Strategic Marketing: Advertising Impact, Sales Predictions, & Consumer Insights

Posted on Aug 25, 2025 in Economy

Scope and Functions of Advertising

The scope of advertisement is very wide. To understand its scope, it is beneficial to first study the following functions of advertising:

Communication: Information about the producer, product, an idea, and service is transmitted or communicated from the sponsor to potential customers.
Creating/Building an Image: Effective advertisements, through their communication, create a good image in the minds of people about the company, product, and service.
Brand Loyalty: When a customer buys an article, they often have doubts and confusion about its quality. Advertisement helps significantly in such situations. By minimizing doubts and informing about the product’s quality and other features, advertising helps customers to buy the product repeatedly. When a customer regularly buys the same company’s product, we can say that there is brand loyalty.
Increase in Sales: Publication and transmission of effective advertisements on a regular basis attract customers, which helps in increasing sales.

After studying the above-mentioned functions, we can conclude that advertising performs various functions for the producer. Today’s world is considered an era of advertising. In every field, advertising is used on a large scale; we can hardly find any field where it is not utilized. All organizations, including manufacturing and service sector industries, make use of advertising. We find advertisements about schools, colleges, and even those motivating young generations to take up defense as a career. This includes the agriculture sector, sports, and more. To inculcate good habits or activities, or to communicate an idea to the masses, advertising is used very effectively. In short, due to its effectiveness, advertising covers every field, making it an inseparable part of our lives.

Advertisement and Publicity: Key Differences

Many times, the words ‘advertisement’ and ‘publicity’ are used synonymously. However, there is a distinct difference between these two, as outlined below:

Meaning: Advertisement is a paid form, deliberately carried out as a non-personal presentation about ideas, goods, and services. Whereas, publicity involves spreading important news about a service, goods, organization, or person, without paying anything for such news.
Scope: Advertisement is a narrow concept; its coverage depends upon the selection of the medium. But publicity is a broader concept.
Price/Cost: Payment is made for the purchase of time, space, etc., in advertisement. On the other hand, it is not required to pay anything in publicity.
Loss: If an advertised message is ignored, there is a loss to the advertiser. Whereas, there is no loss to anyone even if the published message is ignored.
Sponsor: The sponsor can be identified in the case of advertisement, whereas it is very difficult to trace out the originator of publicity.
Appeal: There is an appeal to buy a product in an advertisement; such an appeal is not found in the case of publicity.
Control: There is a direct control of the sponsor over advertisements, whereas there is nobody’s control over publicity.

In summary, while organizations or individuals are involved, it is very difficult to identify or trace the originator of publicity, and there is no direct control over it, unlike advertisement.

Advertisement and Public Relations

Public relations refers to communication made with the general public. Business organizations, with systematic planning, continuously try to establish and maintain contact with the general public or any particular section of people. The difference between advertisement and public relations can be studied with the following points:

The objective of an advertisement is to increase sales and, by that way, to increase future profits. On the other hand, the objective of public relations is to create a good image of the company in the minds of society.
Advertisement proves to be more effective in the case of visible products. Whereas, for products that are invisible (such as banks, insurance, etc.), public relations can be used more effectively.
Public relations enhances the company’s image; by capitalizing on this and with the effective use of advertisement, the company’s profits can be increased.
People generally have more trust in public relations than in advertisement.

Disadvantages of Advertising

After studying its advantages and components, we will now examine the disadvantages of advertising:

Goods and Services Become Costlier: Companies spend a lot of money on advertisements. That money is ultimately recovered from the customers. Therefore, to recover the money, the prices of goods and services are increased, making them costlier.
Helps in Creating Monopoly in the Market: Due to attractive and repetitive advertisements, customers get trapped in the company’s net. The customer regularly buys the advertised product, which reduces the demand for other products. This results in a reduction in competition, and ultimately, the advertising company starts heading towards a monopoly, which is very harmful to society.
Wastage of Money: Many times, even if goods are not required, they are purchased due to the influence of advertisements (for example, soft drinks, chocolates, etc.). At the same time, a huge amount is spent on the preparation and publicity of an advertisement. If such a published advertisement is not seen by the potential customer, then that money also gets wasted.
Disappointment: Many advertisements contain exaggerated claims from the advertisers. These claims often do not turn into reality. Customers, influenced by flowery and attractive advertisements, purchase the products. But after use, they realize that the advertised satisfaction was not received, leading to disappointment.
Increased Use of Vulgarity: Many times, advertisers use vulgar pictures or movements in advertisements. Such use is increasing day by day, creating a bad impact on the minds of children.

Planning Advertising Promotion Campaigns

It is clear from the discussion that an advertising campaign is different from a single advertisement. While determining an advertising campaign, the following factors play a vital role:

Geographic area
Features / Market structure
Psychology of the buyer, etc.

