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LESSON 3:
PURPOSE AND OBJECTIVES OF ADVERTISING,
ADVANTAGES AND DISADVANTAGES
Objective The acid test of any advertising is: did it generate sales or
Students by the end of this session all of you should be in a prospects?
position to evaluate the functions as well as the purpose of This many seem very obvious, but billions, if not trillions, are
advertising. wasted on advertising where there is no way to measure the
results in the “bottom line” (i.e. net profit to the business).
After working for two years in an advertising agency, I can tell
you that you would not believe what goes on. The bulk of the
income to an advertising agency comes from placing the ads on
TV, radio, newspapers, and magazines, not creating them. Thus,
there is no real incentive to have an effective ad. Consider the
cost of a 30-second ad on the Super bowl-it runs into the
millions.
I knew of a highly successful sales manager who rewarded his
good producers and fired the ones who didn’t sell. His system
was simple: every month the salesperson with the lowest sales
was fired. While one may not agree with his methods, it
illustrates how sales forces are run. Produce or you are out!
That same principle should be used to rate the success of
advertising. It should be forced to justify itself. What are the
costs and what are the results? Good salespeople don’t make
excuses, nor should your advertising.
Some advertising is planned with the wrong viewpoint. They
are written to please the seller. The interests of the customer are
forgotten or given less importance. Sales are not likely to occur
when the ad campaign is created to impress the client not to sell
the customer. However, if you are a big-time Madison Avenue
In our last class we have discussed about advertising types. I agency, you can make infinite revenue selling clients on ad
hope it was quiet interesting and all of you have enjoyed that campaigns that are designed to stroke the egos of corporate
session. Tell me have you ever thought why do these organiza- executives.
tion advertise if yes lets discuss and if no them please start One of the dumber statements I read was taken from a recent
thinking as the amount spend by most of the organization is article on advertising: “Customers think that advertising costs a
heavy. lot. So when they see your advertising, it makes them think that
As all of us know that we advertise as we have something to your company must be successful. That’s reassuring to buyers; it
sell and someone may want to buy it. By advertising we make tells them that they’re making the right choice when they buy
our offer known. Advertising links the suppliers and the buyers your product.” Tell that to the dot coms that spent fortunes on
-who in most cases are total strangers. In a nutshell, as Frank advertising but no longer even exist.
Jerkins says, advertising is the means by which we make known As companies weather tough times, new emphasis on Return
what we have to sell or what we want to buy. on Investment has led them to evaluate their marketing and
Before starting the lecture I would like all of you to first go look for opportunities to reduce costs and increase market
through this article on purpose of advertising by Doug Hay: acceptance to enhance their bottom line.
There is high cost to failure. If a salesman makes a mistake, the
The Purpose of Advertising
company loses a sale. However if the advertising is wrong for a
The only purpose of advertising is to make sales.
new product launch, it is a disaster. It is estimated that only
Advertising is viable or unviable according to its actual sales. It
10% of new product ideas ever reach test marketing. 50% of
causes sales or it doesn’t.
new products test marketed fail there and 50% of those
To determine what will become effective advertising, one must survivors fail on national launch-leaving only 2.5% of all new
begin with the right basic premise. All advertising should be product ideas to ever see the light of day. This works out to just
judged by a salesman’s standards. In other words “Show me 1 success story in 64 new product ideas. The average new
the money!” product destined for mass market that fails probably costs
around $50 million.
improves the moral of the sales force. Advertising support informs the consumers about the salient features and availabil-
also supplements their selling efforts. ity of the products.
