Sonia Sardana (MBA, PGDFM, UGC-NET, Ph.

D(P))

UNIT: III

• Marketing Management
 Definition of Marketing
 Marketing Concept
 Objectives of Marketing
 Functions of Marketing
• Marketing Research
 Meaning
 Definition
 Objectives
 Importance
 Limitations
 Process
• Advertising
 Meaning of Advertising
 Objectives
 Functions
 Criticism

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MARKETING MANAGEMENT

MARKET

In early days:

Market is a place where buyer & seller meet.

But with the passage of time & introduction of new techniques, there is facility to buy goods
through use of internet.

So, there is no place where buyer & seller meets but also transaction takes place.

So, today-Market is group or set of consumers who have interest or who is going to
buy/exchange the product.

Market refers to the group of consumers or organization that in interested in the product,
has the resources to purchase the product and is permitted by law and other regulations to
acquire the product.

Total
Populati
on

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Marketing

• Marketing is the efforts of doing buying and selling activities.

• Marketing deals with identifying and meeting human and social needs. (MEETING
NEEDS PROFITABLY)

Social Definition:

Marketing is societal process by which individuals & group obtain what they need and
want through creating, offering and freely exchanging products & services of value with
others.

Managerial Definition:

Marketing is the art of selling products.

Other Definitions:

The term Mkting is very comprehensive one:

• Marketing starts well before production commences & ends only after rendering
after sales services.

• Marketing is the process of planning & executing the conception, pricing, promotion
& distribution of ideas, goods & services to create, exchange that satisfy individuals &
organizational goals.

PROCESS OF MARKETING

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IDENTIFICATION OF CONSUMER’S NEEDS:

The first and most important step in the process of marketing is the identification of
consumer’s needs. This step provide answer to the questions such as:

Product: What they want to purchase?

Quantity: How much they want to purchase?

Quality: What quality they want to purchase?

Price: At What price they want to purchase?

What will be the value of satisfaction?

All the answers of these questions help the existing firm to make changes in the product & to
launch new product.

For Eg. ...............................................

ENVIRONMENTAL SCANNING:

Environmental Scanning refers to the depth analysis of the environment.

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In this, main emphasis is made on studying the strength & weakness of competitor’s product
& the step take in future.

Earlier the Colgate Cream was the leader in the tooth paste market but the Close-Up came
with Close-Up Gel and it became the leader.

Then the Colgate launch : Colgate-Gel

& again become the leader by introducing various Colgate toothpaste such as:

Colgate Cream

Colgate Gel

Colgate Advance Whitening

Colgate Herbal White

Colgate Active Salt

BUSINESS ANALYSIS:

In Environmental Scanning: we study the strength & weakness of competitors.

In Business Analysis: we study about strength & weakness of own business and

On the basis of Business Technical Analysis (Past record/ trends) we will analyze that the
particular decision will be profitable or not.

If Cost ˃ Revenue, then the idea should be dropped.

PRODUCT DEVELOPMENT:

When Cost ˂ Revenue, the product /Sample will be prepared.

Eg. Before launching “Surf Excel” few samples were prepared for testing.

ESTIMATION OF COST:

Now the cost for the product is ascertained so that price can be fix easily.

SETTING THE PRICE:

There are various methods for fixing price, such as:

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Cost based Pricing

Competitions Based

Leader Price Policy

New Product Pricing etc.

DESIGNING THE DISTRIBUTION CHANNEL:

Now the entrepreneur move toward the transformation of product from own godown to the
ultimate consumer. For this: different channels can be adopted so as:

Showroom

Wholeseller & Retailer

PROMOTION:

Now the efforts are made to promote the goods or creating demand for the product.

Advertisement

Personal Selling

Publicity

Sales Promotion

SELLING:

Now the consumer comes to know the product in market which satisfies them. Now the firm
sells the product to customer which leads to satisfaction of ultimate consumer.

AFTER SALES SERVICES:

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Today Marketing Process not ending at selling but it includes too after sales services.

