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Advertising is any paid form of non personal
presentation and promotion of goods, services & ideas
by an identified sponsor.
Advertising is a general phrase used for the
announcements made by sellers to promote the sales
of their products.

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Role of advertising in the economy

Making consumer aware of products and
Providing consumers with information to use
to make purchase decisions
Encouraging consumption and fostering
economic growth

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Economic impact of advertising

Effects on Consumer Choice
-Brand Loyalty
Effects on product costs and prices
-Advertising as an expense that increases the cost of
-Increased differentiation
Effects on Competition
-Barriers to entry
-Economies of scale

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Economic benefits of advertising

It is informative
It builds brands
It supports the media
It reduces costs
It facilitates the introduction of new products
It provides employment opportunities.

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Economic aspects
Making Consumers Aware of Products and Services
Providing Consumers With Information to Use to
Make Purchase Decisions
Encouraging Consumption and Fostering Economic

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Effects on Consumer Choice

Brand Loyalty

Effects on Competition
Barriers to entry
Economies of scale

Effects on product costs and prices

Advertising as an expense that increases the cost of
Increased differentiation

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Social advertising
It is a process for influencing human
behavior on a large scale using market
principles for the purpose of social benefit
rather than for commercial profit

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Social aspects of advertising

Advertising as a part of firms marketing effort
operates in the society. It has to therefore follow
the social norms.
Key areas of debate regarding society and
advertising are:
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Deception: it refers not only to the information

content in advertising but may also arise from
misplace emphasis in presentations.
According to federal trade commission of the
USA Advertising as a whole must not
create a misleading impression although every
statement, separately considered, may be
literally truthful
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Manipulation :- The freedom of choice of

consumers is restricted by the power of
advertising since it can manipulate buyers into
making a decision against their will or interest.
Manipulation is done through emotional appeals.
These companies can utilize advanced and very
scientific advertising techniques and thus make
an impression on consumers.

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Sometimes ads are offensive, tasteless,

irritating, boring and so on.
Sources of distaste
Sexual Appeals
Shock advertising

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Some examples of the Advertisements with social


Grow-more-trees advertisements
Drink milk
Eat healthy food, eat eggs
Mothers milk is best for the baby
Say no to drugs every time
Get your child vaccinations in times

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Helps in eradication of social evil
Helps in change of attitude of the people of
Helps change /improve reputation of a

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Ethics is a choice between good and bad, between right
and wrong.
Advertisement truth is to be viewed from consumers
point of view .
Advertisements should not be indecent and obscene.

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Issues in Advertising ethics

Puffery and Deception
Puffery refers to exaggerated claim of a products
superiority or the use of subjective or vague statements
that may not be literally true.
Deception is when the consumer is led to believe
something which is not true

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Some call for advertising to children be curtailed .

Others would ban alcoholic beverage advertising.
Marketers must carefully draw the line between
advertising and entertainment.

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Key areas of debate regarding ethics and

advertising are:
Truth in advertising
Advertising to children
Advertising controversial products

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Truth in Advertising
Deception is making false or misleading
Puffery ( commercial exaggeration ) is legal.
Cannot legislate against emotional appeals

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Advertising to ChildrenIssues
Advertising promotes superficiality and
materialism in children.
Children are inexperienced and easy prey.
Persuasion to children creates child-parent

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There are still some products that are not acceptable by
majority of consumers.

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Stereotyping is presenting a group of people in an
unvarying pattern that lacks individuality.
- Women in advertising.
- Senior citizens.

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Advertising too has ethical values.
Advertising communication is a mix of art and
facts subservient to ethical principles
In order to be consumer oriented it should be
truthful and ethical. Should not mislead the
consumers. If so happens, credibility is lost.
Advertisement truth is to be viewed from
consumers point of view not in narrow legalistic
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Advertising should not be indecent and obscene.

Its a social process ,must honor time-tested
norms of social behavior and should not affront
our moral sense.
In order to enforce ethical code in INDIA we
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It is inspired by a similar code of the Advertising
standards authority(ASA),UK.
It seeks to achieve the acceptance of fair
advertising practices in the best interest of the
ultimate consumer.
To ensure the truthfulness and honesty of
representation and claims made by
advertisements and to safe guard against
misleading advertising.
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-To ensure that advertisements are not offensive

to generally accepted standards of public
-To safeguard against indiscriminate use of
advertising for promotion of products which are
regarded as hazardous to society or to
individuals to a degree or of a type which is
unacceptable to society at large.
-To ensure that advertisements observe fairness
in competition so that the consumers need to be
informed on choices in the market place and the
canons of generally accepted competitive
behaviour in business are both served.
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Is advertising wasteful???
The role of advertising is to inform people that a
product or service exists has been well
People do need such information and is passed
onto them through advertising.
Advertising is not wasteful, unless it really
contains no information or tells the consumers
something which they already know.

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Advertising stimulates the economy by informing
many prospects about available products and
services at a relatively low price. As a result,
advertising helps advertisers decrease costs and
increase profits, which can be distributed to more
capital equipment and job offerings.
Furthermore, competitive advertising activities help
consumers compare several brands with a lot of
information, so it brings about the improvement of the
overall product quality and the failure of inferior
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We conclude that advertising is

economically gainful but extend varies
from one product to other and market
situation ,competition and economic
milieu-whether advertising is done in a
mixed economy, a market economy or a
controlled economy

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