Advertising: Definition, Objectives, Importance, Types and Functions

In this article we will discuss about:- 1. Definition of Advertising 2. Basic Features of Advertising 3. Elements 4. Objectives 5. Types 6. Functions 7. Media 8. Benefits.

Definition of Advertising:

Every day we come across hundreds of advertising messages, which tell us about various products such as soaps, detergent powder, soft drinks and services such as hotels, insurances policies etc. Advertising is perhaps the most commonly used tool of promotion by an organization. It is commonly understood as to communicate about a product or service. But it is not correct and complete to understand it as so.

Actually, advertising includes all the activi­ties performed by the enterprise to present the goods and services to the con­sumer and to motivate them to buy these goods and services. It is non-personal form of communication, which is paid for by the marketer (sponsor) to promote his goods and services. The term “advertising” has been defined by many emi­nent authors as –

According to William J. Stanton, “Advertising consists of all the activities involved in presenting to a group, a non-personal, oral or visual, openly spon­sored message regarding a product or service or idea, this message is called adver­tisement, is disseminated through one or more media and is paid for, by the iden­tified sponsor”.

According to Wheeler, “Advertising is any form of paid non-personal pre­sentation of ideas, goods and/or services for the purpose of inducing people to buy”.

According to American Marketing Association, “Any paid form of non-per­sonal presentation and promotion of ideas, goods and services, by an identified sponsor. The medium used are print broadcast, and direct”.

Thus, advertising can be defined as a paid form of non-personal presenta­tion of product or service or idea. In developing advertising programme, one must start with the identification of the needs and wants of the market and must take five major decisions regarding Mission, Money, Message, Media and Mea­surement of the advertisement programme as stated by Philip Kotler ‘as 5 M’s of advertising’ in his book Marketing Management.

Basic Features of Advertising:

From the above explanation and definition of the authors, we can say that advertising has following distinguishing features:

i. Paid Form – It is a paid form of communication i.e. the sponsor has to bear the cost of communication with the respondents.

ii. Non-Personal – There is no direct face-to-face contact between the prospect and the advertiser. That is why it is referred as non-personal method of promotion.

iii. Identified Sponsor – Advertising is always undertaken by some identified individual or company, who makes advertising efforts and also bears the cost of undertaking such effort.

Elements of Advertising:

The elements of advertising are as follows:

i. Preparation or Homework:

Refers to the act of imagining and compiling all the possible advertisements by numerous mediums, which are as follows:

a. Taking references from the advertisements of competitors

b. Reading books on advertising to collect ideas

ii. Unique Selling Proposition (USP):

It refers to the singular benefits and advantages of a product that creates a favorable impression in the mind of customers. The advertisements should focus on USP of the product.

iii. Maintaining a Unique Image:

It indicates that an organization should stick to its own image and personality. The organization should not try to imitate its competitors rather should focus on the betterment of its own product or service.

iv. Teamwork:

It refers to the collective efforts of advertising specialists of an organization. These specialists work together towards the success of an advertisement. The collective efforts of specialists ensure that the product and its important aspects are well explained to customers through the advertisement.

v. Selecting an Efficient Advertising Medium:

It refers to the decisions taken to select the appropriate medium for advertising a product. The choice of a medium depends on the advertising budget of the organization, type of product, and targeted market. Few products do not require much explanation, thus, they can be advertised through a medium, such as radio. In this case, the target market comprises radio listeners who belong to lower-middle class families.

Few other products may require demonstrations or visual aids, for example, vacuum cleaners and water purification machines. Such products targets middle-class and high-class families and can be advertised through television.

vi. Retaining the Customers:

It indicates that an organization should not overlook its existing customers while trying to make new customers. It is important for the organization to keep producing numerous reminder advertisements to keep its existing customers updated about the existence of the product.

Objectives of Advertising:

The objective of advertising is nothing but to sale the product or idea or a service. The real objective of advertising is to increase awareness among the consumer about the sellers product. According to Huigy and Mitchell, “The pur­pose of advertising is to sell goods, services or ideas to a large group of prospective purchasers.”

R.S. Davar stated the advertising objective as, “Advertising aims at commencing the procedure, educating the consumer, supplementing the sales­man, connecting the dealer to eliminate the competitor but above all, it is a link between the producer and the consumer”.

In simple words the following are the main objectives of advertising:

1. Preparing Ground for Sale of New Products:

Whenever a new product is introduced in the market, advertising becomes necessary for informing potential consumers about the product. In this way, advertising can be used for preparing ground for sale of new product.

For achieving this objective, various mass media like radio, television and cinema are used by the advertisers.

