Transcript Role of advertising

ADVERTISING AND BRAND
MANAGEMENT
TOPIC- ROLE OF ADVERTISING IN SOCIAL
AND ECONOMIC DEVELOPMENT OF ECONOMY
SUBMITTED BYNAME
1.Anmol Dawra
ROLL NO.
5103
2.Chandni rani
3.Pallavi Goyal
5139
5111
4.Arshdeep
5243
TOPIC
Economic impacts of
advertising
Social impacts of advertising
Benefits and limitations of
advertising
Is advertising a waste?
INTRODUCTION
ECONOMIC
IMPACTS OF
ADVERTISING
EFFECT ON PRODUCTION COST
VARIOUS ECONOMIES OF SCALE
BETTER UTILISATION OF EXPENSES
AVAILABILITY OF GOOD RAW MATERIAL
AVAILABILITY OF BETTER TECHNOLOGY
EFFECTS ON DISTRIBUTION COST
Reduction of personal selling expenses
Less selling efforts
Lesser personal selling
EFFECT ON PRICES
Reduction of per unit production cost
Per unit selling and distribution cost
Advertiser himself reduces prices
 EFFECT ON DEMAND
 EDUCATING THE AUDIENCE ABOUT THE USES
OF PRODUCTS
 AD CAN HELP IN SHIFTING THE DEMAND
CURVE OF THE PRODUCT
EFFECT ON COMPETITION
Promotes competition
EFFECT ON CONSUMER’S CHOICE
• Provides information
• Comparative study
• Impels the consumer
EFFECT ON BUSINESS CYCLES
HELPS IN REDUCING THE BUSINESS CYCLES
PERIOD OF RECESSION
PERIOD OF BOOM
EFFECT ON NATIONAL INCOME
ADVERTISING
PROMOTES DEMAND
INCREASES PRODUCTIVE AND INDUSTRIAL
ACTIVITIES
PROMOTES GROWTH IN AGRICULTURE
GROWTH IN SERVICE SECTOR
INCREASE IN EXPORTS
EFFECT ON EMPLOYMENT
EFFECT ON PRODUCT QUALITY
PROMOTES COMPETEION
FOR LONG TERM SUCCESS IN BUSINESS GOOD
QUALITY PRODUCTION IS MUST
EFFECT ON STANDARD OF LIVING
PROMOTION OF DEMAND
PRICE REDUCTION
CONSUMER HAS WIDER CHOICE
PERSUADES THE PEOPLE
SOCIAL ASPECTS OF
ADVERTISING
INTRODUCTION
Advertising affects social aspects of people
in both positive and negative ways. It
affects lifestyle, cultural values, standard
living, tastes, likings and preferences, etc.
some advertising appeals badly affect
children and undermine the status of
women and aged persons in society.
Social aspects of advertising
 Untruthful
advertising
 Effect on culture
 Effect on media
 Materialism
 Effect on children
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Stereotyping in advertising
Wrong advertising appeals
Confuses people
Advertising of controversial
products
• Too persuasive
Untruthful/Deceptive advertising
Ads not disclosing material facts about the
product/service.
Such ads are short-lived and illegal under
trade practices of MRTP Act.
Effect on culture
• Culture includes lifestyles, values,
customs, moral values etc.
• It can be within the country and with
other countries also
• It has both negative and positive sides.
Effect on media
 Critics argue that media is controlled by
advertiser .
 Types of media are newspapers , magazine,
tv , etc.
 Newspapers cover its cost through adrevenues.
 Media does not bother about type of ad the
advertiser is given.
Materialism
• Advertising make people buy the things which
they don’t need and cannot afford.
Effect on children
They are unable to assess merits and demerits of the
products .
They insist their parents to purchase the advertised
products.
Stereotyping in advertising
• stereotyping refers to presenting a group of
people in certain roles only.
• Advertising has received criticism for
stereotyping women and aged people.
Wrong advertising appeals
Sex appeal
Fear appeal
Confuses the people
• Ads creates unnecessary differences in brands
while products are not actually different.
Advertising of controversial products
• Ads related to tobacco products , alcohol ,
contraceptives are controversial.
Too persuasive
• Repeated ads control the mind of consumer
and he is not in a posion to think about other
brands.
