Everything you need to know about advantages and disadvantages advertising. Advertising is defined as the paid, non-personal form of communication about products or ideas by an identified sponsor through the mass media so as to inform, persuade or influence the behaviour of the target audience.
Advertising is directed to a large number of people and not to one individual. That is why we call it non-personal. Advertising is communication about products or ideas. It may inform us about the features of iPod or new smart phone or spell out the need to have a cancer check-up.
Some of the advantages and disadvantages of advertising are:-
A. Advantages of Advertising – 1. Promotion of Sales 2. Expansion of Production 3. Enhances Goodwill 4. Large Turnover and Huge Profits 5. Information about Different Options and Comparative Prices 6. Creates Employment 7. Higher Standard of Living
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B. Disadvantages of Advertising – 1. Adds to the Cost of Production and Product 2. Leads to Price War 3. Deceptive Advertising 4. Leads to Unequal Competition 5. Creates a Monopolistic Market 6. Promotes Unnecessary Consumption 7. Decline in Moral Values.
Learn about the Advantages and Disadvantages of Advertising
Advantages and Disadvantages of Advertising
Advantages of Advertising:
The advantages of advertising are to be analyzed in terms of its advantages which are as follows:
(i) From Viewpoint of Manufacturers:
A well-advertised product is easier to be sold by the salesman in the market. If a brand is popular and well-known, people respond favourably to the salesman’s efforts. It provides a support to salesmanship, as the audience understands the product and its uses more clearly through the advertisement and the salesman’s effort is reduced to convince the buyers.
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(a) Increase in Sales:
The main object of the manufacturer in advertising his products is to promote the sale of his products. Goods produced on a mass scale are marketed by the method of mass persuasion through advertising.
Repetition of advertisements, the manufacturers are not only able to retain existing markets but are also able to expand the markets both by attracting more people to their products and also by suggesting new uses for them. Advertising is a helping hand to selling.
(b) Supplementing Salesmanship:
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It creates a ground for the efforts of the salesmen. When a salesman meets its prospect, they have just to canvass for a product with which the consumer may already have been familiarised, through advertisements. Therefore, the salesman’s efforts are supplemented and his task is made easier by advertising.
(c) Lower Costs:
Sales turnover and encourage mass production of goods are enhanced by advertising that results in large scale production, average cost of production reduces and results in higher profits. At the same time, when the cost of advertising and selling costs gets distributed over a larger volume of sales, the average cost of selling also lowers down.
(d) Greater Dealer Interest:
Advertising creates demand by which every retailer gets an opportunity to share with others. Hence, the retailers who deal in advertised goods are materially assisted by advertising in the performance of their functions. The retailers have not to bother much about pushing-up the sale of such products. Therefore, they evidence more interest in advertised products.
(e) Quick Turnover and Smaller Inventories:
A highly responsive market is created by well-organised advertisement campaign thereby facilitating quick turnover of the goods. Resulting, in lower inventories in relation to sales and being carried-on by the manufacturers.
(f) Steady Demand:
Seasonal fluctuations on demands for products are smoothened by advertising generally the manufacturers tries to discover and advertise new possible uses of which a seasonal product maybe put. The innovation of cold tea and cold coffee for the use during summer has helped in increasing the demand for these beverages even in that season. The same maybe said for refrigeration.
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(ii) From Viewpoint of Consumers:
(a) Improvement in Quality:
Usually, goods are advertised under brand names. When a person is moved by the advertisement to use the product, they proceeds on the hope that the contents of the particular brand will be better than the other brands of the same goods.
When his experience confirms his expectation, a repeat order can be expected. Or else, the sales may rise very high once but may drop down very low subsequently when the consumer’s confidence in the quality of the product fails.
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(b) Facility of Purchasing:
Purchasing becomes easy for the consumers after advertising. Generally, the re-sale prices (prices at which the goods are to be sold by the retailers) are fixed and advertised. Thus, advertising offers a definite and positive assurance to the consumer that they will not be overcharged for the advertised product. The consumer can make his purchases with utmost ease and confidence.
(c) Consumer’s Surplus:
The utility of given commodities is increased by advertising for many people. It points-out and pays even more for certain products which appear to have higher utility to them. If these products are available at the original lower prices, there will naturally be a certain amount of consumer’s surplus in terms of increased satisfaction or pleasure derived from these products.
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(d) Education of Consumers:
Being an educational and dynamic principle, the prime objective of advertising is to inform and educate the customers about new products, their features, prices and uses. It also convinces them to adopt new ways of life, giving up their old habits and inertia and have a better standard of living.
(iii) From the Viewpoint of Middleman:
(a) Retail Price Maintenance becomes Possible:
The consumers are quite keen on getting quality products at stable prices over a period of time. Each consumer has his or her own family budget where he or she tries hard to match the expenditure to the disposable income for a socially acceptable decent living.
In case the prices go on changing abruptly, these individual budgets are likely to be distorted to such an extent that the consumers will have to think of substitutes for the products they are enjoying at present.
