Advertising

Advertising can be thought of as "the means of making known in order to buy or sell goods or services". Advertising aims to increase people's awareness and arouse interest. It tries to inform and to persuade. The media are all used to spread the message. The press offers a fairly cheap method. Magazines are all used to reach special sections of the market. The cinema and commercial radio are useful for local markets. Television, although more expensive, can be very effective. Posters are fairly cheap and more permanent in their power of attraction. Other ways of increasing consumer interests are through exhibitions and trade fairs as well as direct mail advertising.

There can be no doubt that the growth in advertising is one of the most striking features of the Western world in this century. Many businesses such as those handling frozen foods, liquor, tobacco and patent medicines have been built up largely by advertising.

We might ask whether the cost of advertising is paid for by the manufacturer or by the customer. Since advertising forms parts of the cost of production, which has to be covered by the selling price, it is clear that it is the customer who pays for advertising. However, if large-scale advertising leads to increased demand, production costs are reduced, and the customer pays less.

It is difficult to measure exactly the influence of advertising on sales. When the market is growing, advertising helps to increase demand. When the market is shrinking, advertising may prevent a bigger fall that would occur without its support. What is clear is that businesses would not pay large sums for advertising if they were not convinced of its value to them.