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Mostly, it is true. Based on the same, you want to create awareness in public about the product and make them to buy it thereby you expect return on your investment.
It is certainly not binge achieve higher revenues in all areas of marketing spending is the total enterprise spending on marketing activities. This includes advertising and promotion usually without a fee. Sometimes spending includes sales forces may include quotations. In a poll in which nearly 200 senior marketing managers 0.52 percent replied that they had found a measure "marketing spending" very useful.
And to predict the extent of change selling costs depending on the sales, the company must distinguish between fixed selling costs and variable costs of sale. Perception of the difference between the fixed and variable costs to sell companies may help to potential risks associated with the strategies of alternative sales estimate. In general, the strategies that bring variable selling costs less dangerous because the variable selling costs remain lower in the case of sales failed to meet expectations
I don't agree. Advertising expenses is considered to be Selling & Administrative Expense investment is mostly looked at to provide a future profit.
For sure advertisement is an investment and is not wasteful. There are two scenarios:
1. Advertisement will be successful and investment will be returned in sales growth
2. Advertisement will not be successful and it is a price for your mistake not to be made in the future
Yes, because that might give rise to revenue in the future
I agree. There are ways and means of calculating effectiveness and ROI of the advertisements.
there are two most popular areas which need to be measured for knowing the effectiveness of advertisement and they are:
Communication Effect
Sales Effect
Communication Effect Research consists of three types of researches:
Direct Rating Method - here, customers are directly asked to rate the advertisement and then these rating are calculated.
Portfolio Tests - here, the customers see the ads and listen carefully to the ads and all the contents of the ads and then they are asked to recall the ad and the contents. Then the calculations are done with help of this data.
Laboratory tests - here, the apparatus to measure the heart rates, blood pressure, perspiration, etc are used on the customer after he watches the ad, to know the physiological reactions of the body.
Advertising is a powerful weapon for any brand or product.Though it was late when companies demystified the effects of advertising on buying behavior but nowadays the field has developed a hierarchy tree branching into various modes of advertising communications for ethical placement of corporations.It also affects how businesses are conducted globally may be start up or new expansion policy.
Some people believe that advertisement is a waste of company's money and energy. Most consumers know what they need and don't pay much attention on advertisements, so the advertisement has little effect but cost too much. However, I disagree with the statement because I consider that advertisements have their own special use.
On one hand, advertisements can send useful and opportune messages for new products and new shops. When a new product comes into being or a new shop starts business, people can hardly know if there is not an advertisement about it. So, advertisement is necessary to propagate a new thing. It can be a useful promotion to tell all people to have a try on it.
On the other hand, people who know what they want to buy may not actually determine that which brand they will choose or where they want to go for purchase. Advertisement can help these consumers exactly. For instance, my sister wanted to buy a pair of new boots. She called me to ask which shoe store is economical. I just remembered an advertisement I see on the newspaper several days before. It is said that boots in "The Happiness Market" is selling at a discount. So I told my sister to go there and she did.
Anther factor shows that some interesting advertisements can make people happy and impressed them to be potential consumers. They will keep the brand and the product in mind. Some day when they need some similar products, they will choose to buy the product in the interesting advertisement. Even when their friends or relatives need those things, they can also an oral promotion for the product.
Actually, advertisement is so expensive that makes some company cannot afford it. Also, it must take much energy to create an impressive advertisement. But I think the money and energy pay for the advertisement is worthwhile for a company.
"The money spent on Advertising is an investment and is not wasteful." I think so.
However, The reasons could be explained on light of Advertising and Sales Management.
Generally, The major advantages of advertising are:
(1) Introduces a new product in the market, (2) Expansion of the market, (3) Increased sales, (4) Fights compilation, (5) Enhances good-will, (6) Educates the consumers, (7) Elimination of middlemen, (8) Better quality products, (9) Supports the salesmanship, () More employment opportunities, () Reduction in the prices of newspapers and magazines, () Higher standard of living.
Thus, the benefits derived from advertising are manifold. It is one of the most important components of the marketing process.This is beneficial to manufacturers, traders, consumers and society as a whole.
Advertising offers the following advantages:
(1) Introduces a New Product in the Market:Advertising plays significant role in the introduction of a new product in the market. It stimulates the people to purchase the product.(
2) Expansion of the Market:It enables the manufacturer to expand his market. It helps in exploring new markets for the product and retaining the existing markets. It plays a sheet anchor role in widening the marketing for the manufacturer\\\\'s products even by conveying the customers living at the far flung and remote areas.
(3) Increased Sales:Advertisement facilitates mass production to goods and increases the volume of sales. In other words, sales can be increased with additional expenditure on advertising with every increase in sale, selling expenses will decrease.
(4) Fights Competition:Advertising is greatly helpful in meeting the forces of competition prevalent in the market. Continuous advertising is very essential in order to save the product from the clutches of the competitors.
(5) Enhances Good-Will:Advertising is instrumental in increasing goodwill of the concern. It introduces the manufacturer and his product to the people. Repeated advertising and better quality of products brings more reputation for the manufacturer and enhances goodwill for the concern.
(6) Educates The Consumers:Advertising is educational and dynamic in nature. It familiarizes the customers with the new products and their diverse uses and also educates them about the new uses of existing products.
(7) Elimination of Middlemen:It aims at establishing a direct link between the manufacturer and the consumer, thereby eliminating the marketing intermediaries. This increases the profits of the manufacturer and the consumer gets the products at lower prices.
(8) Better Quality Products:Different goods are advertised under different brand names. A branded product assures a standard quality to the consumers. The manufacturer provides quality goods to the consumers and tries to win their confidence in his product.
(9) Supports The Salesmanship:Advertising greatly facilitates the work of a salesman. The customers are already familiar with the product which the salesman sells. The selling efforts of a salesman are greatly supplemented by advertising.
() More Employment Opportunities:Advertising provides and creates more employment opportunities for many talented people like painters, photographers, singers, cartoonists, musicians, models and people working in different advertising agencies.
() Reduction in the Prices of Newspapers and Magazines: Advertising is immensely helpful in reducing the cost of the newspapers and magazines etc. The cost of bringing out a newspaper is largely met by the advertisements published therein.
() Higher Standard of Living:The experience of the advanced nations shows that advertising is greatly responsible for raising the living standards of the people.
