advertisement help in higher profit by increase sale and reduce cost of production. explin
Answers
Answer:
yes , because
suppose that a pencil is about 5rupee
then retailer borrow it in 3ruppe then I give customer at 5rupee
Answer:
ADVERTISING THEORY IS WHAT IMPACT MARKETING HAS ON THE CONSUMER MARKET. WHILE THE ISSUE OF CONSUMER CHOICE TENDS TO TAKE CENTRE STAGE, THE ISSUE OF THE IMPACT OF ADVERTISING ON PRICES ON THE CONSUMER SIDE IS PARAMOUNT. THIS REPORT SETS OUT TO EXAMINE WHAT – IF ANY – IMPACT ADVERTISING HAS ON CONSUMER TRENDS.
The advertising industry has an awkward relationship with price. We rarely set price objectives with our clients – let alone celebrate price effects – although our industry’s own studies conclude that this is the very basis of profitable long-term returns for an advertiser.
We are, perhaps understandably, uncomfortable rather than surefooted in the whole area of advertising and prices. The prosaic conclusion of ‘the man in the street’ and of many commentators and even policymakers – that advertising puts prices up, if only to pay for the cost of the activity itself – is accepted without argument.
In reality, as we shall see, advertising’s relationship with price – and prices, more generally – is more nuanced than it might appear to be on first inspection. There are concrete arguments to be made that advertising serves to both increase and reduce prices, depending on our chosen lens (whether we see advertising as a ‘persuasive’ activity or merely an ‘informative’ one), and whether we are looking at this activity at a general or advertiser-specific level.
Wearing our strategy and effectiveness hats, the industry should be wrapping its arms more materially around its own findings. Price should be understood as something that advertising can influence – as one of the most commercially powerful levers it can pull – rather than just a separate, standalone variable in the marketing mix. By supporting pricing levels, we can create more profitable returns for our clients from their advertising activity.
It is equally legitimate to claim, however, that in many other ways advertising serves to lower prices. Advertising can and does promote more competitive pricing across a category, most obviously among retailers or on behalf of individual market players. It acts as a guarantor of demand and so contributes to economies of scale, which then benefit consumers in the form of lower prices or more rapid innovation. By doing so, advertising works – at its grandest – systemically to oil the engine of capitalism. And as markets and advertising budgets continue to migrate online, this downward influence on price seems increasingly obvious.
Furthermore, advertising funds or co-funds much of our media consumption: consumption that we would otherwise bear the full cost of as consumers.
That these apparently contradictory findings can be reconciled is not an authorial sleight of hand; first of all, this is because we can and should draw a line between relative pricing (that is, the pricing one market player can achieve versus another, which advertising can demonstrably influence, at least on occasion) and absolute pricing at a market level, where the case ‘against advertising’ is far from clear-cut.
Secondly, this is because, as pointed out earlier in this publication, the very term ‘advertising’ can be so misleading – as a collective noun comprising the competitive and often contrary actions of so many agents, in so many different categories – that it would be simplistic to advance a ‘one-size-fits-all’ answer to the question of advertising’s relationship with price.
Indeed, in the 35 years since the Advertising Association first tackled the relationship between advertising and price, much diligent academic work has been carried out at both a macro and micro level. A short ‘primer’ such as this can only hope to call out the most salient of their arguments and reach a working conclusion.....