2. Increasing Demand for the Product:

Another objective of the advertising is to increase the demand for the product. Advertising helps in creating a favourable atmosphere for maintain or improving sales of the product. By means of the advertising prospective customers may be induced to buy a particular product by informing them about comparative quality price and other attributes of the product. Thus, changing the habits of the consumers so as to shift from a rival product.

3. Educating the Consumers:

One of the basic objectives of every advertising is to educate the consumer and the users about the uses and utilities of the product. This helps the consumers and users in making good choice.

4. Building up Brand Image:

Another objective of advertising is to build up brand image and brand loyalty towards the product. This objective is achieved through constant and repeated advertising about the brand.

5. Facing the Competition:

One of the basic objectives of advertising is to help the marketer to face the existing competition effectively and efficiently. The marketers inform the consumer about the price, quality and availability of product through advertising.

6. Supplementing the Salesman:

The objective of advertising is also to assist the salesman’s efforts in increasing the sales of the product. By means of educating customers about the product, advertising reduces the work load of the salesman for selling the product.

Mathew’s, Buzzell and Frank had given the following objectives of the advertis­ing:

(a) To make an immediate sales.

(b) To build primary market.

(c) To introduce a price deal.

(d) To inform about a product.

(e) To build brand recognition or brand insistence.

(f) To help salesmen by building an awareness of a product among retailers.

(g) To create a reputation for services, reliability or research strength.

(h) To increase market share.

(i) To modify existing product appeals and buying motives.

(j) To inform about the availability of new products or features or price.

(k) To increase the frequency of use of a product,

(l) To increase the number or quality of retail outlets,

(m) To build overall company image,

(n) To effect immediate buying action.

(o) To reach new areas or new segments of population within existing areas, and

(p) To develop overseas.

Types of Advertising:

Broadly speaking, advertising can be classified into two broad categories viz. product advertising and institutional advertising.

Product Advertising:

Product advertising is that advertising whose main purpose is to inform and stimulate the market about the advertiser’s product or services. This advertising usually promote specific branded products in such a manner as to make it more desirable in the eyes of prospects than competitor’s brand.

Product advertising on the basis of action can be further classified as Direct Action Advertising and Indirect Action Advertising —

(a) Direct-Action Advertising – Direct-action advertising are those advertisements which makes buyer to take action immediately. For example- Reduction in price during clearance sales.

(b) Indirect-Action Advertising – Indirect-action advertising is done to stimulate demand over a period of time and increase buyer’s respect towards manufacturer’s brand. Such advertising is a form of long-range promotion and is designed to create desires in the buyer’s mind.

Product advertising on the basis of demand may be sub-divided into pioneer demand advertising and selective demand advertising.

(a) Pioneer Demand Advertising is used when a product is first introduced in the market. The main aim of such advertising is to inform about what the product is, what it does, how it is used and from where it can be purchased. For example – advertising of motor cars, electronic items etc., for first time.

(b) Selective advertising is made to meet the selective demand for a particular brand or type of product such as Ambassador Car. It is also known as competitive advertising as it point out features and advantages that a consumer get by using it and that may not be available in competing brand.

Product advertising can be also divided on the basis of product life cycle stage. It can be informative, persuasive and reminder advertising.

(a) Informative advertising is that advertising which is done for the promotion of the products. It seeks to develop initial demand for a product. These advertising ads are such that they appeals to the consumer’s emotions as well as their rational motives. These are used at the introduction stage of the product life cycle.

{b) Persuasive product advertising is done at growth and maturity stage in the product life cycle. These advertisements aim at providing competitive advantage over the rivals’ product.

(c) Reminder product advertising aims at reminding the prospects about the features and benefits of the products. It is generally used at the maturity as well as in decline phase of the product life cycle. It is also known as retentive advertising.

Functions of Advertising:

For many firms advertising is the dominant element of their promotion mix. It is particularly true in the case of producers producing convenience goods like – detergent, toilet soaps; soft drinks etc. However, in recent times the use of advertising is continuously increasing in case of shopping and speciality goods too, as we see in case of automobiles; home appliances etc. Huge advertising is done by the marketers to introduce a new product and show its features to the target audience.

Advertising can also be used to convince the potential buyers that firm’s goods or services are superior to that of the competitor’s goods or services in terms of quality, quantity or price. It also creates a brand image in the mind of the customer and make them loyal towards the firms goods or services.

Adver­tising generally performs the following functions:

i. Promotion of firm’s goods and services and thereby increasing sales of the firm.

ii. Creating awareness in the potential buyer about the new product.

iii. Creating a favourable public image and thereby brand image in the market.

iv. Mass production facilities and thereby optimum utilization of resource of the firm.

v. Providing supportive roles to other promotional measures.

