COMMERCE O LEVEL(FORM THREE) NOTES – ADVERTISING

ADVERTISING

When a company launches new products, the existence of such products in the market is enhanced through a process known as advertising.

Advertising is the process of informing existing and potential customers about the existence of a product or service in the market.

Or

Advertising is a marketing technique intended to create or increase public awareness of existing or new products.

Besides offering information about the existence of a product or service, advertising also provides information about the following:

• Price of the product or service
• Quality of a product or service
• Name and content of the products
• What the product or service offers
• Where to obtain the product or service

AIM OF ADVERTISING

Advertising is aimed at the following:

• Higher Sales
  The main purpose of any business is to make a profit, and in general, the more goods a business sells, the higher its profit will be. Profit should rise at a higher rate than sales because some of the costs of production do not increase with output. In commercial terms, as sales increase, the cost per unit of production is reduced.
• New products
  These have to be brought to the attention of the public if they are to catch on. Advertising seems capable of creating a demand for products that people did not realize they needed.
• Branded goods
  Manufacturers’ and retailers’ branded goods are often advertised to keep the brand name in the public eye. Some producers identify their goods by a special sign or trademark and advertise on the basis of this.
• The company image
  Businesses generally want to project a favourable image of themselves to the public. They like to be known for the reliability or high quality of their products. Many advertisements are designed purely to project the desired image and do not aim to sell goods directly.
• Retail outlets
  Some advertising is restricted to the trade press in an attempt to get more retailers to sell the product. Increasing the number of outlets in this way should result in higher sales.
• Winning rival firms
  Advertising is aimed at winning over rival firms in the market.
• Information
  Many advertisements are designed to inform consumers of changes in the nature of the product. You can probably notice how many products are described as “new” or “new formula” in advertising.
• Provide education to the public
  Advertising aims to educate the public on the use of a new product, for example, “shake well before use” or “keep away from children.”

TYPES OF ADVERTISING

The following are three types of advertising:

1. Persuasive or Competitive advertising
   This type of advertising is aimed at convincing customers to buy one’s product in favour of that of a competitor. Example: persuading people to buy Fanta Orange instead of Mirinda Orange.
2. Informative advertising
   This type of advertising is aimed at educating the audience about goods of a technical nature. It also makes people aware of the availability of goods and their salient features, for example, a new brand, colour, performance, or ways of using it.
3. Generic advertising
   It refers to collective general advertising consisting of different producers for the purpose of reducing wasteful competition. It includes both information and persuasive advertising.

ADVANTAGES OF ADVERTISING TO THE CONSUMERS

• They inform consumers of what is available for purchase in the market.
• They inform consumers how the product is used.
• They inform consumers where to buy the product.
• They provide information about the price, quality, size, and other features of the products.
• Advertising enables consumers to compare prices and other features of different commodities, thereby enabling consumers to choose the most suitable products.
• Consumers enjoy reduced prices due to competition among manufacturers.

DISADVANTAGES OF ADVERTISING TO THE CONSUMERS

• The cost of advertising is passed to the consumer in terms of pricing.
• Some advertisements are misleading, giving exaggerated information about a product. This influences customers to buy the product irrespective of its usefulness or quality.
• Some advertisements do not mention the side effects of commodities.
• Advertisements are not always appreciated by customers, especially when they interrupt interesting programmes on television or radio.

ADVANTAGES OF ADVERTISING TO THE PRODUCERS OR MANUFACTURERS

• They improve the sales volume of the products, thus leading to higher profits.
• Advertisements create awareness of their products to potential buyers.
• Advertisements make a company’s products popular in the market; hence, they may encourage more frequent use of the product.
• They remind customers about the products in the market, which may boost sales.

DISADVANTAGES OF ADVERTISING TO THE PRODUCERS OR MANUFACTURERS

• Some advertisements are wasteful since they do not encourage productive competition.
• They lead to cut-throat competition, which might force some producers to close down their businesses.
• It is an expensive activity of sales promotion.

ADVANTAGES OF ADVERTISING TO OTHERS

• Advertising is a major source of income to the advertising media.
• It creates jobs for advertising agencies.
• Governments earn revenue through tax.