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(b) Acts as a Salesman:
What a travelling salesman does for this organisation is done by the advertising at least cost. This is the reason that most of the retail organisations do not employ large army of travelling salesman, rather they are willing to spend on advertising which attracts consumers to the sores where the counter salesmen cater to their needs.
(c) Ensures Quick Sales:
Every retailer having the stock of different producers needs a quick turnover. By bringing the wide range of these products to the notice of the consumers, advertising boosts up of sales.
Faster sales imply the specific advantages such as reduced capital look-up, reduction in losses of holding stock over longer period, increased profits even by reducing the profit margin per unit. Further, advertising gives much leeway and freedom to better serve the needs of the consumers.
(iv) From the Viewpoint of Society:
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(a) Change in Motivation:
Radically advertising has changed the basis of human motivation. While people of earlier generations lived and worked mainly for bare necessities of life, the modern generation works harder to supply itself with the luxuries and semi-luxuries of life.
(b) Sustaining the Press:
For support and sustenance the newspapers, periodicals, journals, looks for advertisers, press, look to advertisements. In the absence of income from advertising, the newspapers have to be produced at a higher cost and may not be able to keep themselves free from its competitors.
(c) Encouragement to Artists:
Designing artists, writers to do creative work. They earn their living from preparing advertisements.
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(d) Encouragement to Research:
When manufacturers are assured of sufficient profits. They undertake research and discover new products or new uses for existing products. Advertising puts forward this assurance and thereby encouraging industrial research with all its advantages.
(e) Glimpse of National Life:
A glimpse of national life is provided by national life.
Disadvantages of Advertising:
Advertising too have its own limitations. In some case it’s being misused by few people over looking their business interests.
The main weaknesses of advertising are discussed below:
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i. Deferred Revenue Expenditure:
It is a deferred revenue expenditure, as the results are not immediate. As advertising occupies a substantial portion of the total budget of the organisation. Hence, investing a large sum in it does not necessarily yield immediate results thus limiting its utility.
ii. Misrepresentation of Facts:
A major drawback of advertising is misrepresentation of facts regarding products and services. Advertisers usually misrepresent unreal/false benefits of a product and make tall claims to excite people to indulge in actions leading to their benefit, but opposed to consumer’s self-interest.
iii. Consumer’s Deficit:
Advertising creates desires as consumers have low purchasing power. It leads to discontentment. Such discontent is obviously not very desirable from the point of view of society, particularly if it affects a large majority of people. But it is important if it acts as a spur to social change.
iv. Barriers to Entry:
Advertisements promote industrial concentration to a greater or lesser degree. The extent of such concentration may vary with the character of the individual trade, the advertisability of the product and the technical conditions of its production. Although, studies on this subject are not conclusive. The evidence of positive association between advertising and concentration is weaker than can be expected.
v. Wastage of National Resources:
It is objected that advertisement is that it is used to destroy the utility of goods before the end of their normal period of usefulness. Now models of automobiles with nominal improvements are, for example, advertised at such high pressure that the old models have to be discarded long before they become useless, not that merely, the most-advertised products are delicate, fragile, and brittle.
vi. Increased Cost:
It is much debated whether advertising induces additional cost upon a product which the community has to pay. In a sense, it is true since expenses on it form a part of the total cost of the product. But at the same time, it would be unjust to infer that if the advertising costs were cut down the goods would necessarily be cheaper. Advertising is, one of the items of costs but it is a cost which brings savings in its wake on the distribution side.
vii. Product Proliferation:
Critics state that advertising encourages unnecessary product proliferation. As it leads to the multiplication of products that are almost identical, resulting in wastage of resources which could otherwise have been used to produce other products.
viii. Multiplication of Needs:
Advertising compels people to buy things they do not need as it is human instincts, to possess, to be recognized in the society, etc., are provoked by advertiser in order to sell products. At times, various types of appeals are advanced to arouse interest in the product. Sentiments and emotions are played with to gain customers.
Advantages and Disadvantages of Advertising
Benefits of Advertising:
i. Internet Advertising is Huge:
With the growth of information on the Internet has growth the amount of time people spend on it, which has in turn generated a new market for Internet advertising. Some of the wealthiest companies in the world have made sure that they get a piece of the internet marketing pie, and for a good reason.
ii. Internet Advertising is Targeted:
As a company looking for advertising opportunities to a specific market, Internet advertising offers some targeting methods that insure that those who see your ads are the ones most likely to buy. Programmes like Google’s Ad Words and AdSense match up advertisers with content that their target market peruses regularly. Forget the costly machine- gun strategy of newspaper advertisements, Internet advertising is targeted!
iii. Internet Adverting Enables Good Conversion Tracking:
It is impossible to get a good idea of how many people see advertising through traditional means. Tracking the reach of newspaper and television advertisements is difficult. However, Internet advertising allows the advertiser to track the number of impressions an ad gets (how many people see it), and how many visits their business web site gets from particular ads, making it easy to see what kind of conversion rates internet advertisements are getting.
iv. Internet Advertising has a Lower Entry-Level Fees:
If you have a limited budget, Internet advertising can be much more in reach than traditional methods. A small yellow-page ad can cost thousand rupees. However, you can bid for advertisements on Google and Overture on a performance basis. That means that you only get charged when visitors click on the advertisement, and bidding starts at a few rupees pop.
v. Internet Advertising can be Much Cheaper:
Because of the targeted nature of Internet advertising and the ability to track the effectiveness of ads, conversion rates from internet advertising is typically much better than traditional mediums.
vi. Internet Advertising has Greater Range:
One more benefit is that, since the Internet spans the globe, pockets of your target market scattered around the world can all be targeted at once, rather than trying to find different publications, radio stations and television stations that cater to a particular geographical area.
