advertising

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Advertisement

Any communication designed to raise awareness and produce a desired effect. An advertisement may occur through any medium, be that print, broadcast, imagery, or even word of mouth. Many advertisements are basic; for example, there may be a radio announcement to "buy X." Others are more complex, encouraging purchase by stating a product has a better price and/or better quality. Many advertisements are intended to entertain. They are an integral part of marketing. Informally, an advertisement is called an advert or an ad.

advertising

A means by which a seller of a BRAND of good or service attempts to increase its sales by communicating with BUYERS, informing them of the nature and attributes of the brand and persuading them to buy it in preference to competitors' brands. Advertising comprises part of a firm's PROMOTIONAL MIX and is undertaken in a variety of ways, including the use of mass MEDIA channels such as television, national newspapers and magazines, posters, websites etc., and more targeted approaches through ‘special interest’ magazines and trade journals, and regional and local newspapers.

Although some advertising is largely concerned with providing buyers with information about the product, the majority of advertising is ‘persuasive’ in intent. Persuasive advertising aims to encourage consumers to purchase products, and the skill of advertising copywriters lies in designing ADVERTISEMENTS which are visually attractive and which appeal to deep-seated consumer motivations, both physical and psychological. If advertisements appeal sufficiently to consumer motives they will encourage repeat buying of the product, thereby establishing BRAND LOYALTY and increasing or maintaining the firm's MARKET SHARE.

The selection of the advertising medium will depend upon the MARKET or market segment which is being targeted (see MARKET SEGMENTATION) and the relative costs and effectiveness of using different media. For example, in respect of specialized INDUSTRIAL BUYERS advertisements may be placed in appropriate trade/professional journals. On the other hand, if large numbers of final consumers are being targeted, it may be more cost-effective to use the mass media which, although more expensive in absolute terms, actually costs less per potential customer reached.

Advertising is an important part of a firm's MARKETING MIX which seeks to differentiate its brand of product from competitors' offerings. See ADVERTISING COPY, ADVERTISING COVERAGE, ADVERTISING EFFECTIVENESS TEST, ADVERTISING FREQUENCY, DIRECT MARKETING, PRODUCT DIFFERENTIATION, COMPETITIVE ADVANTAGE, ADVERTISING CAMPAIGN, ADVERTISING OBJECTIVE, BUYER BEHAVIOUR, PRODUCT IMAGE, ADVERTISING STANDARDS AUTHORITY, CONTROL OF MISLEADING ADVERTISEMENTS REGULATIONS 1988.

Advertisingclick for a larger image
Fig. 3 Advertising. (a) The static market effects of advertising on demand (D). The profit maximizing (see PROFIT MAXIMIZATION) price-output combination (PQ) without advertising is shown by the intersection of the marginal revenue curve (MR) and the marginal cost curve (MC). By contrast, the addition of advertising costs serves to shift the marginal cost curve to MC1, so that the PQ combination (shown by the intersection of MR and MC1) now results in higher price (PA) and lower quantity supplied (QA ).

(b) The initial profit-maximizing price-output combination (PQ) without advertising is shown by the intersection of the marginal revenue curve (MR) and the marginal cost curve (MC). The effect of advertising is to expand total market demand from DD to DADA with a new marginal revenue curve (MRA). This expansion of market demand enables the industry to achieve economies of scale in production, which more than offsets the additional advertising cost. Hence, the marginal cost curve in the expended market (MC1) is lower than the original marginal cost curve. The new profit maximizing price-output combination (determined by the intersection at MRA and MC1) results in a lower price (PA) than before and a larger quantity supplied (QA).

advertising

a means of stimulating demand for a product and establishing strong BRAND LOYALTY. Advertising is one of the main forms of PRODUCT DIFFERENTIATION competition and is used both to inform prospective buyers of a brand's particular attributes and to persuade them that the brand is superior to competitors’ offerings.

There are two contrasting views of advertising's effect on MARKET PERFORMANCE. Traditional ‘static’ market theory, on the one hand, emphasizes the misallocative effects of advertising. Here advertising is depicted as being solely concerned with brand-switching between competitors within a static overall market demand and serves to increase total supply costs and the price paid by the consumer.

See BARRIERS TO ENTRY, MONOPOLISTIC COMPETITION, OLIGOPOLY, DISTRIBUTIVE EFFICIENCY.

This is depicted in Fig. 3 (a). (See PROFIT MAXIMIZATION).

The alternative view of advertising emphasizes its role as one of expanding market demand and ensuring that firms’ demand is maintained at levels that enable them to achieve economies of large-scale production (see ECONOMIES OF SCALE). Thus, advertising may be associated with a higher market output and lower prices than allowed for in the static model. This is illustrated in Fig. 3 (b).

References in periodicals archive ?
The Authority also considered that the advertiser's name should have been printed more prominently to make it clear that the letter was advertising material. The Authority concluded that because the insert was used in publications that had content for both adults and children, it would be read by children and could encourage them to copy the language used.
The advertising materials can thus be seen and read at a glance from all sides without having to turn them around.
The framework agreement should cover the production, storage and delivery of, in particular, the following advertising materials: 1) scatter advertising up to special advertising materials; 2) valuable advertising material for special target groups.
the following activities are included in the scope of the order under lot 2 "production and supply of materials - billboard, Plate, Roller bearings, Pens and flash memory: - activity 1 "design / layout of advertising materials", - activity 2 "materials delivery - billboard, Plate, Roller, Pens and flash memory".
20746 BGN without VAT Eligibility Criteria : The estimated value of the contract is BGN 20 746 (twenty thousand seven hundred forty six levs) excluding VAT, in separate positions as follows: Lot 1 - Preparation and distribution of information, advertising materials, signboards, publications in printed and electronic media, broadcasting in radio and television media - BGN 17 414 excluding VAT; Lot 2 - "Preparation, prepress, printing and distribution of newsletter" - BGN 3 332 excluding VAT.
ISLAMABAD:Driving across the federal capital, one can behold the flags, posters, buntings and other advertising materials of different political parties trimmed over the walls and electric poles to herald the arrival of general elections.
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The State Antimonopoly Regulation Agency carries out control over advertising activities and monitors advertising materials. However, at present, the law lacks the concept of monitoring advertising materials.
* Let the licensor veto goods and services and/or use of promotional and advertising materials it deems to be below standard (Model, Sec.
The Business-Inform Agency invites Russian and international manufacturers and suppliers of printing equipment and supplies to place their informational and advertising materials in Printing Supplies Catalog #32, 2014.
distributed direct-mail advertising materials of its clients to residential addresses.
We always try to position advertising materials in locations that are as acceptable to the local community as possible and would like to apologise to anyone who feels that this site was inappropriate."

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