Advertising plays a major part in helping to sell goods in the massy market and is often used to launch new product. It is also used to keep brand names in the public eye and to show how one firms brand is differentiated from other.
Firms Advertise in order to inform – to tell the potential customers about goods and services they produce – and in order to persuade – to increase sales by persuading people to buy a certain brand of goods or buy at a particular shop.
The key advertising media are:
- Television ads can reach millions and can target people who watch particular programmes, but it is very expensive
- Radio is cheaper and listener of particular programmes can still be targeted, but it is sound only and audiences are usually smaller
- Newspapers and magazines know a lot about their readers so it is easy to target effectively. They will often be read more than once. But they are static, silent and often not in colour.
- Posters and billboards have a high visual impact, stay in place for a long time and can be seen daily by lots of people. But often they are near roads and drivers only see them for a few second so they cannot contain much information. And they are vulnerable to wind, rain and graffiti.
- Cinemas have a high visual and sound impact and particular films can be targeted. Unlike all the other media, the audience is captive. But they are expensive considering the audience size
- Leaflets, flyers and junk mail are cheap to produce and distribute, and junk mail is good for targeting. But they are easy to ignore.
- Internet sites can have a high visual impact, be interactive, and link directly buying the product. But the advert is completing with a lot of other stuff on the net so it has to really grab people
The advantages of advertising:
- It gives people information and helps them make a choice.
- It subsidises newspapers and magazines, so they cost less.
- It subsidies TV programmes, so they are better quality.
- It is a big industry; it employs a lot of people.
The disadvantages of advertising:
- It makes people think that they want things they used to be perfectly happy without.
- It cost money, so firms have to charge more for their product to pay for it.
- An advertising is expensive, small firms find it difficult to complete.
Disadvantages are that it is not always relevant to your needs, it is not specifically about your product, and it is often out-of-date.
The more a firm can find out about the people who buy or may buy their products the easier it becomes both to produce what they want and then to persuade them to buy. All the information can be used to improve the way in which goods and services are marketed.
Large group of consumers who have similar needs because they are like each other in some way are called market segments. There are 4 main ways of dividing people into different market segments:
- Age – for example the teenage market, or “grey power”
- Social class – class A (professional) down to class E (the unemployed)
- Location – some product have strong ties to particular places and are only wanted in these particular places.
- Culture and religion – different groups have their own unique products according to their traditions.