On the whole, Internet advertising can be a great way to get the word out there about your service or product in a cost- effective, efficient way.
Limitations:
i. Measurement problem – It is difficult to measure effectiveness of advertising.
ii. Surfing speed – Due to traffic and technical difficulties users find that the time required to access sites can be long.
iii. Clutters – Too many ads over a short period could result in low registration of the message.
iv. Privacy – Like telephones being misused for telemarketing, Internet is also accused of invading user privacy.
Advantages and Disadvantages of Advertising
Advantages of Advertising:
Advertising is beneficial to manufacturers, traders, consumers and society as a whole:
1. Promotion of Sales:
Advertising helps the producer to increase his sales. A form attempts to increase the demand for its product, either by reducing the price or by inducing buyers to purchase more of its product; even at the constant price. The latter involves the use of sales promotion and hence advertising.
2. Expansion of Production:
Increased demand brought about by advertising has to be met by a corresponding increase in production. In this way, advertising causes production to expand in order to cater to an increased demand.
3. Enhances Goodwill:
Advertising is instrumental in increasing the goodwill of the company (advertises). It introduces the manufacturer and his product to the people. Repeated advertising and better quality of products strengthens manufacturer’s reputation and enhances his goodwill.
4. Large Turnover and Huge Profits:
An increased demand, generated through advertisements can create a larger turnover for the company and eventually resulting in more profits.
5. Information about Different Options and Comparative Prices:
Advertisement keeps the buyers well informed by providing information about the different products and their relative prices. This helps the consumer to take adequate decision regarding the features they want and the amount they want to spend, even before physically going to the shops.
6. Creates Employment Opportunities:
Advertising is capable of providing employment to large section of the society including the professionals like painters, photographers, singers, cartoonist, musicians, models and people working in different advertising agencies.
7. Higher Standard of Living:
Advertisement promotes larger consumption, increased production and greater employment. This further reflects on lower prices, better quality and greater variety of goods to the consumers. Advertising, thus, ensures better and happier living.
Disadvantages of Advertising:
Despite of being regarded as the life-blood of modern business advertising has the following disadvantages:
1. Adds to the Cost of Production and Product:
Advertising increases the cost of the advertised product, as the expenses on advertisement add to the total cost of the product. To mitigate the cost incurred during advertising of the product or the service, the advertiser adds the cost of advertisement to the total price of the product or the service. So, the advertising cost is actually being borne by the consumers.
2. Leads to Price War:
Large scale competitive advertising by prominent competing firms can possibly lead to advertising wars with the consumers being made to pay for it. It leads to a situation of price war and that makes the production activity unduly wasteful. The entire industry has to suffer a setback.
3. Deceptive Advertising:
Sometimes, advertising is used as an instrument of cheating. Unscrupulous firms defraud the consumers by misrepresenting their products through advertising. In order to induce people to purchase their product, firms issue false statements with regard to different virtues of a products; this undermines public confidence in advertising. As a result we have the Advertising Code of Conduct that regulates advertising and ensures commercial honesty.
4. Leads to Unequal Competition:
The producers spend a huge amount of money for the advertisement of their products and services. Small local firms cannot match the big advertising budgets of multinational companies. Therefore, the scales are always tilted in favour of the bigger producers leading to unequal competition.
5. Creates a Monopolistic Market:
Larger firms by virtue of their larger advertising budgets drive the smaller firms out of the market. This leaves the market open to just a few large producers. In this way the bigger firms win competition and monopolize the market.
6. Promotes Unnecessary Consumption:
Advertising promotes the consumption of goods and services which are not even required by the people. Hence it is wastage of national resources.
7. Decline in Moral Values:
In order to attract attention of the people, many times advertisers use indecent, vulgar language and obscene photographs.
All these reasons together justify the statement that “Advertising is Social Waste”, because it does not add any real value to the society.
Advantages and Disadvantages of Advertising – With Criticisms
Advantages of Advertising:
Money spent on advertisement is an investment – This is because it gives rise to many benefits to various. Categories viz., Producers, Middlemen, Consumers and entire society.
The various benefits are as under:
A. Benefits / Advantages to Producers / Manufacturers:
1. Communication of Information to Consumer, i.e., Information about product, price and place from where it can be bought. Latest innovations and arrivals. Changes in product by manufacturer.
2. Brand Building – Advertisement is actually brand building. Advertisement creates brand preference for company’s products. Brand equity is established with the help of advertisement Brand equity refers to over-all strength of a brand in the market and its value to the company owning it.