While deciding the campaign, various factors at the organizational level, market level, and customer level are carefully studied. At the organizational level, the following factors are considered:

Complete advertising budget
Availability of media
Consumer profile
Product profile
Time and period of campaign

Importance of Sales Forecasting

Sales forecasting holds great importance in marketing; it is the support of business activities. A perfect sales forecast is very important for business success. The following points explain the importance of sales forecasting:

Helps to Determine Production Rate: Sales and production are closely related. To decide the production rate, we must first derive the possible sales rate. If products are manufactured in proportion to the possible sales, then success is assured. If the number of products manufactured is more or less than the number of products sold, the business is negatively affected. Systematic use of sales forecasting techniques provides a perfect idea of possible sales and, obviously, the production rate. Thus, sales forecasting techniques bring stability to the production process and give direction to production.
Helps to Prepare Plans: Forecasting and planning are two sides of the same coin. Perfect forecasting is the only support for planning. It provides support for income and expenses.
Supports Financial Plans: Every production company has a long life. In every phase, the company needs capital for various reasons or to solve various problems. Getting capital at the right time, in the right amount, and in the right ways is very important for a factory. At the same time, using capital for suitable work is also important. So, capital management is an important factor for business success.
Helps to Decide Sales Price of a Product: Using sales forecasting techniques, a company can estimate future sales of a product for a specific time period. From that, the production rate is decided. From this, the production cost is decided. Again, the company has to invest money for the marketing program. After calculating all costs (from raw material to marketing), the production cost is determined. By adding profit to the production cost, the product’s sales price is fixed. Sometimes, market conditions change unexpectedly. By considering these changes, the product’s sales price sometimes needs to be changed.
To Prepare Budget: A budget is an estimation of a company’s future requirements in a sequence. The purpose of a budget is to achieve company objectives, fulfill future needs in time, and get maximum benefits from market situations. A budget is an arrangement for the future. To prepare a budget, one must get an idea of future business conditions. Using sales forecast techniques, possible sales for a specific period in the future are calculated. Then expected sales rate is

Objectives of Sales Forecasting

The objectives and duties of sales forecasting are:

Production and Storage of Raw Material: The main objective of producing goods is to make a profit. Sales forecasting provides an idea of future sales, which makes production planning easier. Raw material is the most important factor needed for production. The requirement of production and raw material are linked. If production requirement is less, the raw material available should be less. If the quantity of raw material is too much compared to production requirement, then capital remains invested in raw material. (No doubt, that material can be used after some time period, but until then, our capital remains in the form of raw material and not in the form of money). If the sales rate fixed using sales forecast is practical, storage of raw material can be done effectively.
Making Financial Budget: Sales forecast gives an idea of future sales. It provides the amount of profit that can be earned from sales. Based on this information, a financial budget is derived. What is included in this budget? It includes the amount of capital needed from time to time when production is in process, so that arrangements can be made to fulfill these needs. Also, the need for working capital is determined.
Making Plans to Buy Materials: Every type of material, machinery, or other things should be kept ready so that the production process does not get disturbed. Material is bought by considering future sales and objectives of production.
Planning for Expenses on Sales: Planning for sales expenses is one of the important objectives of sales forecast. After deciding the sales target, a marketing program is planned. Within this program, the number of salesmen needed is fixed. Procurement of salesmen, their responsibilities, their training, the way they should travel, times for official meetings, etc., are included in this program. Thus, a manager can keep control over these employees.
Long and Short Period Planning: Sales forecast is an important support for long and short period planning. Sales forecast is related to business capital and business expansion. Sales forecast provides all-time information that is used for business management.

Limitations of Forecasting

As we know that atmospheric forecasts are not right every time, in the same way, there are limitations to sales forecasting, even if it is done carefully. The only thing you can be sure of in any forecast is that it can contain certain errors. This is the reason why forecasting limitations must be taken into consideration while forecasting is in process. It helps eliminate some errors in the forecasting method. Some of the limitations are as follows:

Lack of Sales History: Forecasting for an available product in the market is quite easy compared to forecasting for a new product. Sales data from past few years can help to forecast. But for a newly introduced product, such data is not available. So, without any base, the forecasting method becomes hard.
Consumer Psychology: Consumer psychology creates a big problem. It is very difficult to remove doubts from a customer’s mind regarding a product (for example, a doubt regarding a Coca-Cola soft drink created huge problems for the company). Sales forecasting must be flexible enough to face the psychology of consumers during war, etc. Simple minor changes can be made to the forecast whenever required. The correlation between consumers’ thinking power and their behavior should be understood by the forecasting person. This is an important limitation.
Change in Style and Fashion: Living standards and fashions of people change according to changes in income, education, etc. This may affect the sales of products. Due to movies, serials, etc., fashions are changing very fast. No one can guess the changes in fashions for the future. Sales of a favorite product may go above the target. But in the exact opposite situation, the company has to suffer loss.
Change in Hypothesis: At the time of forecasting, some factors are assumed to be unchangeable. Business cycles, government policies, wars, international relations, etc., are considered to be stable. But if any of these factors change, it directly affects sales. So, a change in hypothesis is one of the limitations.
Eligibility of Forecasting Person: If a person is ineligible and less experienced, their forecast is full of errors. So, the success of a forecast depends on their knowledge, working method, point of view, and ability. If they lack these qualities, their forecast cannot give good results.