Eg. If any problem occurs after the purchasing of any electronic item, the seller will provide
the repair services free of cost.

CONSUMER FEEDBACK:

Consumer feedback provide information about the value of satisfaction, the consumer gets
from the product.

MARKETING CONCEPTS

 Production Concept:

o Emphasis on bulk production

o Economies of scale

o Low price & easily availability

 Product concept:

o Emphasis on quality & features of production

o No concern of customer needs

 Selling Concept:

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o Hard core selling

o Push the product in the market

 Marketing Concept:

o Identify consumer needs & produce accordingly

o Aim at after sales satisfaction

 Societal Concept:

o Concern for the society

o Social Responsibility

 Environmental Concept:

o Concern for the environment

o Every stage of marketing should be environmental friendly.

Production Concept:

Production concept is one of the oldest concepts in business. It holds that consumers will
prefer products that are widely available and inexpensive. Managers of production-oriented
businesses concentrate on achieving high production efficiency, low cost and mass
distribution.

Product Concept: (Marketing Myopia):

The product concept proposes that consumers favour products that offer the most quality,
performance or innovative features. Managers in these organizations focus on making
superior products and improving them over time.

Selling Concept:

The selling concept holds that consumers and businesses, if left alone, won’t buy enough of
the organization’s products. The organization must, therefore, undertake an aggressive selling
and promotion effort. Their aim is to sell what they make, rather then what the market wants.

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Marketing Concept:

The job is not to find the right customers for their products, but to find the right products for
their customers.

Dell computer doesn’t prepare a perfect computer for its target market. It provides product
platforms on which each person customizes the features he desires in the computer.

Societal Concept:

Responsibility towards society (customers, suppliers, competitors, Government, law,

employees, prospects and general public) must be fulfilled when doing the marketing of your
product.

Environmental Concept:

When making and marketing the product, it must be considered that surrounding environment
(land, water, power, and air) must not be polluted.

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 Sonia Sardana (MBA, PGDFM, UGC-NET, Ph.D(P))

OBJECTIVES OF MARKETING MANAGEMENT

The basic purpose of marketing management is to achieve the objectives of the business. A
business aims at reasonable profits by satisfying the needs of customers. In the light of this
statement, we can highlight the objectives of marketing management as follows:

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 Sonia Sardana (MBA, PGDFM, UGC-NET, Ph.D(P))

Creation of
Demand

Creation of
Goodwill & Customer
Public Image Satisfaction
Objectives
of
Marketing
Management

Generation
of Market
Profits Share

•Creation of Demand

The marketing management’s first objective is to create demand through various

means. Goods and services are produced to satisfy the needs of the customers.
Demand is also created by informing the customers the utility of various goods and
services.

•Customer Satisfaction

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The marketing manager must study the demands of customers before offering them
any goods or services. Selling the goods or services is not that important as the
satisfaction of customer’s needs. It begins and ends with the customer.

•Market Share

Every business aims at increasing its market share, i.e. the ratio of the sales to the
total sales in the economy. For instance, both Pepsi & Coke compete with each other
to increase their market share. For this, they have adopted innovative advertising,
innovative packaging, sales promotion activities, etc.

•Generations of Profits

The marketing department is the only department which generates revenue for the
business. If the firm is not earning profits, it will not be able to survive in the market.
Moreover, profits are also needed for the growth and diversification of the firm.

•Creation of Goodwill & Public Image

The marketing department provides quality products to customers at reasonable prices

and thus creates its impact on the customers. The marketing manager attempts to raise
the goodwill of the business by initiating image-building activities such as sales
promotion, publicity and advertisement, high quality, reasonable price, convenient
distribution outlets, etc

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MARKETING RESEARCH

Marketing Research is the systematic design, collection, analysis and reporting of date &
findings relevant to a specific marketing situation facing the company.

According to American Marketing Association:

Marketing Research is the systematic gathering, recording & analysis of data about problems
relating to marketing of goods and services from the producer to the consumer.