3. Increase in sales – Old customers are kept tied up with the firm, reminding them about product, again and again through advertising. New customers are created by creating attraction towards product. Demand for new products is created by explaining merits of the product showing superiority over rivals’ products and giving knowledge about new products.
4. Help in facing competition and protecting manufacturer against unfair competition as advertisement creates a brand name.
5. Increase in Profits via increased sales.
6. Creation/Enhancement of Goodwill of Company and Product as clientele increases.
7. Stability in seasonal Demand – Advertisement helps in creating demand over all the seasons by discovering new product and new usage of product. For example, tea is sold in summer, ice-cream in winter due to advertising.
8. No Overstocking due to Quick Sales/turnover by creating high responsive market. Also this results in lower inventories.
9. Economies/Advantages of Large Scale Operation as sales increase.
10. Establishing Direct Relations/Contact between manufacturers and consumers through mass communication of messages about product.
11. Getting Efficient and Experienced Middlemen – Advertisement helps manufacturers in getting a team of efficient and experienced middlemen because increase in demand for a product encourages middlemen to maintain its stock/inventory.
12. Quickening the turnover by creating high responsive market resulting in lower inventory.
13. Advertisement gives employees a sense of practice on their jobs and a feeling to be in the service of a concern of repute. As such, it inspires executives, employees and workers to improve their performance and efficiency.
B. Benefits/Advantages to Middlemen (Wholesalers and Retailers):
1. Convenience in Selling without much effort as advertised goods are already in demand and customers are well convinced about such goods.
2. Increased Sales and Profits due to high demand, easy sale of products, and high rate of turnover.
3. No risk of overstocking as demand is already high.
4. Increase in goodwill as they become known for dealing in standard, quality goods.
5. Economy in selling as their overheads are saved and they need not spend on advertising.
6. Stability in sales and profits due to all-seasons demand through advertising.
7. It enables wholesalers and retailers to have product information.
C. Advantages to Salesmen:
1. Salesmanship is incomplete without advertising.
2. Advertising serves as a forerunner of salesman in selling goods.
3. Salesmen are helped by advertisement in following ways –
i. Selling becomes easy and convenient as products are already advertised informing consumer about product’s characteristics and quality.
ii. Advertising prepares requisite ground for salesman; as such his sales efforts are reduced.
iii. Contact between salesman and customer becomes permanent through effective advertising as customer is assured of quality and price of produce.
iv. Salesman can also weigh advertising effectiveness through direct contacts with customers.
D. Benefits / Advantages to Consumers:
1. Knowledge about New Products.
2. Saving of time and Labour in making purchases as they already know details about product through advertising viz., features, place where available.
3. Advance Decision to buy Consumers are able to take advance decision to buy in the light of advertisement.
4. Protection against cheating by Sellers as advertising message often provides details about weight, packing, price, discounts, special schemes and ‘alerts and warnings’.
5. Knowledge about variety of Products as different producers advertise their products.
6. Knowledge about Alternative Use of Products.
7. Enhancement in Consumers’ Marketing knowledge through advertising about existing products, new products, their different as well as new uses, place and manufacturers where available, other details.
8. Elimination of Middlemen and their costs in cases where direct relation between producer and consumer develops and this reduces consumer price.
9. Helps retailer’s Anticipation of actual sales.
10. Unfair competition and price wars are avoided as prices are controlled by manufacturers through advertisement.
11. Increase in Standard of living as people come to know about new home products, gadgets and appliances which makes their living more comfortable and living standard higher.
E. Advantages/Benefits to Society/Community:
1. Increase in standard of living of citizens.
2. Larger and Handsome Employment opportunities.
3. Development of Advertisement Industry viz., advertising firms / agencies, artists, writers, models, art designing.
4. Boon to Press, that is Newspapers, Magazines etc. as their income increases.
5. Encourages R & D.
6. Encourages Healthy Competition.
7. Educative, providing lot of information to people.
8. Provides new Horizon of knowledge.
The main reason is that advertisement benefits not only different sections of society but also the society as a whole. One can therefore also say that money spent on advertisement is an investment and not a waste.
Criticisms of Advertising:
Despite its various advantages, advertising has not been free from criticisms.
1. Burden upon Consumers:
Media of advertisement being costly, manufacturers have to spend huge amount on advertising. This ad spend adds to cost of production and increases cost per unit and finally the price of the product. Increased prices are a burden on consumer.
This criticism is not fully correct. Advertisement also raises demand for products, increases scale of production, brings economies of large scale production and thus finally decreases cost per unit and hence price.
2. Advertisement Creates Monopoly:
Advertising ultimately blocks other firms from entering an industry (barriers to entry) leading to market power for the firm and ultimately to higher prices. If sheer advertising volume expenditure is directly related to increased sales, small firms cannot afford it. This enables large-scale manufacturer to stay and enjoy monopoly.
However, advertisement also creates healthy competitive market for the products.
3. Advertisement Leads to Consumerism:
Advertising encourages excessive and at times unnecessary expenditure by consumers. Frequent and repeated advertising compels consumers to buy a product even when it does not suit him or is not needed.
