Benefits and drawbacks of advertising

• Not all advertising is successful
• In fact advertising does have its advantages and disadvantages

Advantages of advertising

• It informs the customer
• It is part of the competitive process and fights off the competition
• It allows consumers/customers to make an informed choice
• I can act as a guarantee of quality to the customer
• It results in a reduction in other sales expenditure activities for example personal selling
• It helps the customer/consumer identify the product a steer away from imitations
• Helps to reduce sales fluctuations thus
• Helps in planning production by making it more predictable
• If done correctly it can lead to an increase in sales which
• In turn allows for large scale production and economies of scale
• It leads to an increase in market share
• Enhances the image of the business
• Helps explain why the customer/consumer needs a certain product

Disadvantages

• It raises costs and
• Therefore results in an increase in prices
• Which are ultimately passed on to the customer thus reducing competitiveness in terms of price
• It increases prices without adding anything to the value of the product
• Fools people into buying products that they do not need
• Can be used as a way of maintaining a monopoly within a certain market
• It still can be misleading even though it is controlled by various authorities and laws for example it is easy to argue and prove words like the best etc
• It can stimulates wants that cannot ultimately be satisfied
• It reinforces stereotype e.g. women cook
• Can lead to moral degradation
• Influences the media e.g. editorials in newspapers tend to favour their advertiser above common sense or evidence

To access more topics go to the O Level Business Notes