Marketing Research Process:

Define the problem & Research objectives

Develop the research plan

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Collect the information

Analyse the information

Present the findings

Make the decisions

1. Define the problem

 Relating to the Product:

o What is the commodity wanted by consumers?

o How much quantum do they want?

o What type of colour, feature & design for the commodity is expected?

o What type of packaging is desired by customers?

o What price should be of a commodity in view of customers?

 Relating to the Market:

o The scope of market for the commodity

o Selection of marketing channels for its distribution

o The extent & nature of competition in the market

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o The position of firm in comparison with other rivals in the market

 Relating to Advertisement:

o Customers’ interest to see the advertisement of the commodity & their preference

o The best media of advertising which can be impress the customers

o The impact of advertisement in the sale of commodity

2. Develop the Research Plan

Marketing research calls for developing the most efficient plan for gathering the needed
information.

The marketing manager needs to know the cost of the research plan before approving it.

Designing a research plan calls for decisions on the

o Data sources

o Research instruments

o Sampling Plan

o Contact methods

Data Sources:

o Primary Date

o Secondary Data

o Both

Research Instruments:

o Questionnaire Method

• Open-ended questionnaire

• Close-ended questionnaire

o Interview Method

Sampling Plan

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This calls for three decisions:

o Sampling Unit: Who is to be surveyed?

o Sampling Size: How money people should be surveyed

o Sampling Procedure: How should the respondents be chosen?

• Probability Sampling:

o Simple Random sampling

o Stratifies random sample

o Cluster Sample

• Non-Probability Sampling:

o Convenience Sampling

o Judgement sampling

o Quota sampling

Contact Methods:

Once the sampling plan has been determined, the marketing researcher must decide how the
subject should be contacted:

 Mail Questionnaire

 Telephone Interview

 Personal Interview

• Arranged Interview

• Intercept Interview

 Online Interview

3. Collect the information

In case of surveys, the major problems arise:

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• Some respondents will not at home.

• Some respondents refuse to answers the questions

• Some will give biased or dishonest answers

• Some interviewers will be biased or dishonest

4. Analyze the information

• The researcher tabulates the date & develops frequency distributions.

• The researcher will also apply some advanced statistical techniques to analyse the
collected information

5. Present the findings

The researcher should present findings that are relevant to the major marketing decisions
facing management.

6. Make the decisions

After knowing the findings & reasons of the problems faced by the organization, a marketing
manager can decide for the final solution to solve the problem

OBJECTIVES OF MARKETING RESEARCH

• To know about the Persons Who buy the Firm’s products:

Marketing research tries to find the nature of persons

o Who buy

o Frequency of their buying

o Sources of their buying

o Social status of customers

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• To find out the impact of Promotional Efforts:

Marketing research tells which method of sales promotion should be used. It also leads to
measure the effectiveness of advertising, pricing policies and channels of distribution.

• To know Customer response to a new product:

Marketing research is frequently used to know the opinion of the customers about the
satisfaction given by a new product. This helps in knowing the desired improvements in
quality, design, size, packaging, distribution methods etc.

• To forecast sates:

Marketing research helps in sales forecasting. The researchers make sales forecast on the
basis of the response from the customers and the distribution media.

• To study the goodwill of the firm in comparison with the competing firms:

This helps in revealing the important information regarding the moves of the competitors,
new products and substitutes entering in the market and their impact over the firm’s products.

IMPORTANCE/ADVANTAGES OF MARKETING
RESEARCH

• Forecasting

• Assessing Product Acceptance

• Rightful Promotion

• Understanding New Markets

• Suitability of Channels

• Overall Business Direction

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• Assessment of Middlemen

LIMITATIONS OF MARKETING RESEARCH

• Huge Expenditure:

Marketing research involves huge expenditure of money, efforts and time on the collection
and analysis of data. Small firms cannot afford marketing research.

