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Advertising And Sales - Essay Example

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Advertising And Sales

For this purpose, companies consistently get involved in conducting various advertising and marketing activities so as to enhance and sustain their existing and potential customer base. These activities not only demand substantial efforts but also magnanimous expenditures incurred in carrying out these efforts, quite eminent within the financial statements of these companies.This paper presents an insightful investigation of the effectiveness and contribution of advertising towards the success of a company's sales. It manifests if at all the advertisement expenditures, exclusively lead to the sales elevation; or these efforts need to be blended with other suitable marketing activities so as to derive much better outcomes. It indicates the impact of advertising on company's sales margin, while establishing facts from the theoretical material and draws out the potency of marketing activities in combination with proper advertisement towards the achievement of sales and profit targets.The effectiveness of advertising in precipitating a company's sales success in relation to the other elements of marketing strategies happen to be matter of serious concern in today's business domain. Corporations tend to squander millions on advertising along with other marketing activities in an anticipation to enhance their sales and profitability. If advertising alone can lead to the company to improved sales, new customer attainment and existing customer retention successfully, then it could subsequently save a lot of company's funds and efforts exerted in conducting other marketing activities.

Aaker (1991) states that the purpose of advertising is to distinguish a company's product from others in the market hence establishing the product's brand equity. The author signifies the concept of advertising with product differentiation and establishment of brand equity. Merino Srinivasan and Srivastava, (2006, p12) confirm this point as, "high brand equity firm may be able to differentiate themselves effectively in competitive environments, achieving both high prices and high customer loyalty increasing and stabilizing its sales revenues and profits". Here also, high brand equity and product differentiation has been associated with each other for the sales success led by advertisement expenditures.

It highlights that advertising can only lead to increased sales and profits once it is able to distinguish a company's product in the market among its competitors and establish its strong brand equity. These two conditions will be accomplished only when the advertising efforts executed on the part of the company is effective enough to capture the attention of consumers and make them aware of the superior value that the product offers to them. Lumpkin, Dreoge and Dess (2002, p330) propound that "firms pursuing a differentiation strategy offer products or services that are viewed as unique and valued by customers. They achieve differentiation advantages when price premiums exceed the extra costs incurred in being unique". Hence, if advertising is to lead to sales success, it has to be effective and deliver the message in the best possible way. Consequently, for an advertising effort to be effective, it should consider the value strategy that the company delivers to its customers.

Merino, Srinivasan and Srivastava, (2006, p10) highlight the impact of advertising expenditure in a dynamic environment with changing consumer tastes and behaviour patterns with regard to purchasing. The authors state, "firms with high brand equity consistent with higher advertising expenditure may achieve lower marketing costs (customer acquisition and retention costs), ...Show more

Summary

Every company strives to enhance the volume of its existing and potential customers so as to elevate its selling capability. This requires vigorous efforts on the part of the company and associated personnel to induce the customers to buy more…
Author : lboehm
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