4. Advertisement Leads to Luxurious Life:
Advertising luxurious goods is often done in a manner that consumers feel them necessary to buy. Such goods become status symbol. Consequently, people are made to live a luxurious life even when they cannot afford it
However, in so far as advertising offers wide choice in making their purchases, it improves their life style and raises their standard of living.
5. Advertisement is a Wastage:
Money spent on advertising is a wastage if demand for advertised goods and services does not increase.
This is however not necessarily so because very often, advertisement increases demand through wider coverage and new uses of product.
6. Advertisement Leads to Falsehood in Business:
Advertisements often mislead people, and at times exaggerate benefits of products or their attributes.
While it is true that some of the advertisements are untrue and fraudulent, this is not disadvantage of advertisement. Rather it is the advertiser who is to be blamed.
7. Advertisement Gives Birth to Social Evils:
Advertisement often gives birth to social evils like smoking, drinking etc.
Conclusion – While various criticisms are true, measures can be adopted to check these social evils.
Advantages and Disadvantages of Advertising
Advantages of Advertising:
1. Advertising stimulates production, employment and income, leading to rising purchasing power and better living standards.
2. Commercialization of inventions, accelerated public acceptance of innovations, new products, etc., can be realised only due to effective mass communication or advertising. Change is the essence of life. It can be brought about by science and technology but it has to be accepted by the public without much resistance. For quick acceptance of new products and new ideas we need advertising.
3. Informative advertising enables consumers to secure relevant and adequate information about all rival products and their relative merits. Thus, advertising helps consumers to exercise their right to choose and buy a product of service intelligently. We have a wide variety of goods many of them complicated and sophisticated. Hence, wise purchases demand adequate information flow.
4. Advertising facilitates mass production and mass distribution. We have, therefore, lesser unit cost of production as well as lesser unit cost of distribution. Scientific management reduces cost of production. Scientific marketing research ensures reduction in the cost of distribution.
Marketing research can be used to reduce the cost of all components of the marketing mix including advertising. Reduction in costs enables corresponding reduction in prices. Competition in business also ensures price reduction and fair prices. Thus, consumers enjoy all the benefits of effective advertising and marketing. They can have increasing real income also in terms of goods and services.
5. Advertising builds up brand preference and brand loyalty. In the long run these are not possible under keen competition unless the brand quality is maintained and steadily improved by the manufacturer. Thus, consumers can get not only goods at lower prices but also goods of standard quality and quantity.
6. Advertising has educative value also. It teaches us to adopt new ways of life and higher standard of living. It can educate the community to demand quantity of life, e.g., freedom from pollution.
Disadvantages of Advertisement:
1. Loading the Price:
Advertising is expected to reduce total costs due to mass production and mass distribution and ultimately enable consumers to buy at lower prices. Experience proves otherwise. In reality advertising increases the prices of goods.
National brands demand heavy expenditure on advertising and promotion and their prices are higher by about 20 per cent than the prices of dealer brand though products under both brands are manufactured by the same enterprise. There is some element of truth in this criticism. However, it is due to extreme product differentiation resorted to by manufacturers through branding and higher prices are due to element of monopoly.
2. Creating Wastes:
Advertising is wasteful. It can never appeal accurately to the target market like salesmanship. Many people may not read, hear or view your advertisement. Press, radio, and TV advertisements have short life span and relatively costly persuade unit of space or time.
Competitive advertisement is a waste as it enables only reshuffling of customers-one Company stealing customers from another. Measurement of effectiveness of all advertisement statistically is practically impossible. But research in advertising and distribution can enable a company to reduce waste of expenditure in advertising appreciably.
3. Monopoly:
A few firms in an industry do utilise the weapon of advertising to prevent entry of small firms in the market and thus advertising enables creation of monopoly or oligopoly in the market. It kills competition and to that extent consumers’ interest is sacrificed. Only giant manufacturers can afford to spend lavishly on extensive and intensive advertising to retain and even enlarge their market share.
However, if government can effectively control and regulate monopolistic tendencies, we can have reasonable competition in the market. We have to crush monopolies in the world of business to protect consumers against evils of monopolies.
4. Fraud on Consumers:
Some advertising is fraudulent, misleading or deceptive. Advertising causes us to buy goods, we do not want, at prices we cannot pay, and on terms we cannot meet. It is true that hard-sell, high pressure advertising does coerce the innocent and ignorant buyers to purchase many unwanted and shoddy goods. It is true that advertising often persuades people to buy things they should not buy, they do not need nor they can afford.
Public attitude toward advertising as a persuader is constantly unfavourable. This has been proved through opinion polls in the U.S.A in 1960s. Only self-regulation by business firms can ensure truthful advertising. The seller should ensure that his advertisements mean what they say and they say what they really mean. Consumer legislation can also prevent such abuses of advertising. Consumerism through self-help can also safeguard consumer interest against bogus advertising.
Marketing mix based on marketing concept (consumer-oriented marketing approach) can also reduce substantially these abuses of advertising. Marketing research and customer-centred marketing plans and policies can definitely provide judicious and best use of advertising, sales promotion and personal selling in our promotion mix.
