THE EFFECT OF ADVERTISEMENT ON HOW MUCH THE CONSUMER WILL PAY FOR A PRODUCT
INTRODUCTION : In the globalised world were consumers are conspicuously consuming a variety of goods as available to their knowledge through developed mass communication systems like advertisement the effect of advertisement as a means of determining the consumer demand for a product or more specifically how much the consumer is ready to day for a product is highly significant and it can be effectively be analysed by scrutinising the terms advertisement and consumer demand and the relationship between the two .
“An advertisement is a paid –for communication intended to inform and/or persuade one or more people .”-Winston Fletcher
To further deconstruct this definition it’s individual units have been discussed by Fletcher , “paid for” if no cost is involved in advertisements it does not amount to a advertisement , secondly cost is not the only decisive factor , the cost spent …show more content…
PRICE ELASTICITY OF ADVERTISING:
The concept of advertising elasticity of deandrefers to how advertising a product will affect the quantity sold, according to the book “ManagerialEconomics” by Arun Kumar and Rachna Sharma .
The main proposition is that increase in consumer demand through advertising can cancel the decrease in demand through due to price increase.
This is a measure of an advertising campaigns effectiveness in generating new sales. It is calculated by demanding the percentage change in quantity demanded by the percentage change in expenditure. Another valuable derivations from this formula can be reached at by combining AED and price elasticity of demand
INTRODUCTION : In the globalised world were consumers are conspicuously consuming a variety of goods as available to their knowledge through developed mass communication systems like advertisement the effect of advertisement as a means of determining the consumer demand for a product or more specifically how much the consumer is ready to day for a product is highly significant and it can be effectively be analysed by scrutinising the terms advertisement and consumer demand and the relationship between the two .
“An advertisement is a paid –for communication intended to inform and/or persuade one or more people .”-Winston Fletcher
To further deconstruct this definition it’s individual units have been discussed by Fletcher , “paid for” if no cost is involved in advertisements it does not amount to a advertisement , secondly cost is not the only decisive factor , the cost spent …show more content…
PRICE ELASTICITY OF ADVERTISING:
The concept of advertising elasticity of deandrefers to how advertising a product will affect the quantity sold, according to the book “ManagerialEconomics” by Arun Kumar and Rachna Sharma .
The main proposition is that increase in consumer demand through advertising can cancel the decrease in demand through due to price increase.
This is a measure of an advertising campaigns effectiveness in generating new sales. It is calculated by demanding the percentage change in quantity demanded by the percentage change in expenditure. Another valuable derivations from this formula can be reached at by combining AED and price elasticity of demand