As a form of mass communication, advertising delivers relevant messages to target audiences and by changing mental states, it can perform a number of functions. Advertising moves consumers from being unaware of a product or service to finally purchasing it. An ad is considered effective if it propels the consumer a step further in this process. This is how the function of advertising is viewed.
- STIMULATES DEMAND – By informing consumers about the availability of a product in the market, advertising stimulates latent needs, and reinforces the aroused needs. There is a general agreement that advertising has some effect on aggregate consumption.
- STRENGTHENS OTHER PROMOTION MIX ELEMENTS – Advertising does the pre selling of the product and makes the job of the sales people easier. Advertising reaches a relatively large audience and makes them favourably predisposed. Ads carry the sales, promotional messages and often produce quick sales response.
- DEVELOPS BRAND PREFERENCE – Consistent and persuasive advertising often induces brand trial or purchase. When the product delivers the promised quality, service and value, it creates satisfied customers who become instrumental in spreading a favorable word-of-mouth. Satisfied customers also develop brand preference, which gets reinforced by repeated ads. Products with strong brand franchise offer some protection against the competition. Retailers develop confidence and do not hesitate in stocking strong brands. Brand loyal customers are an important asset for the company and are less likely to be influenced by competitive moves.
- CUTS COSTS – Advertising may be instrumental in cutting down production and selling costs. Increasing unit sales decrease unit costs. Selling costs also may decrease because there could be fewer wasted calls and less strain on sales people.
- LOWERS PRICES – In any market based and competitive economy, when unit cost of a product goes down, there are external and internal pressures which compel companies to lower prices to the advantage of consumers. This often leads to deeper market penetration.
- COMPETITIVE WEAPON – Advertising by itself and coupled with other promotion mix elements, may prove to be an extremely potent weapon to counter competitive moves. Advertising has an established role in creating brand personality and image. It helps differentiate a company’s offer in a manner that the product may be considered as something with unique value having a definite identity of its own