• Bias in collecting Data:

The effectiveness of marketing research depends largely on the types of data or information
collected. If collected date is biased, whole marketing research will be failed.

• Unpredictable Human Behaviour:

Marketing research is mainly a study of the behaviour of human beings. The individuals may
not always give adequate and accurate data. Thus the results of the marketing research are not
cent percent accurate.

• Requires Intelligent Handling:

Marketing research is not an end in itself. It is a means to decision-making. It requires

competent and experienced executives or managers to use the results of marketing research.

• Supplementary, Not Substitute:

Marketing research is not a substitute for executive judgement. It only provides information
with the help of which executives can take decisions regarding product, pricing, promotion,
place, packaging etc.

• Requires Competent Researcher:

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If the investigators are not competent to collect right type of data and analyse it accurate,
there will be no utility of marketing research.

• No Time Gap allowed between Research & Its implementation :

There is generally a time lag between marketing research and the implementation of its
findings. During this period, business conditions might change making the market research a
futile exercise.

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ADVERTISING
Advertising is any paid form of non-personal presentation & promotion of ideas, goods or
services by an identified sponsor.

In developing an advertising program, marketing manager must always start by identifying

the target market and buyer motives.

Then they can make the five major decisions?

Mission : What are the Advertising objectives?

Money : How much can be spent?

Message : What message should be used?

Media : What media should be used?

Measurement : How should the results is evaluated?

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MISSION

Advertising Objectives:

Informative Advertising

Persuasive Advertising

Reminder Advertising

Reinforcement Advertising

MONEY

While deciding on the Advertising Budget, five specific factors to consider:

• Stage in the Product Life Cycle

o Introduction Stage:

o Maturity Stage:

• Market Share:

o High Market Share:

o Low Market Share:

• Competition

o Large number of competitors:

o Less number of competitors:

• Advertising Frequency (Number of Repetitions)

o High frequency:

o Low frequency:

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• Product Substitutability

o Well differentiated Brands:

o Less differentiated Brands:

MESSAGE

(Developing the advertising Campaign)

To develop a message strategy, advertisers go through three steps:

1. Message Generation & Evaluation

2. Message Development & Execution

3. Social Responsibility Review

MEDIA

After choosing the message, the advertiser’s next task is to choose media to carry it.

While choosing the media, marketing manager has to take decisions regarding various
concepts:

Deciding on Reach, Frequency & Impact:

o Reach: The number of different persons or households exposed to a particular media

schedule at least once during a specific time period.

o Frequency: The number of times within the specified time period that an average
person or household is exposed to the message.

o Impact: The quantitative value of an exposure.

Choosing Among Major Media Types:

The media planner has to know the capacity of the major media types to deliver reach,
frequency & impact.

o The Major Advertising Media:

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• Newspapers

• Television

• Radio

• Direct Mail

• Magazines

• Yellow Pages

• Newsletters

• Brochures

• Telephone

• Internet

Media planners make their choices by considering the following variables:

 Target audience media habits

 Product characteristics

 Message characteristics

 Cost

Selecting Specific Vehicles:

 Broadcast –TV—Serial—Timing(Beginning, Mid or End)

Deciding Media timing & Allocation:

The timing factor should consider three factors

 Buyer Turnover

 Purchase frequency

 Forgetting Rate

MEASUREMENT:

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(Evaluating Advertising Effectiveness)

Communication Effect-Research: (Pre-testing)

o Most advertisers try to measure the communication effect of an ad, i.e its potential
effect on awareness, Knowledge or preferences.

o Communication effect research seeks to determine whether an ad is communicating

effectively. It can be done before an ad is put into media.

o Major methods of pre-testing:

• Consumer Feedback Method

• Portfolio Tests

• Laboratory tests

 Sales Effect Research: (Post-testing)

Share of expenditure

Share of Voice

Share of Mind & Heart

Share of Market

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OBJECTIVES OF ADVERTISING
Informative advertising, seeks to tell the market about the product,
explain how the product works, provide information on pricing, and
Inform build awareness of both the product and the company. Such
objectives are normally pursued at the launch of a new product, or
re-launch / up-date of an existing product.