19. To recruit staff: Advertising is a source of recruitment. It • Advertising gives an image to the products of the
may be a small classified advertisement or a prominent manufacturers. In the market place, really speaking it is not
display advertisement. the products, which compete, but the product images, which
20. To attract investors: Financial advertising has come of compete.
age. There are special agencies who handle this. It makes • Advertising pre-sells the products to distributors and so it is
you favourable towards an investment or a donation. It supportive to a salesman’s visit.
gives the details of returns on this investment or the social • Advertising is an essential part of total promotional mix and
benefits of the donation. Share and securities issues are promotion is an important part of the marketing mix.
floated with sound advertisement support • Advertising makes a psychological impact on the consumers
21. To export: Media abroad are quite different. There are and so gives them greater satisfaction on the use of
trade fairs etc. International advertising requires expert products. People buy not a lip-stick, but the concept of an
guidance. Export advertising without market research and out-going, gorgeous, passionate woman. They also do not
media research can be a costly failure. buy a computer but a solution to their complex problems.
22. To announce trading results: it is also financial Thus what the product really stands for it is made known to
advertising. Extracts of chairman’s speech are published in us through advertising. Charms cigarettes thus stand for
the media. In a way, he is announcing the financial results. freedom.
The speech is well edited and well illustrated. • Advertising affects our attitudes and values. It projects an
Advertisement interacts directly with other- elements of image of self, which we aspire to. Advertising of life-style is
marketing mix. It is basically a communication’s to achieve making our target audience respond to it positively. Who
marketing objectives. It is meant to bring something would not like to be fun loving, outward-oriented, young
socialites sailing in a group on sea, enjoying and Thumps Up
de1iberately to the - notice of someone else - this is the
which is Toofani Thunda?
semantic truth of the word, which comes from the french word
avertir, to notify Nicoll - Advertising is one e1emept of the • Advertisement thus gives all the benefits to manufacturer by
integrated marketing effort. The relative importance of the selling – directly or indirectly. It can create a new demand,
advertising would depend on: types of the products and form stimulate an existing demand, or even destroy a demand.
of marketing Much of its value is drawn from its positive impact on
demand function.
• Advertising makes distribution easier. It also reduces
distributor’s cost. They sell a highly advertised brand at a
lesser price, and so a lesser margin. It builds up repeat sales
for distributors. Remember how Photophone industries
created market for their new product launch: HOT SHOT
camera by an effective advertising campaign. The words
Khatak, Khatak’ and the slogan just aim and shoot’ still
linger in our memory.
• Advertising renders invaluable help in launching new
products. It has been proved time and again. Balearic’s
PROMISE was launched successfully against Colgate’s
monopoly of this market, thanks to imaginative advertising.
Recently. BABOOL has repeated history. Even Vicco
Vajrandnti became established as a herbal product of
‘ayurvedic jadibuti’ and ‘kudrat’s anmol khazana’ by
advertising.
The wholesaler and retailer find it easier to sell an advertised
product. Good Knight Mosquito Repellent Heater and mats
were successfully sold by all retailers, thanks to heavy and
effective commercials and press advertising.
In the above given advertisement try and find out the
specific reason of advertising. • Advertising benefits the customers. They come to know
about the products and product information. They get the
Let us Concentrate on Benefits of Advertising information about the product availability.
It is true that it pays to advertise. Advertising is a constructive • Advertising makes mass distribution possible. Advertising
activity. It helps the manufacturers to keep down the produc- makes the consumers aspire to higher and higher things in
tion costs by giving them economies of scale resulting from life making this life a saga of continuous struggle to acquire
increased sale and hence increased production. It helps them to what we don’t have. It expands the markets.
© Copy Right: Rai University
18 11.311
• Advertising creates markets for new products. It makes us 5. Greater Dealer Interest – The dealers (retailers as well as
them. Salesman when meets the customer, finds a ground discussed earlier that advertising ensures better and
well prepared by the advertising. It makes his task quite easier improved quality of goods to consumers. It also assures the
and simpler. The advertising supplements and supplants his better quality goods at cheaper rates to consumers because –
functioning and makes the work of salesman more i. Mass advertised goods are produced and distributed in large
productive. quantity and thus bring reduction in production and
C. Advertising and Consumers: distribution costs to producer
The ultimate aim of marketing of goods is to satisfy the ii. Unnecessary middlemen are eradicated from the channel of
needs of the ultimate customer. The advertising is a means distribution.
