Notes

Role Of Advertising To Manufacturers, Consumers, Salesmen And Society

Role Of Advertising – Advertising is an important part of advertiser’s promotion-mix. It is a very cost-effective tool for communicating with large audience. Advertising is used to create brand image and to persuade the customers to buy advertiser’s product. Consumers are also benefitted by advertising as they acquire information and knowledge of new products, price, distribution-outlets and uses etc. Advertising is useful to society as it leads to higher economic growth, increase in standard of living, national-income, exports employment opportunities etc. Advertising is a big aid for salesmen and distributors as they find it easy to convince the prospective buyers for well advertised products. Following are the main Role Of Advertising to different groups viz, manufacturers. consumers, society, distributors and salesmen:

Role Of Advertising

(A) Benetits to Manufacturers

(1) Increase in Sales: Advertising helps in sale of new products and expansion of market for existing products. Through advertising, manufacturers can give knowledge about new products, modification/improvements made in existing products, their uses, superiority over competitors’ products, place of availability of products, price, etc. Advertising helps the manufacturer in searching new customers and new sales-territories.

(2) Creation of Primary and Selective Demand: Advertising helps in creating primary and selective demand for advertised products. Primary-demand refers to creating demand for a particular product for entire industry. Selective demand refers to creation of demand for advertiser’s brand/product. When a product is new in the market, then advertisers concentrate first on creating primary demand to achieve acceptance of product among customers. Then efforts are made to create selective demand by achieving brand preference for advertiser’s product.

(3) Mass Communication: Advertising is the most cost effective method for communicating with large audience. Advertising is a tool of mass communication. It is very suitable for communicating ad-message to large audience. Although its absolute cost is high, but as it contacts a large number of audience, so its per audience cost is low. Thus, it helps the manufacturers in communicating with masses

(4) Lowers Production Cost: Advertising helps the manufacturer in increasing the sale. The manufacturers can produce goods on a large scale. This helps to achieve economies of large scale production, viz. procurement of cheaper and quality raw-material, arranging suitable machinery and technology at lower rates. Moreover large scale production ensures reduction in per unit cost because of better utilisation of fixed expenses. All this helps the manufacturer in reduction of per unit cost of production.

(5) Promotes Brand-Image/Goodwill: Advertising helps the manufacturer to achieve brand-popularity, build brand-image and to promote brand-equity. Sale of goods on national and international-level is possible only through brand-popularity. Brand-popularity further promotes the goodwill of advertiser. Ads have created famous brands like Colgate, Dettol, Lux, Airtel, Nokia, Vicks, Surf, Reebok, Bata, etc.

(6) Helps in Facing Competition: Nowadays, competition has increased to a large extent. Every manufacturer wants to attract new customers, maintain existing customers, increase market share of his product. By improving brand-image, reducing per unit production cost, reducing per unit distribution cost, effective mass-communication, advertising helps to face competition.

(7) Permanent Demand: Advertising helps to maintain demand of the goods throughout the year. Through advertising information about various incentives like discount, free gifts, etc. in off-season periods is passed on to target audience. It helps to stimulate sales even in off season days. So advertising helps to reduce seasonal slumps/fluctuations and maintain steady demand throughout the year.

(8) Easy Availability of Reputed Distributors/Salesmen: It is easy to attract reputed distributors, qualified and experienced salesmen for well-advertised products.

(9) Increase in Morale of Work Force: When the employees of an organisation watch advertisement of their institution, they feel pride and think that they are working in a reputed business house. It helps to promote their job-satisfaction and morale.

(10) Helps in Direct and Internet Marketing: If a manufacturer wants to eliminate channels of distribution and is interested in direct/internet marketing, then advertising is very effective in informing, attracting and persuading the target customers.

(11) Helps in Introducing New Products: If a manufacturer wants to introduce new product in the market, then advertising helps to create awareness and to find market for the new product.

Benefits Of Advertising

(B) Benefits To Consumers

(1) Products Available at Low Prices: Advertising makes mass production possible, which reduces per unit production cost. Advertising also makes mass communication possible which reduces per unit distribution cost. So advertising ensures lower cost of products, hen low prices hence low price.

(2) Benefits of Direct Marketing and Online Marketing: In some cases advertising establishes direct link between manufacturer and consumers. This direct link between manufacturer and consumers helps in promoting direct marketing and online marketing. Now consumers can buy various products directly from manufacturer which helps in elimination of middlemen’s margin. For example: e-shopping, sale through mail has become possible only because of advertising.

(3) Reminds Consumers of Essential Things: Repeated ads remind the consumer for essential things e.g. ad of toothpaste reminds the consumer to clean the teeth twice a day to prevent tooth decay. Similarly repeated ad of pulse polio reminds the audience to take their kids for pulse-polio drops.

Role Of Advertising

(C) Benefits to Distributors and Salesmen

(1) Easy Selling: By advertising, prospective buyers become already aware of the product, its price, method of using, benefits from the product. So retailers and salesmen do not have to spend much time in explaining them the details of product and convincing them to buy the product. It is easier for the distributors and salesmen to sell well-advertised products.

(2) No Need of Advertising by Distributors: The wholesalers and retailers need not spend much on advertising a product which is already well-advertised by manufacturer. It helps in reduction of selling expenses of distributors.

(3) Increase in Sales and Profits: Advrtising ensures quick turnover of stock, more sales, less chances of obsolete stock, hence more profits for retailers, wholesalers and distributors.

(4) Ensures Regular Sales: Well-advertised products can be sold throughout the year. In off season periods, various sales promotion schemes are communicated to target audience through advertising. So advertising helps to reduce seasonal slumps/fluctuations and maintains steady demand throughout the year. Regular sales ensure regular means of livelihood to distributors, salesmen.

(5) Increase in Morale of Sales Force: Sales force feel confident in selling well-advertised products. They get easy entry while making sales calls, can easily achieve sales-targets, sales-quotas for well-advertised products. It ensures higher commission and job-satisfaction to sales force.

(6) Less Price Bargaining: For selling well-established, well-advertised brands, distributors and salesmen will not have to do price-bargaining with customers. In some ads, price of products is depicted in the advertisement. So price-bargaining is avoided.

(7) Selling New Products: Advertising creates primary and selective demand for a new product. Without advertising, it is very difficult for the distributors and salesmen to sell a new product.

Role Of Advertising

(D) Benefits to Society

(1) Increase in Standard of Living: Standard of living means consumption pattern of masses living in an economy. Advertising provides better quality products at cheaper rates; it introduces new products, it creates demand for convenient and luxury goods. All this promotes standard of living.

(2) Increase in Employment: Advertising promotes both direct and indirect employment. In case of direct employment, it provides employment to all those persons who are engaged in preparing and executing advertisements. Advertising creates demand, which requires increased production. This increased production creates more employment opportunities and hence advertising expands indirect employment.

(3) Media Availability at Low Rates: Media earns a large revenue from advertising. The present growth in media has become possible only because of advertising revenue. Now a newspaper is sold for rupee one, it is possible only because newspaper is covering its cost from ad-revenue. Otherwise cost of newspaper would be very high and a common man would not be able to afford newspaper.

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(4) Increase in National Income/Economic Growth: Advertising creates demand, finds markets for new-products, increases propensity to consume among public. All this leads to higher production in the economy, which leads to increase in economic growth of the country and increase in national income.

(5) Increase in Exports: Advertising helps the manufacturer to sell their products in the international markets. When goods are sold in international markets, exports increase resulting in more inflow of foreign exchange in the country.

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