Here objectives are to encourage the target audience to switch

brands, make the purchase, and create a preference in the market
for the product as opposed to its competition. Advertising of this
nature is required in highly competitive markets, where a range of
Persuade
products compete directly with each other. In such circumstances
businesses often seek to differentiate their product through
Comparison Advertising – either directly or indirectly comparing
its product to that of its competitors.

Reminder Advertising, is used to maintain interest and awareness of

a well established product in the market, often in the latter stages of
its product life cycle. It is often used at the Point-of-Purchase to
Remind
remind consumers of the Brand. Such advertising is used by the
likes of Coca-Cola and other leading brands, to maintain their
position in the market.

Other Advertising Objectives

An objective is defined as "something toward which effort is directed: an aim, a goal."

There are many ways for the advertiser to achieve the goal of a good advertising foundation.
The advertiser should do his homework (setting objectives) before attempting to create ads.

PREPARING GROUND FOR NEW PRODUCT

New product needs introduction because potential customers have never used such product
earlier and the advertisement prepare a ground for that new product.

CREATION OF DEMAND

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The main objective of the advertisement is to create a favorable climate for maintaining of
improving sales. Customers are to be reminded about the product and the brand. It may
induce new customers to buy the product by informing them its qualities since it is possible
that some of the customers may change their brands.

FACING THE COMPETITION

Another important objective of the advertisement is to face to competition. Under

competitive conditions, advertisement helps to build up brand image and brand loyalty and
when customers have developed brand loyalty, becomes difficult for the middlemen to
change it.

CREATING OR ENHANCING GOODWILL: Large scale advertising is often undertaken

with the objective of creating or enhancing the goodwill of the advertising company. This, in
turn, increases the market receptiveness of the company's product and helps the salesmen to
win customers easily.

INFORMING THE CHANGES TO THE CUSTOMERS

Whenever changes are made in the prices, channels of distribution or in the product by way
of any improvement in quality, size, weight, brand, packing, etc., they must be informed to
the public by the producer through advertisement.

NEUTRALIZING COMPETITOR'S ADVERTISING

Advertising is unavoidable to complete with or neutralize competitor's advertising. When

competitors are adopting intensive advertising as their promotional strategy, it is reasonable
to follow similar practices to neutralize their effects. In such cases, it is essential for the
manufacturer to create a different image of his product.

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BARRING NEW ENTRANTS

From the advertiser's point of view, a strongly built image through long advertising helps to
keep new entrants away. The advertisement builds up a certain monopoly are for the product
in which new entrants find it difficult to enter.

INDUCE TRIAL.

When a product comes on the market, the advertising goal may be to get people to try it.
Every ad will be developed with this idea in mind. Benefits will be much in evidence in the
copy. Coupons may be used. Free offers are also quite popular. If a person tries the product
just once, the objective has been met.

SUSTAIN PREFERENCE.

Coca-Cola has advertised heavily in good times and bad times in order to maintain product
awareness as well as preference.

CHANGE HABITS.

Advertising can sell people on new ideas. Volkswagen sold the concept of the small car.
MasterCard and Visa sold the idea of one-card credit. Such examples illustrate that
advertising has been used to change popular thinking.

BUILD AMBIENCE.

Advertising can help to create a positive feeling about a business. MacDonalds campaign
with its Ronald McDonalds and friends as well as its young, attractive employees who look
so ready to serve the customer help to create a positive feeling about the company.
Ambiance, or environment in an ad, is crucial to any firm in the business of selling a service.
The pleasant atmosphere at the rent-a-car counter or the positive environment as projected by
the bank ad will do much to get people to try these business establishments. Of course, the
good environment must actually exist or customers will not return. Advertising can work to
build good ambiance, but such an effort can have long-term success only if there actually is a

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positive environment within the firm.

