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Effect of Advertising on Demand for Goods

The advertising to which Americans (and consumers throughout the world) are subjected to on a daily basis represents a substantial investment by companies. Companies create advertising campaigns with the goal of promoting their products or services, and advertising is generally considered to have a substantial impact on demand. If this were not the case, it is unlikely that companies would commit the resources that they do to the process. This research examines some of the ways in which advertising can affect demand for goods and services, and evaluates specific examples of Web-based promotion and their apparent goals with regard to changing demand. In addition, a computer software company's marketing program is evaluated in light of its goals and the way in which it seeks to modify demand.

Advertising can act on demand by increasing the demand for a particular brand but not changing the demand for a good in general, it can increase demand for a good in general without focusing on a particular brand, and it can work on a "pull" or "push" level. Items which are marketed directly to consumers and which encourage them to seek out specific products or brands are "pulled" through the distribution channel by demand at the next level. Items which are marketed to channel participants farther up the distribution chain are "pushed" through the system. Trendy items and fad items are typically pull items while everyday so-called commodity items (such as soap) are push items (Neff, 1996, p. 25).

The goal of advertising and other promotional activities is to increase the quantity demanded for the goods or services in question. When advertising and marketing focuses on promoting a specific brand of a specific product type, the emphasis on product differentiation means that the company is trying to expand its market share from the existing market. This does not change the aggregate quantity demanded for the good (which would shift the d...

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Effect of Advertising on Demand for Goods. (1969, December 31). In Retrieved 06:54, February 23, 2017, from