towards this end. Advertising helps the consumers in the 6. Consumers’ surplus – Advertising increases the utility of
following ways : the product. It points out and emphasizes the quality of the
1. A Guiding Force in Making Purchase Decisions – product and leads consumers to appreciate more strongly the
Advertising helps the consumers in taking decisions utility of such goods. As such, the consumers may be willing
regarding the merits and demerits of various products of to pay even more for certain products, which appear to have
the kind, special features like prices, quality etc., of products higher utility to them. If these products are available at
from various producers because advertising disseminates original prices, there will naturally be certain amount of
useful information regarding products of different consumers’ surplus in terms of increased satisfaction or
manufacturers. In this way, it guides the customer to go in pleasure derived from these products.
for a particular product. A number of varieties in the market D. Advertising and Society:
creates confusion in the minds of the consumer and he is to
The merits of advertising to the society can be discussed
make a choice out of them by using the information made
under following heads :
available to his through advertisement.
1. Existence of the press – At the beginning of advertising,
2. Improvement in Quality – Goods are generally advertised
advertisement generally occupied some odd nooks and
under brand names. When an advertisement appears in the
corners in the newspapers. But the present situation is just
brand name, it imprints an image of the product on the
the reverse. Modern civilization is sustained by the press and
mind of the consumer that it would be better than the other
the press is sustained by advertisements. Journals,
brands of the same goods available in the market. If the use
newspapers, magazines, periodicals etc., all look to
of the product advertised confirms his expectation, a repeat
advertisement for their support and sustenance. Now the
order can be expected. It will, thus, earn a favourable and nice
whole press exists only due to the funds generated by the
reputation for the manufacturer resulting in more and more
advertising. The cost of production of newspaper etc. would
attraction of customers. The customer recognizes the goods
have been much higher in the absence of income from
with the brand name as, every brand stands for a quality; it is
advertising.
a mark of value, a symbol of guarantee and reasonable price.
The manufacturer’s, thus prompted to maintain and, if 2. Change in Motivation – Advertising has completely
possible, improve the quality of his brand so that the changed the basis of human motivation. While in the past,
confidence of the customers can be maintained. On the people were much worried about the bare necessities of life
other hand, if the quality of the brand does not confirm to and they lived and worked for them but now the whole
customer’s expectation, brand will lose its market very soon. emphasis has shifted to provide for themselves, the
So advertiser is very sincere in maintaining and improving comforts, luxuries and semi-luxuries. Thus the motive force
the quality of the product. of fear (of going without necessities of life) has been
replaced by desire (to possess more and more newer
3. Elimination of Unnecessary Intermediaries – By
products).
advertising the goods, a manufacturer comes in the direct
touch of the customers. On the basis of improved quality, 3. Better standard of living – Advertising has been an
the manufacturer gets reputation in the market. In this effective tool contributing tremendously in raising the
process, the number of middlemen whose margins increase standard of living of the masses. Advertising creates a desire
the price, are reduced. It benefits manufacturer and of possessing better and newer items through the education
consumers both. On the one hand, it will increase the profits of buyers for better standard of living. Advertising gives a
for the manufacturer and on the other hand, will reduce the start and direct stimuli to consumer, which in turn lays
prices of goods for the consumers. pressure on production not only to produce more but also
to produce better and quality products and services of varied
4. Education of consumers – There is truth in saying that
nature.
advertising is an educational and dynamic principle.
Advertising aims at educating the buyers about new and new 4. Encouragement to research – Advertising encourages
products and their alternative uses. It will, thus, bring in new research and discovery of new products or new uses for
ways of life to the people at large and prompt them to give existing products because it (advertising) assures their
up their old habits and inertia. Advertising, thus, paves the marketing and sufficient profits to manufacturers. If
way to better standard of living. manufacturer is not assured of marketing his new product at