Meaning
It helps the consumer by providing knowledge about a variety of products and services so the customer chooses the right product. Advertising also played an important role in the development of rural and urban areas. Advertising helps to increase sales that will result in the consumption of goods and the flow of money. This process will improve the growth of the economy.
Positive Aspects of Economic Advertising
1.) Increase GDP
2.) Competition in advertising
3.) Standard of living
4.) Consumer Welfare
1.) Increase GDP
Gross domestic product ( GDP ) is the total of all the goods and services produced in a country over the period of time. However, it is difficult to measure the GDP because there are some unofficial transaction happens in the economy which is not reported to the government. Advertising helps to boost the production of more goods and services that increase GDP.
2.) Competition in advertising
Competitive advertising is an effort by one or more companies to create a difference between its product and the similar product offered by its competitors. Competition start where the company has substitute products. Competition creates an environment where every company makes an effort to provide a better quality product at a low price to its customers.
3.) Standard of living
The Standard of living refers to the level of wealth, comfort, goods, and necessities available to an individual, group, nation, or to a certain geographic area. The Standard of living is used to compare the difference between two geographic areas. Advertising helps the economy to achieve wealth levels, comfort, goods, and necessities that increase the standard of living of people.
4.) Consumer Welfare
Consumer welfare refers to the individual benefits received from the consumption of goods and services. The company focuses on Consumer welfare by delivering quality goods with a long life duration of products. Consumer welfare means the welfare of the economy.
Negative Aspects of Economic Advertising
1.) Advertising Focus on Customer
2.) Advertising Multiplies the needs
3.) Increase Product Cost
4.) Restricts Entry of New Units
1.) Advertising Focus on Customer
Advertising is more over-focus on selling the products and services to target customers. The company wants to sell its product some of them don't believe to provide quality goods. They sell their products by manipulating the customer.
2.) Advertising Multiplies the needs
The economy is too big there are millions of products available in the market. They all are focus on making you addicted to the product. Some companies produce the different flavor of one product, some companies provide a product that gives you comfort zone, some launch their product with the minor specification.
3.) Increase Product Cost
Advertising is not so easy companies have to spend crore of rupees to advertise its product. All the cost of advertising is not personally bear by the company. The burden of advertising coast is collected from the customer indirectly. Companies distribute their advertising cost over the product and service they are providing to their customers.
4.) Restricts Entry of New Units
As we discuss earlier that companies require huge funds to advertise their products. New companies do not have sufficient funds to advertise their products, so it creates trouble for them to take their place in the market. Also, existing companies have their brand value and new companies cannot compete with popular brands.
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