Discuss in details the roles of advertising Does it just try

Discuss in details the role(s) of advertising. Does it just try to sell products, or are there other intermediate roles?

Solution

Role of Advertising:
I. Manufacturers and Advertising:

Manufacturers and producers, who intend to make available goods to the people at profit, do take full advantage of advertising as a major weapon to popularise their products and services.

The specific benefits that accrue to the manufacturers are:

1. It increases and stabilizes the sales turnover:

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Even the best product cannot be sold on its own, though it is said “good wine needs no bush”. People should know that the product is the best. In a highly sensitive and competitive mechanism, profits of the firm cannot be maximised by mere reducing the costs but by multiplying the sales-turnover.

Advertising does this, by changing the consumer attitude favourably. Further, the sales turnover rate so attained should be maximised and maintained at any rate. Advertising does this by repeat sales. A regular, effective and frequent advertising helps in building more loyal class of customers at all times.

2. It maintains the existing market and explores the new:

A forward looking company always has its eyes on the future business prospects though it cannot lose sight of the current position. A company’s success is reflected not only in creating market but its maintenance and extension.

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It is a natural feeling that when advertising campaign decreases, the products are not measured up to, the consumer expectations. Further, current business situations warrant a forceful entry into new markets. In such newly exposed markets, advertising does spade-work for the sponsor to sow the seeds of prosperity.

3. It controls product prices:

Through advertising, it is possible to control the product prices with profit, particularly the retail prices. Very often the greedy retailers exploit the needy consumers by charging higher prices.

If this consumer exploitation is not bridled, both the producers and consumers are to suffer for no fault of theirs. The manufacturer can help him and help consumers by printing the consumer prices on the product packages. Today, product package protects not only the contents of it but also the consumer interest.

II. Middlemen and Advertising:

In the chain of distribution, middlemen act as the essential links between the producers and the consumers. Their existence is justified by the functions they perform and the services they render.

Here, benefits of advertising are seen from angle of retailer a last link in the chain of distribution:

1. It guarantees quick sales:

Every retailer holding the stocks of different producers is interested in quick turnover. Advertising, by bringing these whole ranges of products to the notice of consumers, quickens the pace of sales.

Faster sales imply the specific advantages such as reduced capital lock-up, loss of stock, and increased profits. Advertising gives him much leeway and freedom to better serve the needs of consumers. Therefore, he earns better by serving better.

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2. It acts as salesman:

Advertising has been rightly described as salesmanship in print. What a travelling salesman does for the selling house is done by advertising at least cost. That is why; most retail organizations do not employ large army of travelling salesmen.

Instead, they are willing to spend on advertising which attracts consumers to the stores where the counter salesmen cater to their needs. In fact, advertising has been heralded as a boon to retailers who are freed from the problems of sales management. In fact, goods are sold in advance by advertising.

3. It makes retail price maintenance possible:

The consumers are very keen on getting quality products at stable price over a longer period of time. Each consumer has his or her own family budget which he or she strives hard to match the expenditure to the disposable income for a socially acceptable decent living.

If the prices go on changing abruptly, those individual budgets are likely to be distorted to such an extent that the consumers have to think of substitutes for the products they are enjoying at present.

The budget tally may involve even the shift in the brand preference. Consumers behave a sigh of relief because; the advertised products publish the retail prices that are likely to be in force at least for three to six months and in some cases over a year.