Chapter 5 Economic and social aspects of advertising

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 • • • 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 • • Benefit to manufacturers Benefits to consumers Benefits to distributors and salesmen Benefits to society

• • • 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 • • 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 • • 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 • • 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 • • • 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