Importance of Consumer Behavior

A study of consumer behavior is important to design marketing policy, program, system, and strategy. The importance of consumer behavior can be explained for a business organization as follows:

Which factors play an important role in determining consumer behavior can be understood through this study.
We can understand how a consumer determines their buying process, e.g., consumers use different methods to purchase daily necessities and capital goods. The study of consumer behavior explains how the buying process is designed and the factors influencing buyer behavior.
We can understand how a consumer recognizes a need and which factors or persons play a role in that recognition.
All business organizations are trying to attract consumers towards their commodity. They use different instruments to attract them. The study of consumer behavior can explain which instrument will be more effective.
Nowadays, it is possible to produce on a large scale with the use of modern technology. In a number of consumer goods sectors, producers have achieved maximum production capacity. The number of producers has also increased, and intense competition exists among them. Naturally, it is very difficult to maintain and increase sales of commodities; as a result, it is essential to study consumer behavior and satisfaction.
In a modern competitive age, a number of buying options are available for consumers. Consumers analyze all buying options to make a buying decision. How a consumer analyzes the organization and their competitors’ commodities and services can be understood through the study of consumer psychology.
Which future needs of consumers and which individuals can become future consumers for the organization’s commodities can be understood with the help of the study of consumers’ economic conditions and changes in the environment.
Factors of the external environment influence consumer behavior. We can understand how all factors of the external environment create their aggregate effect on consumer behavior.
As mentioned above, business organizations use this study to design their marketing policies, determine programs, and develop work systems and strategies.

Factors Affecting the Consumer Buying Process

Many factors affect the consumer buying process. We can state the following important factors among them:

Importance of Product to a Customer: A consumer’s time and effort depend on how certain the consumer is about purchasing the product and the product’s importance to them. If the importance of the product/commodity is greater, then a consumer spends more time on information search, alternative evaluation, and so on. A consumer is also ready to expend more effort. For example, a consumer interested in music will definitely spend more time and effort to purchase music instruments.
Difference Among Available Alternatives: Mostly, a purchasing/buying process depends on the extent of difference among the available alternatives. If there is less difference among available alternatives, a consumer needs more time for alternative evaluation, which can delay the buying process. During this time, a consumer tries to find more alternatives. For example, with television sets, a number of alternatives are available, and the differences among them are also less. Definitely, the consumer spends more time on a comparative study.
Time Limit: Many times, buying decisions must be made within a limited time, and the consumer tries to complete this buying process within a short period. If the time limit is short, the consumer tries to complete the buying process quickly. For example, if a consumer urgently needs medicine, they purchase it from a close/nearby shop.

Features of Organizational Buying Behavior

As previously mentioned, an organizational buying process is complicated. Especially while establishing the purchasing process, many factors influence it. When the process becomes regular, complications begin to reduce. According to the definition of organizational buying behavior, we can say that organizational buying behavior means a buying decision process. The special features of organizational buying behavior and the organizational buying decision process are stated as follows:

Multiple People Involved: More than one person is involved in an organizational buying process. For example, in this decision, a person using a product, a person recognizing the need for a product, a person making the purchasing decision, and a person really purchasing a product are all involved.
Importance of Technical Information: In an organizational decision-making process, more importance is given to technical information and its evaluation. Technical information is collected regarding machinery, weapons, instruments, etc., and their handling and maintenance, and evaluation of information objectives are also performed.
Lengthy Process: Complications in the purchasing process, the purchasing decision-making system, and the actual purchasing decision take much time.
Dependence on Purchased Goods: The prosperity of an organization mostly depends on the purchased goods and services. Hence, more time and importance are given to a purchasing decision.
Changing Process by Goods/Services: An organizational purchasing decision process changes according to goods and services. The time and nature of the purchasing process change according to a product. For example, machinery and tools are purchased once, but raw material has to be purchased from time to time.

