Economic role of Advertising
Value of Products:
The advertised products are not
always the best products in the market. There are some unadvertised products
also present which are good enough. But advertising helps increase value for
the products by showing the positive image of the product which in turn helps
convincing customers to buy it. Advertising educates consumers about the uses
of the products hence increasing its value in minds of the consumers. For e.g.
mobile phones were first considered as necessity but nowadays the cell phones
come with number of features which makes them mode of convenience for
consumers.
Effect on Prices:
Some advertised products do cost
more than unadvertised products but the vice versa is also true. But if there
is more competition in the market for those products, the prices have to come
down, for e.g., canned juices from various brands. Thus some professional like
chartered accountants and doctors are not allowed to advertise.
But some products do not advertise much, and
they don’t need much of it and even their prices are high but they are still
the leaders in market as they have their brand name. e.g., Porsche cars
Effect on consumer demand and choices:
Even if the product is heavily
advertised, it does not mean that the demand or say consumption rates will also
increase. The product has to be different with better quality, and more variety
than others. For E.g., Kellogg’s cornflakes have variety of flavors with
different ranges to offer for different age groups and now also for people who
want to loose weight thus giving consumers different choices to select from.
Effect on business cycle:
Advertising no doubt helps in
employing more number of people. It increases the pay rolls of people working
in this field. It helps collecting more revenues for sellers which they use for
betterment of product and services. But there are some bad effects of
advertisements on business cycle also. Sometimes, consumer may find the foreign
product better than going for the national brand. This will definitely effect
the production which may in turn affect the GDP of the country.
The economic aspects are supported by the
Abundance Principle which says producing more products and services than the
consumption rate which helps firstly keeping consumers informed about the
options they have and secondly helps sellers for playing in healthy and
competitive atmosphere with their self interest.
Social role of Advertising:
There are some positive and some
negative aspects of advertising on the social ground. They are as follows.
Deception in Advertising:
The relation between the buyers
and sellers is maintained if the buyers are satisfied with what they saw in
advertise and what they got after buying that product. If seller shows a false
or deceptive image and an exaggerated image of the product in the
advertisement, then the relation between the seller and buyers can’t be
healthy. These problems can be overcome if the seller keep their ads clean and
displays right image of the product.
The Subliminal Advertising:
Capturing the Minds of the
consumers is the main intention of these ads. The ads are made in such a way
that the consumers don’t even realizes that the ad has made an impact on their
minds and this results in buying the product which they don’t even need. But
“All ads don’t impress all consumers at all times”, because majority of
consumers buy products on basis of the price and needs.
Effect on Our Value System:
The advertisers use puffing
tactics, endorsements from celebrities, and play emotionally, which makes ads
so powerful that the consumers like helpless preys buy those products.
These ads make poor people buy products which
they can’t afford, people picking up bad habits like smoking and drinking, and
buy products just because their favorite actor endorsed that product. This
affects in increased the cost of whole society and loss of values of our own
selves.
Offensiveness:
Some ads are so offensive that
they are not acceptable by the buyers. For example, the ads of denim jeans
showed girls wearing very less clothes and making a sex appeal. These kinds of
ads are irrelevant to the actual product. Btu then there is some ads which are
educative also and now accepted by people. Earlier ads giving information about
birth control pills was considered offensive but now the same ads are
considered educative and important.
But at the last, there are some great positive
aspects which help
- Development
of society and growth of technologies
- Employment
- Gives
choices to buyers with self interest
- Welcomes
healthy competition
- Improving
standard of living.
- Give
information on social, economical and health issues.