Enlightened and scrupulous top marketing management can recognise consumerism not as an obstacle but challenge and primarily through self-regulation streamline the entire marketing process based on the new marketing concept, then only marketing communication complex (promotion mix) can deliver rich dividends and ensure bright public image of business concerns.
Advantages and Disadvantages of Advertising
Advantages of Advertising:
(1) Low cost per contact.
(2) Ability to reach potential visitors where sales staff cannot reach.
(3) Great scope for creative versatility and dramatization of messages.
(4) Ability to create images that sales staff cannot.
(5) Non-threatening nature of non-personal presentation.
(6) Prestige and impressiveness of mass media advertising.
Disadvantages of Advertising:
(1) Inability to close sales.
(2) Advertising clutter or too much competition.
(3) Viewer visitor may ignore advertising messages
(4) Difficulties in getting immediate response and actions.
(5) Difficulties in getting quick feedback and in adjusting messages.
(6) Difficulties in measuring effectiveness.
Advantages and Disadvantages of Advertising – With Objections against Advertising
The importance of advertising is realised on all hands. In fact, advertising has already become such an integral part of our life that we never feel the need of pausing to consider its value and importance. There is no doubt about the fact that in the absence of advertising, our lives would have been lived very differently.
Advantages of Advertising:
Such being the place of advertising in our life, it will be worthwhile to consider some of the important advantages of advertising here:
1. Advantages to Manufacturers:
There is justification in the adage, “it pays to advertise” because of the following advantages of advertising accruing to manufacturers:
(i) Increased Sales:
The chief object of the manufacturer in advertising his products is to promote the sale of his products. Goods produced on a mass scale are marketed by the method of mass persuasion through advertising. By repeating advertisements, the manufactures are not only able to retain existing markets but are also able to expand the markets both by attracting more people to their products as also by suggesting new uses for them. Advertising acts as an aid to selling.
(ii) Steady Demand:
Advertising has led to the smoothening cut of the seasonal fluctuations in demand for many products. The manufactures are generally trying to discover and advertise new possible uses to which a seasonal product may be put. The innovation of cold tea and cold coffee for the use during summer has helped in increasing the demand for these beverages even in that season. The same may be said for refrigeration.
(iii) Quick Turnover and Smaller Inventories:
A well-organised advertisement campaign creates a highly responsive market thereby facilitating quick turnover of the goods. This, in turn, results in lower inventories in relation to sales being carried on by the manufactures.
(iv) Greater Dealer Interest:
The retailers who deal in advertised goods are materially assisted by advertising in the performance of their functions. Advertising creates demand which every retailer gets an opportunity to share with others. The retailers have not to bother much about pushing up the sale of such products. So they evidence more interest in advertised products.
(v) Lower Costs:
Advertising provides a spur to the sale and increases the turnover tremendously. This is advantageous in two ways – on one side, the selling costs including the cost of advertising get spread over a large volume of sales, thus lowering the average cost of selling; while on the other side, higher turnover necessitates higher volume of production, thus lowering the average cost of production per unit.
(vi) Supplementing Salesmanship:
Advertising prepares the necessary ground for the efforts of the salesmen. When a salesman visits a prospect, he has just to canvass for a product with which the consumer may already have been familiarised through advertisements. Thus, the salesman’s efforts are supplemented and his task is made easier by advertising.
(vii) Creation of Goodwill:
By constantly associating the name of the manufacturer with certain standards of quality, advertising builds a fund of goodwill for him. Goodwill thus created is a valuable asset not merely because it enables him to get more and more of repeat orders for his existing products but also for the reason that the manufacturer can introduce new products in the market with confidence. The Godrej concerns have been able to sell the whole range of products ranging from oils to soap and from locks to typewriters mostly on the strength of their goodwill.
(viii) Encouragement to Better Performance:
Advertising gives the employees that feeling of pride in their jobs and the products they produce or help to produce, which is basic to high morale. It can, thus, inspire executives and workers to improved performance. Moreover, an advertiser may have built up a vast fund of goodwill which will serve as assurance of security to the employers. This will also serve to boost up the morale of the men working in the manufacturer’s organisation.
(i) Facility of Purchasing:
Advertising makes purchasing easy for the consumers. Moreover, the resale prices (prices at which the goods are to be sold by the retailers) are generally fixed and advertised. Thus, advertising offers a definite and positive assurance to the consumer that he will not be overcharged for the advertised product. The consumer can make his purchases with utmost ease and confidence.
(ii) Improvement in Quality:
Goods are generally advertised under brand names. When a person is moved by the advertisement to use the product, he proceeds on the hope that the articles of the particular brand will be better than the other brands of the same goods. If his experience confirms his expectation, a repeat order can be expected.
Otherwise, the sales may rise very high once but may drop down very low subsequently when the consumer’s confidence in the quality of the product is shaken. The manufacturer is thus prompted to maintain and, if possible, improve the quality of his brand so that the confidence of the consumers can be maintained.
(iii) Elimination of Unnecessary Intermediaries:
By advertising his goods, a manufacturer may seek to establish direct contacts with the consumers. In this process, the number of middlemen whose profits increase the price and reduce the manufacturer’s margin of profits may be considerably reduced. This will mean large profits for the manufacturer and cheaper products for the consumers.
