Roles of Advertisement

Marshal distinguished two roles of advertisement namely the constructive role and the combative role, in his discussion he viewed advertisement to take the two roles whereby adverts would be constructive or destructive in nature.

Chamberlain (1933) discussed advertisement with reference to the cost of production, according to him there are two forms of adverts which include informative adverts and persuasive adverts, informative adverts provide information to consumers altering their wants by providing information about prices altering the demand elasticity of consumers, persuasive adverts on the other hand creates brand loyalty and for this reason also alters demand elasticity of products. Informative adverts will increase demand elasticity while the persuasive adverts will reduce demand elasticity.

Becker (1977) introduced the complementary view of advertisement. The complementary view is distinguished by economist from the persuasive view in that the complementary view states that adverts will exert pressure that leads to more social prestige to the consumers.

The consumer is affected as a result of advertising, from the paper advertising is a good that is sold together with the product because it is viewed as a selling cost that is included in the production cost, for this reason therefore advertising an raise prices or even lower them, adverts will raise prices whereby advertising cost will be added to the production costs and on the other hand they may lower prices where rival firms will provide information on lower price offers of good.

Advertising may also alter the quality of goods whereby firms may charge the same prices and

Roles of Advertisement

for this reason the firms may fail to incur expenses as a way of increasing quality of their goods. Advertising will also create a barrier to entry into an industry, this is based on the assumption that adverts will lead to scale economies that lead to barriers to entry into an industry. From the paper it is clear that advertising provides various functions including the provision of information, persuasion and also barriers to entry into an industry.