Advertisements are messages funded by a business or advertiser and broadcast through a mass medium to persuade a target audience to favor a brand, develop a more positive attitude, or intend to make a purchase. Small businesses often have limited budgets for advertising, but the benefits are frequently worthwhile. Positive Advertising aims to influence a person’s behavior by appealing to desirable emotions or outcomes. These advertisement often evoke feelings of happiness, peace or gratitude.
Consciousness
One of the primary initial objectives of advertising is to make the market aware of your existence. No matter how excellent your product or service is, you cannot sell it if no knows about it. An effective and frequently repeated advertisement helps your target audience become more familiar with your brand and ideally recall it when they have a need that your brand can fulfill.
Business Boosts
Advertisements are often designed to generate immediate sales and revenue. Presenting sales promotions through ads is an effective way to quickly drive business. Television and Radio ads can convey your message, while printing advertisements in magazines and newspapers can include sales promotion tools, such as coupons, directly in the ad. New businesses frequently use promotions to build a customer base, but they are also utilized to sell excess inventory and generate cash flow when needed.
Knowledge and Learning
In his January 2011 article “Unappreciated Benefits of Advertising and Commercial Speech” on the Technology Liberation Front Website, Adam Thierer highlights that advertisements can inform and educate consumers. This is particularly true when new brands or products are introduced to the or market or when product complexity necessitates more education. Understanding the value of an advertiser’s brand in relation to their needs helps consumers make more informed decisions.
Read more : Role of Advertising in Marketing
Investment Payoff
From a financial perspective, advertisements should yield a return on investment, according to Dan keen of Break Studios in his April 2010 article “10 Benefits of Advertising”. Since developing and placing advertisements incur costs, companies access the return on investment by measuring increased consumer awareness, improved brand sentiments or direct sales.
Evaluating advertisement results is crucial for companies to ensure a return on investment and to prevent wasteful messaging that fails to achieve the desired outcomes.
Inform the Consumers
Advertising is both educational and dynamic. It introduces customers to new products and their various applications, and also informs them about new uses for existing products.
Improved quality of life
The experience of advanced nations demonstrates that advertising plays a significant role in improving living standards. As Winston Churchill put it, “advertising nourishes the consuming power of men and creates desires for a higher standards of living .” By informing consumers about a wide range of products and their better quality, advertising has greatly contributed to raising living standards in developing economies such as India.
Enhances Salesmanship
Advertising significantly supports the work of a salesman by making customers already familiar with the product being sold. The efforts of a salesman are greatly augmented by advertising. As noted, “selling and advertising are like cup and saucer, hook and eye, or key and lock they complement each other perfectly”.
Increased Job Opportunities
Advertising generates and creates additional job opportunities for a variety of talented individuals, including painters, photographers, singers, cartoonists, musicians, models and professionals working in various advertising agencies.
Growth of Market
It allows the manufacturer to broaden their market reach. It aids in exploring new markets for the product while retaining existing ones. Advertising plays a crucial role in expanding the market for the manufacturer’s products, even reaching customers in distant and remote areas.
Implications of Advertising
Impacts refers to how swiftly and thoroughly the audience receives the message. This is influenced by the consumer’s personal need or interest in the message itself, and the advertising channels used. Advertisements help consumers become aware of new products entering the market. They often highlight a problem and present the advertised product as the solution. This approach assists consumers in identifying their needs and understanding how a specific product can meet those needs.
It is generally believed that advertising lowers production costs. This view is based on the premise that by boosting demand, advertisers can reduce production costs. If advertising increases sales volume, manufacturers can benefit from economies of scale, allowing them to buy in bulk and receive significant quantity discounts from suppliers. These economies of scale also include savings in transportation, plant and personal utilization, and overhead expenses.
Read more : Social aspects and Ethics of Advertising
The common experience is that mass production lowers the real cost of products. Advertising also reduces overhead costs by generating demand. A manufacturer with significant seasonal demand may, through advertising, extend this demand over a longer period. This leads to savings in storage capacity since products are sold over a more extended period, requiring less storage space for shorter times. A larger turnover during the peak season means storage space is used more efficiently, with more production units sharing the overhead costs, thereby reducing production costs.
Advertising on Production Cost
Advertising boosts sales, which in turn necessitates large-scale production, thereby ensuring the benefits of economies of scale. Additionally, advertising expenditures do not form part of production costs, so they do not increase production costs. However, advertising can indirectly reduce production costs if it generates demand up to the level of optimum production capacity.
The relationship between volume, cost, and price is complex, and there is no definitive proof of advertising’s effect on a manufacturer’s production costs. For some, advertising lowers total cost, while for others, it increases them. Advertisers can help reduce per-unit production costs for manufacturers operating below plant capacity, resulting in lower total unit costs with heavy advertising than without it.
Advertising and Monopolies
The relationship between advertising and monopolies is a complex one, with both positive and negative implications. While advertising can be a powerful tool for promoting competition and informing consumers, it can also be used to reinforce monopolies and limit consumer choice.
Positive Impacts of Advertising on Competition:
Increased consumer awareness : Advertising can help consumers become aware of alternative products and services, promoting competition.
Lower Prices : Competition can lead to lower prices for consumers as businesses strive to attract customers.
Negative Impacts of Advertising on Monopolies :
Reinforcement of market dominance : Advertising can help a dominant firm maintain its market position, making it difficult for competitors to enter the market.
Barrier to entry : Advertising can create a barrier to entry for new businesses, as they may need to spend significant amounts on advertising to compete with established firms.
The relationship between advertising and monopolies is influenced by several factors, including:
Market Structure : The level of competition in a market can significantly impact the relationship between advertising and monopolies.
Advertising Regulations : Government regulations can help to prevent monopolies from using advertising to limit competition.
Consumer Behavior : Consumer behavior can also influence the relationship between advertising and monopolies. For example, if consumers are price-sensitive, advertising may be less effective in reinforcing monopolies.
In conclusion, the relationship between advertising and monopolies is complex and multifaceted. While advertising can promote competition and benefit consumers, it can also be used to reinforce monopolies and limit consumer choice. It is important for policymakers to carefully consider the potential implications of advertising on market competition and consumer welfare.