(iv) Education of Consumers:
There is considerable truth in Sir William Leverhulm’s remark that advertising is an educational and dynamic principle. Advertising aims at educating the buyers about new products and their diverse uses. In this process, it introduces new ways of life to the people at large and prompts them to give up their old habits and inertia. Advertising thus paves the way to better standards of living.
(v) Consumer’s Surplus:
Advertising increases the utility of given commodities for many people. It points out and emphasizes the qualities possessed by certain goods and leads consumers to appreciate more strongly the utility of such goods. As a result, the consumers may be willing to pay even more for certain products which appear to have higher utility to them.
If these products are available at the original lower prices, there will naturally be a certain amount of consumer’s surplus in terms of increased satisfaction or pleasure derived from these products.
(i) Sustaining the Press:
When advertising made its beginning, advertisements generally occupied some odd nooks and corners in the newspapers. The present situation is just the reverse. The newspapers, periodicals, journals, nay the whole press, look to advertisements for support and sustenance.
In the absence of income from advertising, the newspapers have to be produced at a higher cost and may not be able to keep themselves free from party pulls and pressures from business lords.
(ii) Encouragement to Research:
The manufacturers will undertake research and discover new products or new uses for existing products only when they are assured of sufficient profits. Advertising provides this assurance and thus encourages industrial research with all its advantages.
(iii) Change in Motivation:
Advertising has radically changed the basis of human motivation. While people of earlier generations lived and worked mainly for bare necessities of life, the modern generation works harder to supply itself with the luxuries and semi-luxuries of life.
Advertising has brought to the notice of the masses numerous products which are more than mere necessities and has created in their minds a desire to possess them. Thus, the motive force of fear (or going without the bare essentials of life) has been replaced by desire (for more and newer products).
(iv) Higher Standards of Living:
Advertising leads to a rise in the standards of living, not only through the education of the buyers but also through greater consumption, increased production and a larger volume of employment.
(v) Encouragement to Artists:
Men of talent, including artists, story writers, announcers, etc., get an opportunity to do some creative work while earning their livelihood through the designing of advertisements and the use of ideas in advertising various products.
(vi) Glimpse of National Life:
Advertising does provide a glimpse of a country’s way of life. It is, in fact, a running commentary on the way the people live and behave and is also an indicator of some of the future trends in this regard.
Objections against Advertising:
Advertising has also been subjected to a number of objections mainly because it has been misused by some people to serve their own ends, overlooking the business interests. An examination of some of the forceful objections will be of interest.
(i) Multiplication of Needs.
It is said that advertising compels people to buy things they do not need. Human instincts, like desire to possess, to be recognised in the society, etc., are provoked in order to sell products. Sometimes, various types of appeals are advanced to arouse interest in the product. Sentiments and emotions are played with to gain customers. To say this would not however, be correct inasmuch as advertising cannot force anybody to buy a thing which he considers unnecessary.
(ii) Misrepresentation of Facts:
Through misrepresentation of the benefit a product will give, goods of no real value are sold. Tall claims are made by the advertisers to tempt people to take such actions as go purely to their advantage and cause tremendous loss to the consumer. Even adulterated food and medicines are marketed, which by no stretch of imagination can benefit anybody.
By sheer exaggeration of facts, demand for the merchandise advertised is created without much difficulty even when the commodities carrying greater worth or satisfaction are already there in the market. Such unscrupulous actions of a few tell upon public confidence in advertising.
(iii) Consumers’ Deficit:
While advertising leads to increased satisfaction from commodities already in use, it also creates discontent in the minds of many people who are tempted to purchase some commodities but are not able to do so because of insufficient purchasing power. Such discontent is obviously not very desirable from the point of view of society, particularly if it affects a large majority of people. But it is important if it acts as a spin to social change.
(iv) Wastage of National Resources:
A more serious objection against advertising is that it is used to destroy the utility of goods before the end of their normal period of usefulness. New models of automobiles with nominal improvements are, for instance, advertised at such high pressure that the old models have to be discarded long before they become useless.
Not that merely, the most-advertised products are delicate, fragile and brittle. In the U.S A., there is evidence of a marked decline in the quality and durability of cars, furniture, rugs, television sets, refrigerators, etc. That appears to be the way in which the increased demand created through advertising can be sustained.
The same is true of dresses, furniture and other products. From the point of view of the community it is a waste of resources. The natural resources, capital equipment and labour energy which go into the production of new items to take the place of the discarded ones amount to waste when measured in terms of social well-being.
(v) Increased Cost:
There is a great deal of controversy as to whether advertising leads to increase in the cost which the community has to pay for a product. In a sense it is true since expenses on it form a part of the total cost of the product. But at the same time it would be wrong to infer that if the advertising costs were cut down the goods would necessarily be cheaper.
Advertising is, no doubt, one of the items of costs but it is a cost which brings savings in its wake on the distribution side. On manufacturing side, it is one of the factors that make large-scale production possible and anyone would agree that large-scale production leads to lower costs.