BENEFITS / IMPORTANCE OR
ROLE OF ADVERTISING
1. BENEFITS TO
MANUFACTURERS
2. BENEFITS TO
CONSUMERS
3. BENEFITS TO
DISTRIBUTORS AND
SALESMAN
4. BENEFITS TO
SOCIETY
 Increase in sales
Mass communication
Lowers production cost
Promotes Brand – Image/ Goodwill
Helps in facing competition
Permanent Demand
Helps in introducing new products
Higher profits
1. Increase in sales
2. Mass communication
3.Lowers production cost
4. Promotes Brand- Image/
Goodwill
5 Helps in facing
competition
6. Permanent demand
7. Helps in introducing
new products
8. Helps in earning higher
profits
Convenience in purchase of products
Advertising adds to the knowledge of
consumers
Products available at low prices
Reminds consumers of essential things
Better quality products
Benefits of direct marketing and online
marketing
1. Convenience in purchase
of product
2. Increase knowledge of
Consumers
3. Product available at low
prices
4. Reminds consumer of
essential things
5. Better quality products
6. Direct marketing and
online marketing
Easy selling
No need of advertising by distributors
Increase in sales and profits
Ensures regular sales
Less price bargaining
Selling new products
1. Easy selling
2. No need of advertising
by distributors
Manufacturer
Salesman
3. Increase in sales and
profits
4. Ensures regular sales
5. Less price bargaining
6. Selling new products
Increase in standard of living
Increase in employment
Increase in national income
Increase in exports
Cultural advancement
Encouragement to research and development
1. Increase in standard of
living
2. Increase in
employment
3. Increase in national
income
4.Increase in exports
5. Cultural advancement
6. Encouragement to
research and development
Unbranded products
Less believable message
Inflexible and rigid
Immediate feedback
Product differentiation
Size of target customers
IS ADVERTISEMENT A
WASTE?
ECONOMIC OBJECTIONS
SOCIAL OBJECTIONS
ECONOMIC
OBJECTIONS
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Increase in cost and price
No Increase in Real Demand
Restricts Entry of New Business Units
Reduces Consumer Choice
Further widens Business cycles
Wastage of National Resources
Creates Monopoly
INCREASE IN COST AND PRICE
Increases Selling and Distribution Expenses
Passed on to consumers and they become
the ultimate Sufferers .
NO INCRESE IN REAL DEMAND
RESTRICTS ENTRY OF NEW
BUSINESS FIRMS
 Huge advertising expenses by existing
firms restrict the entry of new units.
 Brand Popularity of Existing Firms
REDUCES CONSUMER CHOICE
 Repeated Advertisements with
emotional appeals.
 Consumers think of particular
brands only.
FURTHER WIDENS BUSINESS CYCLES
More advertising in boom period
Further increases the sale in boom period
Less advertising in depression periods
Further decreases the sale in depression period
WASTAGE OF NATIONAL
RESOURCES
Advertising is not a productive activity.
It is simply a wastage of resources. It
makes appeal for discarding the
existing goods well before their
economic life.
Creates Monopoly
Advertisement discourages competition and
some bigger firms dominate the whole
market. The existing small business firms
cannot face competition because they
cannot afford huge advertising budgets.
SOCIAL
OBJECTIONS
Mislead consumers by showing Deceptive
Advertisements
Ads distort Culture
Control of advertisers on Media
 Promote Materialism
 Bad Effect on Children
 Undermine the position of Women and Aged persons
Moral Degradation
 Feeling of Insecurity
 Create Artificial Product Differentiation
 Other objections
Mislead Consumers by showing
Deceptive Ads
 False Claims
 Conceal Material Facts
Show only Brighter Side
Ads Distort Culture
Control of Advertisers on
Media
Media gets a major portion of its
revenue from advertising. So, they
readily show all types of ads without
editing the deceptive, vulgar and
indecent portions of ads.
Promote Materialism
Ads lures the viewers to buy
unnecessary things and they start
demanding things which they cant even
afford.
Bad effect on children
Ads show vulgarity and violence which
impact the thinking of children very
badly and they start insisting their
parents to buy the advertised products.
Undermine the position of
women and Aged persons
In advertisements women are mostly shown
as housewives and not in the role of
professionals.
Similarly aged persons are shown as
dependent, sick and helpless. It undermines
their position.
Moral Degradation
Feeling of Insecurity
Advertisements create a feeling of
insecurity in the minds of persons
who cannot afford to buy products.
Create Artificial Product
Differentiation
Other Objections
 Posters, wall writings irritate the owners of
buildings.
 Outdoor advertising using loudspeakers
causes noise pollution.
 Excessive ads in between T.V programmes
irritate the viewers.
 Outdoor ads , signboards, distract the attention
of passerby giving birth to accidents.
IS ADVERTISING
JUSTIFIED??????????