Explain FOUR advantages and TWO disadvantages of advertising – NABTEB QUESTION

Advantages of advertising are:

(i) Advertising arouses consumer’s interest in particular product advertised

(ii) It increases production as a result of increase in demand and leads to mass production

(iii) It leads to an increase in the quantity of goods supplied to the market as a result of increase in production

(iv) Consumers will benefit by paying less

(v) Advertising makes the existence of goods or the introduction of new line of product known to the public

(vi) Advertising leads to the profit of firms

(vii) The profit made by firms helps them to embark on expansion processes

(viii) Advertising creates employment opportunities which directly or indirectly helps a firm to expand

(ix) Successful advertising may lead to monopoly which makes a firm to derive the advantages of monopoly

(x) Advertising encourages competition among firms which leads to increase in the quality of goods and services

(xi) In a bid to advertise their products to greater members of people, firms sponsor selected radio and television programmes to the benefit of the people

(xii) Advertising contributes to increasing the general standard of living of the people through the introduction of products, reducing the cost of goods, increase in production of supply

(xiii) Mass media gain through increase in their revenue from advertisers

(xiv) Advertising helps to give security to employees of firms and confidence to entrepreneurs through increase in demand and supply

Disadvantages of advertising are:

(i) Advertising helps to increase the cost of goods sold

(ii) Consumers bear the brunt of advertising because producers and advertiser shift the cost of advertising to them in forms of high price of goods

(iii) Advertising contributes in making large firms to drive small firms out of production and business

(iv) Advertising leads to monopoly in the production and supply of some goods including essential ones

(v) It leads to scarcity of goods because few producers deliberately decrease their production when they must have created demands through advertising in order to make more profits

(vi) If advertising leads to the driving away of small firms from business, it helps in causing unemployment because many workers will be retrenched from the small firm that will fold up

(vii) Advertising contributes in denying the consumers their traditional rights of reproducing and picking the goods they want to buy

(viii) Some advertising through persuasion mislead the consumers to buy goods that they do not need thereby wasting their money

(ix) Advertising especially that of television interrupts nice programmes being watched by people

(x) Advertising is expensive and causes wastage by making consumers to buy almost every new products in addition to the old ones they have in their homes

(xi) Advertising encourages multiplication of brand names.

(xii) It encourages people to live beyond their means, by buying goods that they cannot afford on creditors hire purchase because advertising diverts peoples’ perception from the reality.