SUMMARY

Advertising is defined as non personal communication of information, usually paid for and usually persuasive in nature, about products, services, or ideas by identified sponsors through various media.
As a marketing tool, advertising several functions:
1. To identify products and differentiate them.
2. To communicate information about the product.
3. To induce the trail of new products by new users and to suggest repurchasing by existing users.
4. To stimulate a product’s distribution.
5. To increase product use.
6. To build brand preference and loyalty.
Aside from marketing, advertising may also serve a communication function, an education, an economic function, and a social function.

There are many different types of advertising. It may be classified by target audience (e.g., consumer, industrial), by geography (local, international), by the medium used (radio, television), and by its function or purpose (e.g., product advertising, non commercial advertising, direct action advertising).

Advertising began in early time when most people could not read or write. The post-World War II era has been marked by the growth of television advertising, intense marketing competition, and increased attempts to differentiate products through positioning strategies or other techniques.

The economic impact of advertising can be likened to the opening shot in billiards-a chain reaction that affects the company that advertises as well as its competitors, customers, and the business community.

On a broader scale advertising is often considered the trigger on the mass distribution system that enables manufacturers to produce the products consumers want in high volume, at low prices, with standardized quality. There is disagreement, however, about whether advertising encourages or discourages competition, adds value to products, makes products makes products more or less expensive, affects total consumer demand, and narrows or widens consumer choice, and whether it has any real effect on national business cycles.

While controversy surrounds most of these economic issues, the importance of advertising can best be understood by accepting the abundance principle. This states that, in an economy that produces more goods and services than can be consumed, advertising keeps consumers informed of their selection alternatives and helps companies to compete more effectively.
(Book Reference: Bovee/Srens, Richard D. Irwin, Inc., 1982, “Contemporary Advertising”).