Media of Advertising:

1. Mural Advertising:

Mural or outdoor advertising has long life. It has a general and wide appeal. It can attract attention of a large section of population. An advertiser has ample scope to use skill and art in advertising.

2. Press Advertising:

Newspapers have a general and wide appeal. Repeat advertising is possible. Periodical change in size and contents is also easy. Newspapers offer promotional assistance. They are the best source of market information.

However, newspapers have short span of life. We cannot have coloured and attractive advertisements. Waste in advertising is considerable. Illiteracy affects its utility.

3. Film Advertising:

It has a wide appeal. It can overcome language barriers. Audio visual technique has maximum impact on audience. Sound and sight both are employed for communicating the message.

4. Radio Advertisement:

Radio has the shortest closing times. Radio uses only an audio signal. Announcement can be made very quickly. It can secure dealer support, has a very wide appeal and suitable even for illiterate people. Repeat message is quite common.

5. Television Advertisement:

Television uses both video and audio signals. Television has all the advantages of radio, namely, sound and explanation, plus the additional advantage of sight. It can appeal through ear as well as eye.

Products can be demonstrated with explanation. Television reaches the audience almost like personal face to face contact. To that extent it is just like personal salesmanship.

6. Transit Advertising:

It consists of car-card advertising, which is located within buses, subways, railways and outside displays which appear on the front sides and backs of buses or other public transport and at transportation terminals. It is the lowest-cost media.

7. Direct Mail:

Direct mail is any advertising sent by mail, including sales letters, folders, pamphlets, booklets, catalogues and the like. Direct mail is the most personal and selective media. It reaches only the desired prospects. It has minimum waste in circulation.

Benefits of Advertising:

Advertising helps in spreading information about the advertising firm, its products, qualities and place of availability of its products, and so on. It helps to create a non-personal link between the advertiser and the receiver of the message.

The significance of advertising has increased in the modern era of large scale production and tough competition in the market. Advertising is needed not only by the manufacturers and traders but also for the customers and the society.

1. Benefits to Manufacturers and Traders:

It pays to advertise.

Advertising has become indispensable for the manufacturers and distributors because of the following advantages:

(i) Advertising helps in introducing new products. A business enterprise can introduce itself and its products to the public through advertising.

(ii) It can create new taste among the public and stimulate them to purchase the new product through effective advertisement.

(iii) Advertising assists to increase the sale of existing products by entering into new markets and attracting new customers.

(iv) Advertising helps to create steady demand of the products. For instance, a drink may be advertised during summer as a product necessary to fight tiredness caused by heat and during winter as an essential thing to resist cold.

(v) Advertising help in meeting the forces of competition in the market­place. If a product is not advertised continuously, the competitors may snatch its market through increased advertisements. Therefore, in certain cases, advertising is a necessity to remain in the market and remind the customer as done by soft drink companies.

(vi) Advertising is used to increase the goodwill of a firm by promising improved quality to the customers.

(vii) Advertisements increase the morale of the employees of the firm. The salesmen feel happier because their task becomes easier if the product is advertised and known to the public.

(viii) Advertising facilitates mass production of goods which enables the manufacturer to achieve lower cost per unit of product. Distribution costs are also lowered when the manufacturer sells the product directly to the customers. Advertising facilitates direct distribution of the product through the retailers. Retailers are encouraged to purchase and sell the advertised products.

2. Benefits to Customers:

Advertising offers the following advantages to customers:

(i) Advertising helps the customers to know about the existence of various products and their prices. They can choose from the various brands to satisfy their wants. Thus, they cannot be exploited by the sellers.

(ii) Advertising educates the people about new products and their diverse uses.

(iii) Advertising increased the utility of existing products for many people adds to the amount of satisfaction which they are already enjoying.

(iv) Advertising induces the manufacturers to improve the quality of their products through research and development. This ensures supply of the products of better quality to the consumers.

3. Benefits to Society:

The society at large is also benefited because of advertisement:

(i) Advertising provides employment to persons engaged in writing, designing and issuing advertisements. Increases employment brings additional income with the people which stimulates more demand. Employment is further generated to meet the increased demand.

(ii) Advertising promotes the standard of living of the people by increasing the variety and quality in consumption as a result of sustained research and development activities by the manufacturers.

(iii) Advertising educates the people about the various uses of different products and this increases their knowledge. Advertising also helps in find customers in the international market which is essential for earning foreign exchange.

(iv) Advertising sustains the press, and other media. It provides an important source of income to the press, radio and television network. The customers are also benefited because they get newspapers and magazines at cheaper rates. The publishers of newspapers and magazines are benefited because of increased circulation of their publications. Lastly, advertising also encourages commercial art.