GENERATE SALES LEADS.

The objectives of these ads may be centered around obtaining the names of prospective
customers by offering free gifts, return coupon, etc.

INCREASE AWARENESS.

"Drugs can harm your baby before it is born." Such a campaign has as its objective to build
awareness of the problems addressed in the ads. Of course every ad, regardless of the stated
objective, should promote awareness in some form. Without awareness, the result could be no
sales.
INCREASE SALES.

For most organizations, an advertising objective that calls for an increase in sales is most
desirable. But is such an objective useful as the advertiser develops an advertising campaign?
n most cases, the answer is no.

MAJOR ADVERTISING MEDIA

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FUNCTIONS OF ADVERTISING
Advertising is a tick technique in the hands of a manufacturer, with the help of which he
performs many functions. Here is some main functions of advertising -

1. To differentiate the product from their competitors

2. To communicate product information

3. To urge product used

4. To expand the product distribution

5. Too increase brand preference and loyalty

6. To reduce overall sales cost

7. Creates new demands

TO DIFFERENTIATE THE PRODUCT FROM THEIR COMPETITORS

An important function of advertising is the identification function, that is, to identify a

product and differentiate it from others; this creates an awareness of the product and provides
a basis for consumers to choose the advertised product over other products this creates an
awareness of the product and provides a basis for consumers to choose the advertised product
over other products.

The identification function of advertising includes the ability of advertising to differentiate a

product so that it has its own unique identity or personality.

There are four additional ways to differentiate your offering from the competition and
increase your differentiation: leveraging the brand, innovating your service offering, as
well as designing product and packaging in a way that creates an aesthetic beyond the
functional. None of these methods are expensive. All are ways that can increase your

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perceived value to the customer and increase your market share.

Example:

GARNIER FRUTICS (shampoo) the shampoo bottle have the different color from all other
shampoo available in the shelf. The bottle of the shampoo is unique from all others.

Example:

apple laptops make them different from others as the WHITE color and logo of APPLE on
back of the screen.

TO COMMUNICATE PRODUCT INFORMATION

Another function of advertising is to communicate information about the product, its

attributes, and its location of sale; this is the information function. Product information
communicated to the customers in manner that meets their information needs. Most
consumers tend to discount the information in advertising because they understand that the
purpose of the advertising is to persuade. Making an advertising message believable is not
easy; though often it is sufficient to make the consumer curious enough to try the product.
Such curiosity is often referred to as interested disbelief. Advertisers use a variety of devices
to increase the believability of their advertising: celebrities or experts who are the
spokespersons for the product, user testimonials, product demonstrations, research results,
and endorsements.

Example:

Ponds age miracle, in that ad the celebrity HADIQA KAYANI is informing the consumers

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about the benefits of it. That how the old women can look younger by using it continuously.
It will make you fair cream plus it reduces freckles plus it can be used as a sun block as well
it will make you look young.

To urge product used

The third function of advertising is to induce consumers to try new products and to suggest
reuse of the product as well as new uses; this is the persuasion function.

The basic function of advertising is to provide constant reminders and reinforcements to

generate the desired behavior the advertiser wants from them. This is a particularly effective
function in the long run as reminders and reinforcements register in the consumers' minds,
becoming the base on which they shape their future decisions. Sampling in the way to urge
the product using.

Example:

Fair and lovely as we know that it will make a girl look fair and prettier in 4 weeks.

Example: Neutrogena acne treatment cream will remove your pimple is 24 hours.
NEUTROGENA say no to pimples!!

TO EXPAND THE PRODUCT DISTRIBUTION

When the consumer comes to know about the particular product from the advertisement
he/she wants to try that new product. They go to shops to buy the product; if the new product
is not available in a shop then the shopkeeper consults the distributor to make that product
available in his shop. It is basically to provide the product all over market. It is necessary to
make sure that product should be accessible to everyone. Availability of product effect the

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distribution.

