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Question

Write short answers of the following

How does advertising help Trading activities?

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Solution

Businessmen are able to reach a large number of potential buyers through advertisements. Advertisements not only educate buyers about availability, features and application of the goods but it also influences the customers to purchase the products. This helps businessmen to increase their sales and trading activities. Thus, advertisement removes the hindrance of communication and knowledge. Different modes of advertisement are used depending on the nature of product, type of audience, budget of the manufacturer, etc. These different modes include television, newspaper, radio, Internet, hoarding, etc.

Advertisement provides following advantages to the trader.
i Economies to scale: Advertisement enables the trader to get large order and undertake large scale production. This leads to economies of scale as the production cost is reduced.
ii. Introducing new product: Introducing new products becomes easier asdvertisement helps making people aware of any new product introduced in the market.
iii. Brand Building: Advertisement helps in building image of the trader by making the product of trader popular.

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