    The Oscars and Golden Globes set off a wave of spending that creates new flows of funds in the economy and has major financial impact.
  9. Entrepreneurship

    Multilevel Marketing Isn't Always A Scam, But It Often Is

    Nerium and Amway are popular direct sales companies that recruit new buyers and sellers to make a profit. Sadly, many direct sales firms are scams.
  10. Term

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
RELATED FAQS
  1. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  2. What is the difference between positive and normative economics?

    Positive economics is objective and fact based, while normative economics is subjective and value based. Positive economic ... Read Full Answer >>
  3. Is a financial advisor allowed to pay a referral fee?

    A financial advisor is allowed to pay a referral fee to a third party for soliciting clients. However, the Securities and ... Read Full Answer >>
  4. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
  5. How does a long tail become profitable?

    A long tail becomes profitable because the costs to produce, market and distribute a product or service in a niche are low, ... Read Full Answer >>
  6. How do companies with a large product portfolio use BCG Analysis?

    BCG analysis is used to evaluate an organization's product portfolio in sales planning and marketing. It is specifically ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center