Example:

Wateen telecom and Motorola Partner to Expand Distribution of Videoconferencing Product

Line in Pakistan. So as many people are getting to know about this facility they are running
towards the franchises to avail it. So for that Wateen should expand their distribution all
around the cities.

Accessibility is major factor for successful product

To increase brand preference and loyalty

Marketing is a moving thing. As your needs are changed your preferences are changed. 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; each product features and uses are written on the product.

Example:

99% girls who are not married will not look at the ad of pampers or any milk powder for
children but when they will get married their interest will automatically move towards such
ad'

BRAND LOYALTY

Brand loyalty is a long-term customer preference for a particular product or service. Brand
loyalty can be produced by factors such as customer satisfaction with the performance or
price of a specific product or service, or through identifying with a brand image. It can be
encouraged by advertising.

People often make purchasing decisions based on how a brand makes them feel emotionally

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rather than based on quality or other objective evaluations. If "Just Do it" strikes a chord
with an athlete, he'll buy Nike; the decision may have little to do with quality.

Example:

For instance, when one buys a tube of Colgate toothpaste and finds it ok, one will not have to
spend any valuable time on looking for other toothpaste brands.

To reduce overall sales cost

When a product is selling you have to teach the people about the product.

Like if we would advertise through newspapers, TV, broachers and internet, it would cater
huge sum of masses and if you do individually it would be more costly and time consuming.

Example:

Coke targets their consumers on a very large scale through mass media whereas Makka cola
advertise on smaller scale or go door to door to advertise their product.

CREATES NEW DEMANDS

Advertising have to create new demands they should educate the people about more and more
new things coming up in the market. Each year new products, including line extensions and
new brands are introduced into groceries and drugstores.

Example:

Wateen telecom is offering wireless internet chips, video conferencing and WIMAX services
as they are introducing new services in market its creating new demands.

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 Sonia Sardana (MBA, PGDFM, UGC-NET, Ph.D(P))

CRITICISM OF ADVERTISING

Despite many benefits drawn from advertising, it suffers from a severe criticism advanced by
different segments of society. It is not an unmixed blessing. It has been criticised on the
following grounds -

1. Increased price of the product :-

Advertising increases the cost of the product as the expenses on it form the part of the total
cost of the product. The increased prices are borne by the consumers. But it can't be denied
that advertising leads to large scale production which considerably reduces the total and per
unit cost of production. The consumer may pay less rather than higher.

2. Multiplication of Needs :-
Advertising creates artificial demand for the product and induces people to buy those
products which are not needed by them. On account of its repetition, it allures and creates a
desire in the minds of the people to posses an article not required by them.

3. Deceptive :-
Sometimes advertising is used as an instrument of cheating. In order to impress upon the
people false statements are given with regard to different virtues of a product. Fraudulent
means and deceptive practice are resorted to by various traders in order to sell their products.
All these thing adversely affect the public confidence in the advertising.

4. It Leads to Monopoly :-
Advertising sometimes leads to monopoly in a particular brand of a product. By investing
large sums in advertising of his brand, a big producer eliminates small producers of the same
product from the market and creates brand monopoly. This leads to exploitation of
consumers.
But in reality this argument does not hold good. The monopoly powers are temporarily
acquired by the manufacturer as they face strong competition by the rival producers of the

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 Sonia Sardana (MBA, PGDFM, UGC-NET, Ph.D(P))

same product. It often enables the small businessmen to compete with large concerns as well
as to start new business.

5. Harmful for the Society :-

Sometimes advertisements are un-ethical and objectionable. Most often, these carry indecent
language and virtually nude photographs in order to attract the customers. This adversely
affects the social values.

6. Wastage of precious national resources :-

A serious drawback levied against the advertisement is that it destroys the utiliz of certain
products before their normal life. The latest and improved model of a product leads to the
elimination of old ones. People like to posses the latest models of cars and discarding the old
ones which are still in useable conditions. This leads to wastage of national resources.

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