Advertising has become an important tool of modern marketing mix. In the present competitive world, advertising plays a very crucial role in the following manner.
(i) Promotion of Sales: Advertising promotes the sales of goods and services by informing and persuading the buyers to buy them. A good advertising campaign helps in winning customers and generating revenues.
(ii) Introduction of a New Product: It helps in introduction of the new products. A business enterprise can introduce itself and its product to prospective buyers. Advertising enables quick publicity in the market.
(iii) Support to Production System: Advertising facilitates large scale production. The business firm knows that it will be able to sell on a large scale with the help of advertising. Mass production will reduce the per unit cost of production giving benefits of economies of sale to the firm.
(iv) Support to other Promotion Tools: Advertising helps salesmen in their effort to persuade people to buy the product. It removes doubts and encourages consumers to buy the product. It is used to obtain support of dealers and boost sales efforts. It reaches even to those people to whom salesman can’t reach.
(v) Builds up a Public Image: It builds up the reputation of the company, creates brand loyalty. Advertising enables a business firm to communicate its achievement and its efforts to satisfy the need of the public.
(vi) Helps to Combat Intense Market Competition: Advertising helps in maintaining demand and creating potential demand for established products, by attracting a new group of customers thus its helps fighting competition and extending the market territories for the established product.