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PLEKHANOV RUSSIAN ACADEMY OF ECONOMICS
INTERNATIONAL BUSINESS SCHOOL
Essay in Mikroeconomics
Advertising: economic and social costs and benefits
Student: Kostenko D.
Group: 5103
Supervisor: V.V. Gromyko
Dr.Sc.,Professor
Moscow 2013
Advertising: economic and social costs and benefits
Advertising is the most important tool in the marketing of products and services. Companies all over the world universally accepted this fact. The expenses on advertising are considered to be a profitable investment that reaps profits both in the long and short run. Businesses that keep on advertising regardless of rise or fall in the economic times get a competitive advantage over those that cut their ad budgets. There are many benefits of advertising which include:
1.Information to the customer.?Advertisement about new products keeps the customer informed about the new developments in the industry. They help to provide them information regarding the newly launched products.
2.Takes care of customers.?Advertising takes care of customers. It helps in holding on to the loyal customer, decreasing the number of lost customers and enlisting new customers. Thus the overall effect of advertising is increase in the number of customers that will gradually become loyal to the product.??
3.Improves the sale of product.?Advertising facilitates a noticeable increase in the sale of the product. It thus helps reduces per unit cost of the product and help the businesses to earn profits.??
4.Alters the attitudes of people.?An effectual advertisement results in a swift change in the attitudes and habits of the people.??
5.Direct communication.?In earlier days customers believed on the opinions of retailers, when making the purchases of products. With the rapid spread of media and advertising to every nook and corner of the world, people have become aware of the various products that are available in the same category and the freebees and benefits of purchasing them. So the...
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