Download Chapter = 5

Chapter = 5
Economic and social
aspects of advertising
Economic aspects of advertising
• Effect on production cost , distribution cost and
prices
• Effect on demand
• Effect on competition
• Effect on consumer choice
• Effect on business cycles
• Effect on national income
• Creation of utility
• Effect on employment
• Effect on product quality
• Effect on standard of living
Social aspects of advertising
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Untruthful advertising
Effect on culture
Effect on media
Materialism
Effect on children
Stereotyping in advertising
Wrong advertising appeal
Advertising on controversial products
Too persuasive
Confuses the people
Benefits of advertising
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Benefit to manufacturers
Benefits to consumers
Benefits to distributors and salesmen
Benefits to society
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Benefits to manufacturers
Increase in sales
Creation of primary and secondary demand
Mass communication
Lowers production cost
Promotes brand image
Helps in facing competition
Permanent demand
Easy availability of reputed salesmen
Increase in morale of work force
Helps in direct and internet marketing
Helps in introducing new products
Higher profits
Benefits to consumers
• Convenience in purchase of products
• Advertising adds to the knowledge of
consumers
• Products available at lower prices
• Benefits of direct marketing and online
marketing
• Reminds consumers of essential things
• Better quality products
Benefits to distributors
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Easy selling
No need of advertising by distributors
Increase in sales and profits
Ensures regular sales
Increase in morale of sales force
Less price bargaining
Selling new products
Benefits to society
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Increase in standard of living
Increase in employment
Media availability at low rates
Increase in national income
Increase in exports
Cultural advancements
Encouragement to research and development
Is advertising 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
Reduce consumer choices
Further widens business cycles
Wastage of national resources
Creates monopoly
Social objections
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Mislead consumers by showing deceptive ads
Ads distort culture
Control of advertisement on media
Promotes materialism
Bad effect on children
Undermine the position of women and children
Moral degradation
Feeling of insecurity
Creates artificial product differentiation
Other objections
Advertising justified