In the business world, advertising has been serving an important role for a long time. It promotes competition and lowers the costs of offering product information to consumers.
Whether the goods or services your organization offers, a custom banner or a new App, you can not just rely on word-of-mouth to increase your sales. You are supposed to contemplate long-term advertising, which can assist your march your business successfully.
Which one can increase sales in the long term, advertising or price cut deal?
In the Confessions of an Advertising Man, Father of Advertising--David Ogilvy identified four problems that threatened the survival of advertising, one of problems is that package goods manufactures spend too much money on price-off deals and not enough on solid advertising.
Through tracking consumers’ buying habits for 25 established grocery brands in four countries for up to three years, Andrew Ehrenberg, who is a statistician and marketing scientist, he found that, although sales were higher during a price cut, when it was withdrawn they soon fell back to earlier levels. The unexpected explanation for this was that almost all the customers buying the discounted product had tried it before. It seems that brands are built in other ways: price cuts are simply a gift to loyal customers.
Why does advertising bring more profits for companies than price–cut deals?
Just as what David Ogilvy said, every advertisement is part of the long-term investment in the personality of the brand. In comparison price-off deals, advertising brings more profits to companies or organizations in the long term.
Good advertising helps to create awareness of goods, products and services in general public and appeal potential buyers, since potential consumers are more interested in buying those brands which are advertised in an attractive way.
The importance of advertising
1 Appeal potential customers: One of the advantages of advertising is that it will capture audiences’ attention to a product or service. The possible that potential customers invest in your product will increase with the effective advertising.
2 Keep current customers: An ongoing advertising campaign is essential in reminding your existing customer that you are still around, said Kenneth Roman and Jan Maas, authors of “How to Advertise.”
Advertising is also necessary to connect to present consumers and remind them that they choose the right organization. Existing customers can also be aware of the new character of products or services.
3 Promotion: The main aim of advertising is to raise your target customers’ awareness of your products or services with which they may be unfamiliar and inform audience about your product character, what they can benefit from your products or services and why they should choose you.
The good advertising can assist you to succeed in any things, ranging from a new product you are selling, a commercial event you are holding to a political campaign you are managing.
4 Comparisons: Audiences are capable to make comparison and selection from extensive choices with advertising easily since most important information or competitive edge of products is included in advertising.
5 Reinforce brand and reputation: Not only is branding a way of identifying and distinguishing a product or service from other, but also has evolved into communicating an actual promise.
Advertising helps to create a good image in the mind of prospects and build a preference for the brand. Repeating advertisement improves the brand image. When making a purchase decision, most people tend to choose the advertised brand because they think that a company’s brand and reputation can be as important as price or product performance. With good corporate image or reputation, customers can convince themselves that they can obtain reliable service and high quality products from the organization.
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