Advertising Importance

Importance of Advertising: For Manufacturers, Middlemen, Consumer and Society

Advertising is an integral part of our economic and social life. As a power­ful technique of promoting sales, it has been doing wonders in the area of distri­bution. The role of advertising can be analyzed from five different angles namely, manufacturers; middleman; sales force; customer and society.

1. Importance of Advertising to Manufacturers:

Every manufacturer and producer, who wants to make available his goods to people at profit, do take full advantage of advertising to popularize their products and services.

The major benefits that are available to manufacturer are:

(a) Increasing Sales: Even the best product cannot be sold on its own, unless people know about the product. In today’s highly sensitive and competitive market, a firm cannot maximize its profit, unless it multiplies its sales turnover. A regular and frequent advertising helps the producer to obtain this objective.

(b) Helps in maintain existing market and explore new market: Every forward looking company eyes on future prospects without losing its current position. A company’s success is reflected by how it maintains its current position and future expansion. Advertising helps the manufacturer, in this regard, to face competition effectively.

(c) Helps to control price of product: Through advertising, it is possible to control price of the product especially in retail market. Very often greedy retailer charge higher price from the customer. The manufacturer can help them by printing the price on the packages.

2. Importance of Advertising for Middlemen:

Middlemen are essential link between producer and consumer.

The benefits which advertising offers to middlemen are:

(a) Quick Sale: Every retailer holds stock of different producer. Advertising, by making the range of products known to customer, helps the retailer to quickly sell its stock.

(b) Act as Salesmen: Advertising has been rightly described as salesmanship in print. Advertising perform task of travelling salesmen at least cost. That is why; most of the retail organizations do not employ large number of travelling salesman. Instead, they spend on advertising, which attracts customers to the shops, where counter salesmen cater to their need.

3. Importance of Advertising for Consumer:

Ultimate aim of all marketing efforts is to satisfy the needs of the customer by providing the goods and services.

Advertising is essential for consumer due to following reasons:

(a) Quick decision making and saves time: In today’s competitive world market is full of different types of product which satisfy needs and want. Every producer claims his product to be superior one. In such situation, advertising helps the consumer in comparing features; price; utility; quality etc. of the product, and select the best.

(b) Better Quality Product at Reasonable Price: Advertising promotes good quality product by printing their image in the minds of consumer. Due to this, bad product goes out of the market. Moreover, it increases competition in the market, which helps consumer in getting the product at reasonable price.

4. Importance of Advertising for Society:

Advertising is not only beneficial for manufacturer; retailer and customer but also for the society.

Various benefits offered by advertising to the society are:

(a) Uplift Standard of Living: Advertising has made it possible for general public to use those products which were luxuries of yesterday. Advertising increases the consumption pattern, it results in more production at least cost, which in turn increases earning of the society and thus, standard of living of the society.

(b) Generates Employment: Advertising generates gainful employment opportunities both directly and indirectly. It directly generates employment painters; artist; photographers; technician etc. Indirectly, it gives employment by supporting all those industries like paper; colour; electronic etc. which supply inputs for the advertising activities.

Importance of Advertising as a Promotional, Marketing and Business Activity

For an organization, advertising is important both as a promotional and as a marketing activity. As a business activity it holds its importance for an economy.

1. As a Promotional Activity:

Advertising could have following effects:

1. To generate awareness for the product.
2. To impart knowledge about product to the customer.
3. To cause the change in attitude.
4. To induce trial behaviour for the product.
5. To have direct purchase action.

Advertising effects differ in different market situations. For a ‘less expensive frequently purchased product’ the use of repetitive advertising may cause trial purchase. In case the trial experience is satisfactory, it is expected to result into final purchase of a product. For routine or habitual kind of purchases like purchase of glucose biscuits, the mere exposure to an advertisement is likely to trigger a direct purchase action.

On the other hand, for the purchase of a product like automobile advertising is primarily used to generate awareness and impart knowledge about the product. Since such decision-making situation requires more of buyer’s deliberations, it is less likely that attitude change occurs due to advertising only. The use of repetitive advertising, however, provides reassurance like in the case of Surf Excel ads and helps in reinforcing the product choice.

2. As a Marketing Activity:

Advertising holds its significance for decisions concerning other promotion tools as well as other marketing decisions concerning product, price, and place. The nature and scope of advertising for a product in turn depends upon the mix of various marketing tools in a given situation.

Product is at the very heart of an advertising programme. A, successful advertising programme requires knowledge about product attributes and a clear notion about its positioning. Packaging, trade mark and various other attributes of product as its taste, colour, texture, aroma, style and design are other essential elements of effective advertising.

The potential of these attributes in affecting product sale is analyzed before incorporating them in the advertising message. Though advertising does not add any intrinsic value to the product, it makes possible selling the product by informing the consumers. Advertising is one of the major parts of brand building exercise.

In case advertising carries a price tag, it helps in comparison between various brands also. Otherwise the media choice, the message content, and its execution for an advertising activity do convey a certain notion about the product price to the consumer. There is a perception about positive relationship between the product price and the level of advertising activity for a product.

Brands with relatively high advertising budget are presumed as charging premium prices and brands that spend less than their competitors on advertising charge lesser price. At each product life cycle stage, the level and the kind of advertising is related to its price strategy. The positive relationship between high relative advertising and price level is supposed to be stronger for products in the later stages of PLC. This is especially found true for market leaders and for low cost products.

The level of advertising exposure is related to distribution objectives and strategies. Product distribution can be intensive or selective or exclusive. Advertising as a mass communication mode facilitates an intensive distribution of product. It works as a pull factor in the market and creates demand for the product. In case of selective or exclusive distribution strategy adopted for the product, advertising is mainly used to provide information about the product availability.

Advertising is often regarded as ‘salesmanship in print which pre-sells the product verbally and makes it comfortable for sales personnel to approach the target audience. Advertising facilitates the implementation of various sales promotion techniques in the market. Quite often, marketers make use of sales promotion tools like gifts, coupons, discounts, etc. to give immediate boost to the declining product sales or to counter the competitive strategy.

Advertising creates awareness about these tools and makes the environment conducive to bring success in terms of increase in product sales. Similarly, for public relation and publicity to be effective in their goals, advertising provides a viable platform to make people aware of such promotional initiatives.

In a nutshell, advertising appears to be one among many marketing activities being taken up to communicate with the customers. An insight into the interdependencies between advertising decisions and those on product design, pricing and dealer’s choice. Thus, the ability of advertising decisions to contribute to the goals of an organization depends on other decisions and also the coordination with these decisions.

The productivity of advertising decisions increases when the quality of decisions in other areas of marketing mix improves. There is some kind of communication which occurs at every phase of marketing and at the end product itself performs the principal and decisive act of communication.

But when advertising is used it generally assumes a dominant position in the overall marketing and promotional strategy of an organization. The actual aim of advertising is therefore not to ‘sell’ but to induce people to try the product or service offered and to prepare them for satisfaction in its use by ‘pre-sampling’ it verbally.

Over the years, advertising industry has witnessed the annual growth of over 15 per cent and it reflects the buoyancy and optimism in Indian economy. The booming stock market, price rationalisation across categories, exploding real estate and entertainment industry has opened up new markets for the advertisers.

Along with Telecom and Auto sectors the growth of advertising industry is driven mainly by advertising for new product categories including Mutual Funds, IPO’s, Aviation and also the increased ad spend for rural markets and the markets with low price points. There is reported an increase of 45.5 per cent in inbound traffic and additional earnings of Rs 8,274 crores in the year 2005 over that in the year 2003.