ROLE OF

ADVERTISING IN
ECONOMIC
DEVELOPMENT OF
INDIA
BY:
PRAGATI SRIVASTAVA
BBA
Sunbeam Women’s College,
Varuna
 ON ECONOMIC
DEVELOPMENT OF INDIA
POSITIVE EFFECTS OF ADVERTISING IN
ECONOMIC DEVELOPMENT
Effect on Production Cost, Distribution Cost and Prices

Effect on Demand

Effect on Competition

Effect on Business Cycle

Effect on National Income

Effect on Employment

Effect on Standard of Living

1. Effect on Production Cost, Distribution
Cost and Prices

Effect on Production Cost

Effect on Distribution Cost

Effect on Price
 2.Effect on Demand
In case of new products, advertising
creates primary demand by educating the
audience regarding uses of product. Even
in case of existing product, the audiences
are made to realise the need of product
through rational and emotional appeals.
 3.Effect on Competition
Advertising promotes competition among
different brands of same product. The
company offering good quality products
at reasonable price often gets advantage
in the competition.
4.Effect on Consumer Choice

Advertising gives information about

various brands, products available in the
market, their features, price, place or
availability, etc. Consumer can make
comparative study of all such choices to
purchase most suitable product.
 5.Effect Business Cycle
In period of recession, advertisers
increase their ad-expenditure to revert
their falling sales. In boom periods,
advertisers curtail their ad-expenses as
they are able to sell their entire
production with less advertising efforts.
6.Effect on National Income

Advertising promotes demand, increases

productive and industrial activities,
promotes growth in agriculture, etc. All
this results in increase in national income.
 7.Effect on Employment
Advertising has created both direct and indirect
employment to various person in the society. It
provides direct employment to person involved
in jobs like- copywriters, artists, graphic
designers, painters, singers, etc. Indirectly, it
creates employment avenues as it creates
demand, stimulates production and thus
promotes industrial activities.
8.Effect on Standard of Living

Advertising has reduced the cost of

production and distribution,
promoted competition and thus
resulted in price reduction. It has
promoted demand.
NEGATIVE EFFECTS OF ADVERTISING
ON ECONOMIC DEVELOPMENT

1.Advertising is not productive

2.Advertising simply multiplies

the needs
3.Advertising increases the cost of
goods
Monopoly argument

Restricts entry of new business units

Wastage of natural resources

THANK YOU!