But there are no conclusive evidences that whether advertising reduces or increases price elasticity of demand. In this era of fierce competition, advertising comes to the assistance of the manufacturer in facing the competition and creat­ing and maintaining the demand for his products. Now there is a global concern about advertising for its role in saving the earth in the wake of deteriorating environment and the need for sustainable products. This builds long term goodwill and reputation for the organization. The largest advertising campaign of Coca-Cola was the 2014 FIFA World Cup campaign, ‘The World’s Cup’ where they featured a series of events like unveiling the photomosaic that they’ve created at the start of the games, to holding the FIFA World Cup Trophy Tour across 90 countries (“Coca-Cola Invites the World to the Opening Match of the 2014 FIFA World Cup™ with Unveil of ‘The Happiness Flag’”, 2014). Increase in production leads to lower cost of production per unit. Why is Online Advertising Important? It ensures repeated demand from the satisfied services provided by a firm. On the contrary, the large scale production reduces the average cost per unit and increase earnings. Advertising as a mass communication mode facilitates an intensive distribution of product. Studies made by the market research firm, Yankelovich in 2007 have shown that an average person would have seen at least 5,000 advertisements in just one day. Finally, you can segment them based on their psychographics. In fact, the customers wait for the visit of salesman to get confirmed about the advertised products. Required fields are marked *. To Educate Customers about New Uses of a Product: Advertising is sometimes, used to convey new uses of an existing product to the customers or to draw their attention to some new features of the product. Advertising helps to popularize a product among the consumers. Advertising also creates mindshare which would eventually be of value to your brand and lead to high brand equity in the long run. So, why is advertising important when this happens? Improved Standard of Living 2. Why advertising is important for business and consumers? While the manufacturers, customers and salesman are the direct beneficiaries, the indirect benefits will be for the whole society. This helps in educating the general public about the benefits of the products. The role of advertising can be analyzed from five different angles namely, manufacturers; middleman; sales force; customer and society. At each product life cycle stage the level and the kind of advertising is related to its price strategy. Advertising promotes consumer satisfaction. Advertisement is an audio – visual mode of communication and hence its impact on the customer is long lasting and people remember the product for a long time. In the end, diversity in ads does lead to a better consumer perception of your brand, and in turn, increases in revenue. Naturally, advertising forms a very important part of marketing for any company, through which they can not only adverse their wares, but also let the world know about their goals, policies, and any changes therein. Some of the benefits enjoyed by customers are: An advertisement gives many information relating to product, firm, nation etc. Advertising affects the sensitivity of product’s demand to changes in its price. Advertising is the action of calling public attention to an offering through paid announcements by an identified sponsor. For an organization, advertising is important both as a promotional and as a marketing activity. It directly generates employment painters; artist; photographers; technician etc. It promotes competition, which is desirable for the growth of a free economy. They are compelled by the recent developments and the cut throat competition resulting into the question of survival. Now there is a global concern about advertising for its role in saving the earth in the wake of deteriorating environment and the need for sustainable products. Advertising makes an appeal to the prospects to buy and use the product. Advertising creates awareness about these tools and makes the environment conducive to bring success in terms of increase in product sales. This enables a producer to improve the quality of his product in comparison to the competitors’ products. Ready to receive – The brand image created by advertising prepares the ground for the visit of salesman. Thus, advertise­ments are also designed to serve as a reminder to existing customers. If the advertisement of any concerned product, service or idea is done correctly at a right place, through proper media, and within a particular time constraint, can attract many new customers. … In case the trial experience is satisfactory, it is expected to result into final purchase of a product. Thus, consumers can make an informed decision and buy a product that suits their preferences. The society benefits in the following ways: Advertisement introduces successfully the new variety of products and convinces about the reasonableness of prices. If for no other reason than that it is an activity that employs several thousands of people, advertising assumes real economic importance. By the end of this article, you will be able to find out more about how advertising affects your business and helps you to achieve your organizational goals. The advertisements not only provide information about products but also some of healthy lips, psychological changes, good behavior etc. Advertisements create awareness about the product. Advertising is to business what steam, electric or nuclear energy (motive power) is to industry. Advertisement induces the current customers to buy the product and aims at retaining the current customers and also attracts new prospective customers towards the product and converts them into loyal customers. 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. 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. Economic impact: One of the most important aspects of advertising is that it It helps firms to enter the market and facilitates the growth of market economic systems based on competition and availability of information. Since advertising is done on a large scale, the demand of the product increases in wider and unexplored markets too. Advertising influences the economic growth of a country. Many modern amenities like refrigerators, motor cars, cameras, radio, vacuum cleaners, and other appliances are sold in mass markets at very reasonable prices —much lower than the prices at which they were initially introduced in the market. Advertising holds its significance for decisions concerning other promotion tools as well as other marketing decisions concerning product, price, and place. By doing so, you will be able to foresee what the customer needs and show it to them before they even realize it. It would be difficult to conceive of a firm that does not attempt to promote its product in some manner or another. It has now entered the areas of politics, social achievements and economic growth. At the same time, advertising also keeps the producers updated about the competing products available in the market. Advertising has gained a significant place in the different areas of society. It has certain ben­efits not only for the manufacturers and traders but for the retailers as well. Therefore, the following benefits accrue to producers: i. Be it whether you are advertising for your start-up or for the company you’re working for, one simply can’t deny that advertising has grown to be an essential aspect of every business. The reason for using celebrities as endorsers is due to their huge potential influence. What is tasteless to one group may be quite informative to another. Both numerically and geographi­cally, the size of the market has greatly increased, making it well-nigh impossible for manufacturers to reach the prospects through sales­manship alone. Instead, they spend on advertising, which attracts customers to the shops, where counter salesmen cater to their need. We can tell numerous people about a product or service in the quickest time interval at the lowest possible cost. A regular and frequent advertising helps the producer to obtain this objective. The above print ad is a great example of the power of typography. An indelible impact can be created by effective advertisement which lays foundation for rushing of a product in any intended market. iv. WHY IS DIGITAL ADVERTISING IMPORTANT Digital advertising creates powerful opportunities to tell brand stories at scale and in context. As a business activity it holds its importance for an economy. Advertising plays a very important role in highlighting the culture of a nation across various nations. Many advertisers carry on advertising to create a brand image or an institutional image of their organization. Advertising helps a business to earn profits by enabling more people to know about the products and services and thus resulting in more sales. Enrol at Equinet Academy where meaningful learning and actual transfer of Digital Marketing knowledge takes place. Thereby it ensures the supply of products of better quality to customers. Some social issues like child labor, liquor consumption, smoking, girl child killing, family planning education, etc. Advertising has become inevitable in the contemporary business environment. It plays an imperative role for both manufacturers and consumers. That is why; most of the retail organizations do not employ large number of travelling salesman. A true adopter in analytics and data-driven campaigns, Roy uses this principle to grow businesses in new customers’ acquisitions and demand generation. As compared to those who cut advertising, it’s proven by a survey of more than 3,000 companies over a five-year period that constant advertising efforts have been proven to increase the sales of companies by an average of 100 percent. Advertising thus prepares the ground work for the salesman to com­plete his sale. Copyright 10. 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Such information increases the knowledge base of customers; who can develop the ability of evolution and analysis. Nowadays, due to intense competition it is not just enough to create awareness, but top of mind awareness is needed. New products are made familiar to consumers through advertising. As advertising enables businesses to reach out to a large amount of audience, more consumers are able to discover the products and services that your company offers while understanding the key features of it within a few minutes or even seconds.