by
Amrut Desai , former Managing Director & Country Manager India & SriLanka , Hohenstein India Pvt Ltd-fully owned by Hohenstein Institute GmbH Germany
Measuring the causal effect of advertising on sales is a difficult problem. Despite the economic importance of the advertising industry, the causal effects of advertising on sales have been extremely difficult to quantify.
Advertising is defined “ as a paid form of non-personal communication which co-ordinates all seller initiated efforts to inform and persuade in order to facilitate the sales and acceptance of products and services or ideas ”.
Advertising is the method used by companies for creating awareness of their products, as well as making new products known to the new and potential consumers.
Advertisers tend to choose the optimal level of advertising as a function of Sales.
It should be noted that for any promotional activity to be called advertisement it must be paid for not only by the sponsors but by way of its positive impact on the sales volume generation.
Advertising as a promotional tool also tends to remind, reassure and influence the decisions of the consumers because an advertisement itself enlightens, educates, and persuades consumers on their acceptability of the product offering.
However, it is often very difficult to have a regular and consistent increase in the sales volume of a product because of the political and socio-economic stability or the lack of it in a given country which directly affect the standard of living and the purchasing power of the consumers.
The market is such that consumer tastes are increasingly differentiated and maintenance of high service quality in the face of rising cost of essential factors, like reducing product life cycle, increasing input costs, reduced margins, increasing competition ete is needed. Advertising alone will not decide on the generation of sales volumes.
The role of the competition plays an important role as well. The market is also characterized by a multiplicity of advertisements. Advertising of various competing brands in the chosen segments is increasing very rapidly and consumers are now more knowledgeable. It has become necessary for any supplying company to continue to informing and reminding its customers on how its brand services are different and superior from the others in the market.
More importantly the product and its quality plays a very significant role. Product can represent anything a consumer acquires or might acquire to meet a perceived need. Some product might not satisfy their needs. ‘Despite a perfect advertising campaign in place, the product may not sell sufficient volumes because of the aspects of the product offering not meeting the buyer’s needs.
The ultimate function of advertisement is to help produce sales. This is the feedback expected from the consumer. Advertisement cannot lay absolute claim to sales, since it is equally the goal of other promotional tools, such as sales promotion, personal selling, etc along with the important aspects like product quality, ease of availability, product performance. Packaging and offering of the product, product positioning, the needs of the consumers, competition and their parallel offering, socio-political environment, standard of living vis a vis product offering, easy availability of after sales service and proven track record of consistency of high quality service or the lack of it , demand and supply situation etc.
Most tend to equal marketing with advertising, never forget your marketing mix. As well the maketing mix has become somewhat obsolete as we can add some other P´s..Price, Product, place, promotion + profit, planning+ personal promotion (i.e. diret sales), etc. etc.
Several reasons:1. The product is bad and so after the first purchase the customer does not purchase it again and does not recommend it to friends.2. People become over saturated with the message and so the advertising does not attain the same desired effect of grabbing the interest of customers.3. The advertising is not appropriate for the stage of the product's development. There are stages for product promotion and if the stage does not sync with the actual developmental position of the product then this discord will be felt by the consumer.4. The distribution of the product is not sufficient. I have had experience with this where people get frustrated that they hear about a product but cannot find it anywhere.5. Similar to point4 ... the advertising is so effective that people look for the product, but the manufacturer is so small that they cannot meet demand for that product so people get frustrated and start purchasing competitor products.6. You are targeting the wrong demographic. Your advertising is effective to that age group... but they are not the right demographic to sustain or grow the product's expansion in the market.
hope that helps.
Taji
Reputation - Many consumers prefer brand names that they have grownup with.
If a product is a new product of a well known brand, it tends to do better than new products from unknown brands.
Quality - Many consumers are skeptical (with good reason) and need convincing that a new product will benefit them. Their main question could be, Why should they change from a product they may have been using for many years and are happy with to one which they know little about and don't want to be disappointed having spent their hard earned money on it?
Supply - There are many new products that are promoted to the max but disappear or it is difficult to get refills for them. For example, one time there were only a few razor products on sale, now the market is inundated with the latest razor and refills. What happens though? You buy a new razor and maybe the refill at the same time and this is not cheap. Then the refill is finished and you have to purchase another. Can you find the same refill razor specific to the new fancy razor you just bought, no. So this whole purchase has been a waste of time and money. This leads on to demand.
Demand - Therefore, demand for a new item can decrease and soon no longer to be found or seen unless it is in the 'buy-one-get-one-free' which is where many low quality, low demand products end up.
when the advert for the product is not professional, it could led to a low market force. And when an occasions like that arrives i think the product needs to be re brand.
When advertising a product, there are several factors that come into play: You must have full knowledge of the market you are targeting, and timing of the same. Secondly, you have to check on how you package the product. Beauty and attraction will be first then followed by a high market response.