Question

Explain the advantages of advertising.

Answer 1

In the present day scenario, advertising has become increasingly important for business enterprises. Its importance is realised by all firms, middlemen, customers and the society at large. The various advantages of advertising are discussed below:

1. Advantages to manufacturers
   1. Advertising leads to an increase in sales and thereby in profits.
   2. It facilitates the introduction of new products by bringing about its acceptance and quick sale.
   3. It establishes direct contact between manufacturers and customers.
   4. Advertising creates goodwill by making the name of a manufacturer and his product famous and known in public.
   5. It maintains the demand even during the off-season by offering discounts and innovation, e.g., cold coffee.
   6. Advertising increases the demand and thus facilitates large-scale production of goods and services. Hence per unit cost of production falls.
2. Advantages to consumers
   1. It enables the consumers to select the correct brand of commodities which increase their satisfaction.
   2. Through advertising a direct relationship is established between a manufacturer and consumers which is beneficial for both. The consumers know the price, composition, availability of the product in advance of purchasing it.
   3. It helps to improve the standard of living of the consumers by the use of new and improved products.
   4. Advertising facilitates large-scale consumption and production which reduces the cost per unit for the consumer.
   5. Advertising reduces the chances of cheating of consumers as they become well aware. Customers get wider choice.
3. Advantages to society
   1. Advertising creates huge employment opportunities, both directly and indirectly. Directly, it provides employment to a large number of people engaged in designing, writing and issuing advertisements. It facilitates large-scale production of goods and services which provides employment indirectly to a large number of people.
   2. Advertising has helped in raising the standard of living in the society. There is a widespread use of cars, i-pods, colour television, air conditioners, music systems, fully automatic washing machines, home theatres, computers, microwave oven and so on. They have totally changed the life-style of the people.
   3. It promotes healthy competition and hence encourages healthy growth of business, which provides better quality goods at cheap rates to the society.
   4. Advertisements are the main source of income for newspapers and magazines; hence they are available to the masses at a· nominal price.