Advertising Essay

1149 words - 5 pages

Advertising is the paid communication of firms and other organizations directed towards consumers and the broad society.TV and radio spots, billboards, paid spaces in the press and other means are used to vehicle key messages about products, brands, brand values, and identities. The typical expected effects are to raise sales, to maintain them over time, and to improve the general image of the firm.Advertising follows logically after listening to consumer requirements, introducing productive conditions, distributing the goods. However, the actual sequence - and emphasis deriving from the diverse sub-cultures - can be quite differentiated.Massive advertising is typical of big oligopolists operating in a large consumer market (e.g. Coca Cola and Pepsi Cola).Impact on behaviours and outcomesMicro levelIt announces the existence of a new good, previously unknown and unnoticed by the general public. It raises awareness and conveys information about new, possibly imported, goods. Sometimes, it make easier to reach the good, e.g. by showing where it can be bought ("point of sales"). Usually a minority relegated to leaflets and billboards, certain advertising visual messages contain reference to the price of the good. Their presence is used to press for a reference price that the consumer will use to compare brands and retailers, if not even a immediate transaction (e.g. by mobile commerce). More radically, it has been argued that advertising revives latent need or even creates new needs, which earlier were not felt. In so doing, advertising tend to raise an entire category of products to higher ranking in terms of perceived needs. Advertising can address specific segments by highlighting a connection between their identity to the product and the brand. Purchasing the goods becomes then a way to re-assure the consumer own aspirational ego (e.g. "I'm a stylish woman, so..."). If this connection is widely known, the good might become a "status symbol" used to send social messages (e.g. a very expensive item "talks" about the wealth of the owner or of the purchaser). n another vein, advertising reinforces a positive attitude and sustains habits in purchasing. Advertising reminds - to the already convinced consumer - the pleasure it brings, so stimulating re-purchasing. It also enlarges the kind of occasions for consuming the good. In so doing, massive advertising of already known firms is an entry barrier for new firms, even if they offer superior quality goods, which are simply disregarded by indifferent consumer.Industry levelThe main impact of advertising is on sale volumes. The second main aim of advertising is to differentiate the products from competitors, reducing the relative degree of substitution, so to sustain a premium-price over them, which in turn guarantee fairly high margins on costs, leading to high profits, provided the quantity sold is large enough to justify the fixed discretionary costs of advertising. More specifically to the industry...

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