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Friday, October 17, 2014

1st Year Principles of Commerce Notes Ch# 06

Importance of Advertising

DEFINITION

“Advertising is an art of providing market information through the various media of communication such as magazines, newspapers, television, radio etc. at the expense of the company for the purpose of increasing or maintaining effective demand and making easy the sale specific goods and services.”
PURPOSE OF ADVERTISING

The purpose of advertising is:

1) to enable the public to know the features and uses of the products and overcome traditions and prejudice that may reduce competition.

2) to make easy and increase the sale of present products, to maintain consumer’s awareness, to bring it equal with advertisement of competing firms and to reduce the amount of personal sales efforts required to receive an order.

3) to introduce a new product model of service in the market.


MEDIA OF ADVERTISING

Media means the source in which the advertisement appears. It is a singular as well as plural term. Various types of advertising media are explained as under:-


A. RADIO

Today radio has become very important and can be utilized for advertising the goods which are sold either within the country or all. Today’s commercial services of radio Pakistan are becoming very popular day by day .but life of this advertisement is very short .


B. MAGAZINES

Magazines can be used for the products which are sold out all over the country .this type of advertisement is not flexible as changes cannot be made in the advertisement copy easily it is becomes the copy of the advertisement is to be submitted to the advertising company 4 to 5 weeks earlier.


C. NEWSPAPERS

These newspapers which are daily or weekly are used for advertising the goods of local businessman . a newspaper has a very short life as it is destroyed usually after a period of 24 hours .


D. MEAN SIGNS

It means advertisement through bulbs . this type of advertisement media is becoming popular day by day in big cities of Pakistan like Karachi ,Lahore and Rawalpindi.


E. ADVERTISING BY POST

Small firms advertise their products through letters ,postcards ,catalogue etc.


F. ADVERTISING BY TELEVISION This type of advertisement delivered through a television is a combination of spoken words and visual presentation of products and their benefits .


G. DIRECT MAIL

It is widely used and includes postcards ,letters, catalogues, folders, booklets etc. they have variability of coverage .large and small business both can use it. basis of this kind of advertising is mailing list .this list which has the names of the persons to whom the letters are sent is compiled from time to time from many sources . It needs utmost care and up to datedness. This list can be made extremely selective regarding geographical and consumer interest .It is costly because of printing. Postage ,typing and packing.


H. CAR CARDS

They are used in street cars , buses , subways and rail road cars where they may be seen by people on the way to shopping trips etc. They are effective for all i.e national ,regional and local advertising .They are flexible and reached the people to whom the magazines don’t reach.


I. PACKAGES ,LABELS AND INSERTS

Advertising copy on package must be brief and should have pictures and brand name , qualities , companies name etc. Some are bottles and some are board packages.


J. WINDOW DRESSING

Usually big shop decorates there windows of shop so as to attract customers. This is also one of the media of advertising. The window is dressed in such a way that it may attract attention of the buyers.

K. SAMPLING

Some firms distribute there products free of cost so as to advertise its product to secure sales volume in future.

ADVANTAGES OF ADVERTISING

1. It creates demand for a new article by arousing interest of the public.

2. It increase the sales volume of establish articles constantly keeping the selling points afresh in minds of the customer.

3. It educates the general public about new use or uses of a product.

4. It reduces competition.

5. It creates goodwill by continues reminder to the public about the trademarks etc.

6. It increases additional sales by encouraging present customers in using the articles more frequently and in increased quantities.

7. It facilitates the job of the salesman and dealers by introduction the products to the public.

8. It reduces prices as the production volume increases, which in turn reduces the overhead expense.

9. It insures better quality, improving the quality of goods to have better appeals to the customer.

10. It increases the employment because production increases.


DISADVANTAGES OF ADVERTISING

1. It results sometimes in exaggeration ( over-valuation) and misrepresentation. Such advertisement misleads the public and loses the confidence of the public in the enterprises.

2. It expands the market for the articles of luxury and comfort, because the goods which are needed to meet primary needs of life are not usually advertised.

3. It causes economic loss due to rapid changes in style creation of new objects of consumption and changes in style are waste and determinate to human good.

4. Advertising is impersonal and cannot answer the question asked for by the buyers.

5. It results in monopoly through brands.


IS ADVERTISING A WASTE?

It is not a waste at all. It is an aid to business expansion. Advertisement help buyers who usually do not know or are really aware of the existence of the seller. It expands the sellers market by spreading information about the product. Some people say the advertising increase the cost of production which is to be borne by the customer. It is completely wrong. It creates new demands of commodities and the service which lead t a production on large scale and when the production increases the cost of advertising is not waste but brings gain in the business.


DIFFERENCE BETWEEN ADVERTISEMENT AND PUBLICITY

ADVERTISING

1. Some definite message is communicated.

2. It is paid form of publicity.

3. It is non personal.

4. Its sponsor is known.


PUBLICITY

1. It is generally done in form of news, articles, features written in newspaper.

2. No direct payment is involved.

3. It may be personal.

4. Its sponsor is not always known.

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