Advertising(unit16)

There is a difference among promotional tools such as advertising, personal selling, word-of-mouth and propaganda. Advertising is a paid, non-personal sales communication through various media directed at a large number of potential buyers. Advertising is often designed and managed by advertising agencies through advertising campaigns. Personal selling is face-to-face communication and does not go through media; thus it is not advertising. Word-of-mouth is not a form of advertising because it does not go through media; it is not paid for.

Two basic types of advertising are product and institutional (corporate). Product advertising involves selling a good or service. Institutional or corporate advertising involves promoting a concept, idea, or philosophy, or the goodwill of an industry, company, organization, or government body to generate its positive publicity

Both product and institutional advertising can be subdivided into three categories according to the purpose: to inform, to persuade, or о remind.

Informative advertising, intended to build initial demand tor product, is used in the introductory phase of the product life-сycle. Persuasive advertising attempts to improve the competitive status of a product institution, or concept. It is used in the growth and maturity stages of the product life-cycle. Reminder-oriented advertising, often used in the late maturity or decline stages of the product life-cycle, tries to remind people of the importance and usefulness of a product, concept, or institution.

The most important and largest of the advertising media are newspapers, magazines, television, radio, direct mail and outdoor advertising. People have the false impression that advertising is not very informative. Newspapers, for example, have full information about products, prices, features and more. Direct mail (leaflets, booklets and other printed matter) is also informative and a tremendous shopping aid for consumers.

The public benefits greatly from advertising expenditures. First, we learn about new products, new features, sales items, and more. We also benefit from free radio and TV and subsidized newspapers and magazines. In short, advertising not only informs us about products but pays for us to watch TV and get the news from magazines and newspapers.

Different kinds of advertising are used by various organizations to reach different classes of potential buyers. Some major classes include:

Retail advertising - advertising to consumers by various retail stores such as supermarkets.

Trade advertising - advertising to wholesalers and retailers by manufacturers to encourage them to deal with their products.

Industrial advertising - advertising from manufacturers to other manufacturers.

Wholesaling(unit17)

Wholesaling comprises all transactions in which the purchaser intends to use the product for re-sale, for making other products or for general business operations. Wholesaling establishments are engaged primarily in selling products directly to industrial, reseller (e.g. retailers), government and institutional users.

A wholesaler is an individual or organization engaged in facilitating and expediting exchanges that are primarily wholesale transactions.

Wholesalers generally fall into such categories: merchant wholesalers; commission merchants, agents, and brokers; and manufacturer's sales branches and offices.

A merchant wholesaler is a middleman that purchases goods in large quantities and then sells them to other wholesalers or retailers and to institutional, farm, government, professional, or industrial users. Merchant wholesalers usually operate one or more warehouses where they receive, take title to, and store their goods. They are sometimes called distributors or jobbers.

Merchant wholesalers may be generally classified as full-service wholesalers or limited-service wholesalers, depending on the number of services provided. This category includes: general merchandise wholesalers, limited-line wholesalers and specialty-line wholesalers.

In contrast to full-service wholesalers, limited-service wholesalers assume responsibility for a few wholesale services only. This category includes cash-and-carry wholesalers, truck wholesalers, rack jobbers, drop shippers and mail-order wholesalers.

Commission merchants usually carry merchandise and negotiate sales for manufacturers, but they do not take title to the goods they sell. They are generally paid commissions by the manufacturer or producer they represent.

An agent is a middleman that facilitates exchanges, represents a buyer or a seller, and often is hired permanently on a commission basis.

A broker is a middleman that specializes in a particular commodity, represents a buyer or a seller, and is likely to be hired on a temporary basis. They are generally paid commissions by the sellers.

A manufacturer's sales branch is, in essence, a merchant wholesaler that is owned by manufacturer. Sales branches carry stock, extend credit, deliver goods, and offer help in promoting products.

A manufacturer's sales office is essentially a sales agent that is owned by a manufacturer. Sales offices may sell not only the products of the owning firm but also certain products of other manufacturers that complement their own product line.