Methods for Settling Consumer Objections or Grievances

If a seller plays a role in the settlement of a consumer’s objections or grievances as outlined below, consumer dissatisfaction can be removed:

Welcome Consumer Objections/Grievances by Listening Obediently: A consumer never purchases goods without raising doubts or objections. They may also be dissatisfied after buying goods and services. At this time, a seller has to play a very responsible role. A seller has to welcome objections and grievances without taking them as a problem. For this purpose, it is necessary to listen carefully to the consumer’s objections. A seller has to avoid taking a neutral stance that implies the consumer’s objection is wrong.
Try to Understand the Nature of an Objection/Grievance: Ask more and more questions to understand the nature of an objection. To understand its nature, seek help from information provided by the consumer. As well as make efforts to search for the factors responsible for these objections or grievances. A consumer’s dissatisfaction will be reduced if a seller listens carefully. The information given by them helps in grievance settlement. Hence, it is important to listen carefully.
Accept the Principle ‘A Consumer is a King’: Before the settlement of consumer’s objections, accept the principle that ‘a consumer is a king’. An objection or grievance of a consumer may not always be true. An objection or grievance of a consumer may be true or false, but their satisfaction depends on how the explanation is given to a customer. Any trade organization’s growth depends on a consumer. Therefore, even if a consumer has raised an objection or grievance, it is necessary to give them a respected place. If a seller has honestly explained their opinion, it becomes very easy to settle the objections and win the consumer.
Satisfactory Settlement of Consumer’s Objections and Grievances: The final important stage in this process means a satisfactory settlement of consumer’s objections or grievances. The settlement of objections raised by the consumer at pre-purchase is possible by presenting related proofs and documents. It is also possible to explain how their objection is wrong with these proofs. But while giving this explanation, it is necessary that the seller explains their side very honestly.

Features of a Marketing Audit

We can state the primary features of a marketing audit as follows:

A Comprehensive Program: A marketing audit is not only a discussion of problems, but also the process of evaluating trouble spots and describing all marketing functions or work. If a specific task of marketing, for example, advertisement, price, and supply, is evaluated, then it will be called a functional audit, because in it, all marketing functions are not undertaken. Such a limited audit often fails to find the real cause of the problems. On the contrary, a marketing audit considers all influencing factors simultaneously. Therefore, a marketing audit becomes more efficient and effective in discussing problems related to marketing work or activities.
A Systematic Program: Another quality of a marketing audit is its systematic program. Before a marketing audit of an organization, the method of an audit is determined, and then the audit is conducted according to that particular method. A good evaluation/audit plan is very important in accordance with the management. We can state three important stages of an evaluation/audit as follows:
- Determination of basic standards of performance.
- Continuous evaluation of marketing performance according to determined standards.
- To make an organization’s marketing efforts strong and effective based on the concluding remarks of an evaluation/audit.
In an audit, a particular sequential overview of the marketing performance/work has been taken. Suggestions are given about how the marketing efficiency/performance of an organization can be increased through this overview.
A Separate Inspection/Examination/Evaluation: A marketing audit should be done by various people/groups/departments. For example, a self-audit. This audit should be done by other departments, seniors, the audit department of an organization, and other external organizations. In a self-audit, a person can audit their work through a checklist. Most organizations give more preference to conducting an audit through their audit department. Additionally, many external organizations provide auditing services to businesses/industries.

Important Factors of a Marketing Audit

Considering the scope of a marketing audit, it is classified into various factors. We can state the important factors of a marketing audit as follows. A simple model is given in a diagram 9.1.

Audit of the Marketing Environment

Through this audit, a study of the environment outside organizations, including broader as well as the smallest parts of the organization, e.g., markets, consumers, competitors, distributors, and service organizations, is done. Hence, it is essential to study/inspect/evaluate all these influencing environmental factors to determine a marketing strategy. It is also important to study how these factors become useful to an organization. To compile a comprehensive list, we must study each environmental factor. The following are some of the important factors in a macro-marketing environment audit:

Economic Factors
Natural (Wealth/Resources) Factors
Technological Factors
Political Factors
Cultural Factors

Economic Factors Audit

An audit of this factor can be done through the following questions:

Is there any change in the economic sector, or a consumer’s economic condition? For example, a consumer’s income, prices of the products, consumer’s savings habits, loans, supply, etc.
What provisions are made by an organization to meet these changes?

Natural (Wealth/Resources) Factors Audit

By considering the limited availability of natural wealth and resources, the government and others always demand careful use and preservation of these resources. Hence, the regulations and laws related to this are very stringent. In this audit, it is necessary to get the answers to the following questions:

Is there a use of natural wealth/resources as raw material in the production of goods?
Is there any change in the availability of these resources and their prices?
Is there any change in the laws related to the regulation/control of natural wealth?
Is there any change in the laws related to pollution control?
Are any provisions/measures undertaken by an organization regarding these changes?

Technological Factors Audit

Technological development is equally important in marketing decisions. It is important to take an overview of the following factors.