ADVERTISING MEDIA

Advertising media is the means or channel through which the advertisement is conveyed to the public. Examples of advertising media are television, newspapers, radio, etc.

(a) TELEVISION

This is a system of broadcasting pictures and sounds by electronic signals. Television is probably the best medium for advertising consumer goods.

ADVANTAGES OF ADVERTISING ON TELEVISION

1. It has the advantage of providing a combination of sound and vision.
2. Television advertisements can be shown at times appropriate to the market for the goods. For example, children’s sweets and toys can be promoted between children’s programmes, and household goods later in the evening when adults are more likely to be watching television.

DISADVANTAGES OF ADVERTISING ON TELEVISION

1. Very few people can afford TV sets.
2. Advertisements on TV are very expensive.
3. They are hardly available.

RADIOS

Radio is a system of broadcasting information and programmes that people can listen to. Advertising through radio is done through commercial programmes. It has a popular audience and allows advertising in many local languages with music in the background.

ADVANTAGES OF ADVERTISING ON RADIO

1. It covers a wider area, hence reaching many people.
2. Advertisements can be made to entertain consumers.
3. It is cheaper than advertising on television.
4. It can create employment.
5. It can give clear explanations to the listeners.
6. It is a source of income for a nation.
7. Radio covers a bigger geographical area.
8. It is good even for the blind who cannot benefit from TV advertisements.

ADVERTISING THROUGH NEWSPAPERS

These are printed and published papers that contain news. The most important recent development in this sector has been the growth of free local newspapers delivered to most households in the area.

ADVANTAGES OF ADVERTISING THROUGH NEWSPAPERS

1. Customers are able to read it again and again.
2. Newspapers are known to carry advertisements, so they already have an audience.
3. Newspaper advertisements make it possible to use pictures.

DISADVANTAGES OF ADVERTISING THROUGH NEWSPAPERS

1. Advertisements in newspapers can only reach those who can read and write.
2. It is expensive because one needs to advertise in many papers, especially the popular newspapers.

OTHER ADVERTISING MEDIA

1. POSTERS
   Large printed notices or pictures put on a wall to announce or advertise something.
2. THE CINEMA
   These are buildings where moving pictures (films) are shown. Producers and traders may ask an advertising agent to produce a short commercial for them to circulate in cinemas.
3. NEON SIGNS
   These are signs installed on roofs or walls of major buildings which are let out to producers after paying rent. Neon signs are very expensive in terms of initial costs and maintenance.
4. DIRECT MAIL
   This medium of advertising involves sending circular letters or other forms of advertising directly to potential customers or retailers. It may include leaflets, book lists, price lists, catalogues, etc.
5. EXHIBITIONS AND TRADE FAIRS
   A trade fair is a place where manufacturers and businessmen gather together, normally for a few days, weeks, or monthly, to display their goods in order to create a market for their goods.

FACTORS TO BE CONSIDERED BEFORE CHOOSING THE ADVERTISING MEDIA

1. Cost of the media
   Some advertising media are more expensive than others. For example, it is cheaper to use newspapers than television. The costs of the media should be justified by the value of the products.
2. Target social group
   Some media are common to ordinary people, e.g., newspaper, radio, while others are mostly for well-to-do people, e.g., television, cinema, or video. The choice of the medium will be based on the target group, that is, whom you want to reach.
3. Target age group
   Different age groups prefer certain sources of information. Advertising on school materials should be placed in newspapers, radio, or school journals. The medium to be used should therefore be based on the age group for which the message is intended.
4. Geographical area to be covered
   Some media cover a wide area, while others reach a very small area. For example, radio has countrywide coverage, while cinema reaches only people in a certain locality.
5. The number of people reached by the medium
   Radio reaches more people than television; thus, this factor is very important to consider.
6. The economic group to which the medium appeals
   Some products, like machines, are not of interest to ordinary people; such products must be advertised through specialized journals, e.g., media journals for media appliances, engineering journals for engineering machines, office journals for office equipment, etc.