Importance of Advertising
Importance of Advertising
Advertising has become an indispensable function in modern business due to cut-throat competition and mass production. It pervades our economic and social life. It helps to disseminate information which is useful to businessmen, consumers and the society in general. Through it one can create an indirect and impersonal link with his prospects easily, quickly and economically. The importance of advertising can be classified into three different heads:
• Importance of Advertising to producers and Traders,
We will precisely deal with Importance of Advertising to producers and traders in this topic. Let us now discuss the Importance of Advertising to Producers and Traders.
Advertising provides various benefits to the producers and traders and it can be summed up under the following head;
Meeting competition: Advertising is an important means for facing competition. By creating brand loyalty, it helps to maintain sales and market share. It supplements personal selling and sales promotion. The importance of Advertising lies in the fact that it creates preference for a particular product opens doors for salesmen and reinforces point of purchase display, thereby reducing the costs of creating and maintaining demand. Dealers prefer to handle well advertised products.
Steady demand: Advertising creates regular demand by smoothening out seasonal and other fluctuations. For instance, advertising is used to emphasize hot and cold uses of coffee to maintain regular sales both during summer and winter. By suggesting new and more frequent uses of product, advertising helps to maintain demand, throughout the year. Steady demand enables regular production.
Higher sales volume: Advertising helps to increase demand, expand markets and enhance sales of existing products. Through repeated advertising, a producer can create new customers and enter new markets. It creates new wants and increases sales. Advertising is an essential technique of mass selling.
Introduction of new product: Advertising is helpful in introducing new products by creating awareness and gaining their acceptance. By informing consumers about the new product, advertising stimulates their interest and persuades them to buy it. Effective advertising helps in overcoming consumers' resistance to new products.
Economies of scale: Advertising facilitates mass distribution of goods. It reduces dependence on middlemen as dealers are more willing to stock and sell well advertised goods. Direct distribution and rapid sales turnover help to reduce costs of distribution. Mass distribution and steady demand lead to large scale and regular production. As a result, several economies of scale become available and cost of production per unit is reduced. Investment in inventories can be reduced.
Goodwill: Advertising helps in creating a good image of the firm and reputation for its products. A favorable image increases the capacity of the firm to survive competition and depression. It is through effective advertising that Tatas, Birlas, etc., have become household names. It has rightly been observed that "doing business without advertising is like winking at a girl in the dark. You know what you are doing but the targets do not know." By building goodwill advertising enables business firms to obtain repeat orders.
Employee morale: By building reputation of the firm, advertising provides a sense of security to employees and improves their morale. Salesmen feel happy as their task becomes easier when the product and its producer are known to customers. In a well reputed firm, executive have a feeling of pride and job satisfaction which is necessary for better performance.
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