It is quite usual for the small non-advertiser retailer to say, “We don’t advertise—we put the cost of advertising into the goods.” But it is often nothing more than an attempt to justify his “side street location, the quality of his goods and his high price.” In fact, if comparisons are made between advertisers and non-advertisers, it will usually be found that the merchants who advertise have larger stores and lower prices than those who do not advertise.
Sears, Roebuck and Co., is one of the heaviest advertisers of the U.S.A. spending over $16 million a year for newspaper advertising alone and, in addition, $30 million or more on other forms of advertising including catalogues. In spite of such a heavy expense on advertisement, the Company is known for its low prices.
In fact the history of American business is full of examples of such industries as have lowered prices and supplied better quality while spending millions of dollars for advertising. This has been possible because advertising has raised the volume of their sales tremendously thus bringing about a number of economies in production and selling.
(vi) The ‘Monopoly Argument’:
An objection which is most commonly raised against advertising is that it tends to develop monopolies. As it is, most advertising is devoted to the promotion of branded merchandise. The manufacturer usually chooses a particular brand name or trade mark for his product and uses advertising to create an impression on the mind of the consumer that his brand or product is superior to all other brands.
Through constant repetition of the brand name and its qualities, the manufacturers may ultimately succeed in creating the desired ‘brand image’ in the mind of the prospect. Although the particular ‘brand’ may be similar to another brand in all respects including physical construction, yet the similarity is concealed from the public by the use of an exclusive name and illusion is created that it is superior to the competing brands.
This gives rise to a ‘brand monopoly’. On reflection, however, it will be found that this kind of monopoly will be based upon a control of human attitudes, and it will not give the manufacturer a monopolistic control over the supply of goods or services which are similar in everything but name.
Besides, brand monopoly created through large-scale advertising will provide only slight power to increase prices. The moment prices are increased substantially in the wake of a brand monopoly; rival companies may rush into the market with lower-priced product and may use extensive advertising to push its sales. This may be followed, in course of time, by a shift of choice on the part of the consumers.
A brand monopoly secured through expenditure on advertising does not necessarily give the manufacturer an effective monopoly of particular industry. The Golden Tobacco Company has a monopoly of Panama brand of cigarettes but not of the whole cigarette industry.
Even in those cases, where the popularity of a brand places the manufacturer in a position of near- monopoly, the competitors generally use advertising to break his hold on consumers’ attitudes secured through advertising.
It may be concluded that advertising can create temporary brand monopolies which are abolished through competitive advertising -by other manufacturers. Even these short-lived monopolies are more useful for increasing sales than for increasing prices and profit margins. As Heppner aptly points out, “Advertising stimulates competition. It often enables the small businessman to compete with large concerns as well as to start new business.”
Though one cannot entirely turn one’s face away from the objections which are raised against advertising, it is clear that much of the criticism is either ill-founded or exaggerated. Fundamentally most of the drawbacks attributed to advertising are inherent in the competitive system of economy.
The social wastage involved in the struggle for more markets as between brands of a product is, for example, a basic feature of the competitive market economy. As Sandage puts it, “As a competitive tool, advertising is perhaps less costly than many other tools which will be used to a greater degree if advertising were banned.”
He obviously refers to the personal selling and the giving of greater dealer’s margins to the retailers which might be used in place of advertising. Either of them would be costlier for the society.
Advantages and Disadvantages of Advertising – As a Promotional Tool
Strengths of Advertising:
Advertising is a major promotion tool.
It has the following basic plus points or strengths as a promotion tool:
(1) It offers planned and controlled message.
(2) It can contact and influence numerous people simultaneously, quickly, and at a low cost per prospect. Hence, it is called mass means of communication.
(3) It has the ability to deliver messages to audiences with particular demographic and socio-economic features.
(4) It can deliver the same message consistently in a variety of contexts.
(5) It can reach prospects that cannot be approached by salesmen, e.g., top executives.
(6) It helps to pre-sell goods and pull the buyers to retailers.
(7) It offers a wide choice of channels for transmission of messages such as visual, aural, aural and visual.
(8) It is very useful to create maximum interest and offer adequate knowledge of the new product when the innovation is being introduced in the market.
Weaknesses of Advertising:
Advertising as a promotion tool has the following weaknesses:
(1) It is much less effective than personal selling and sales promotion at later stages in the buying process, e.g., in convincing and securing action.
(2) It is less flexible than personal communication. It cannot answer objections raised by prospects.
(3) It is essentially one-way means of communication. It cannot obtain quick and accurate feedback in order to evaluate message effectiveness. In absence of feedback, personal salesmen becomes necessary.
(4) It is most efficient communication (very low cost persuasion prospect) but it is least effective as a tool of communication.
(5) It is unable to reach prospects when they are in a buying mood. Hence, we have to repeat advertisements and repetition involves additional cost.
(6) Advertising media, e.g., newspapers, magazines, carry many messages competing to secure attention of audience simultaneously. Thus, it creates noise in communication.
(7) Advertising, many a time, lacks credibility and trustworthiness.
Many of the aforesaid weaknesses can be eliminated by other elements of promotion when they are combined with advertising.