Thread: Advertising
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Old 10-14-2003, 07:44 AM   #4 (permalink)
Bubo
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Zilch means nothing.

There's two ways to answer your question Aaron. I don't think that it is possible to run any kind of business, successful or otherwise, without advertising. When a customer walks in the store and you say "Hello," you've advertised that you are a friendly place. When you tell a customer the specifications for a product, you've advertised that you are knowledgable about your product. When you comment that a product would look good with what a person is wearing, or in a person's home, then you've advertised that you know the current fashion trends.

The inevitable point of advertising is to inform the public that you exist, and why they should choose you. The hope of advertising is that it will foster the Holy Grail of Word of Mouth advertising.

Yes, you can run a successful business without spending any money on advertising. However, you cannot run a business at all without spending time on advertising. Typically it is small businesses that are successful without paying for advertising, although there are certain special exceptions.

The problem encountered without advertising is slow growth. The point of spending money on certain advertising methods is to speed up and reinforce the process that leads to word of mouth sales. It gets your business with your message in front of more people faster. It keeps your business with your message in front of people longer. Whether it's a simple business card, or a multi-million dollar advertising campaign, it all boils down to informing more people that you exist and why they should choose you for their needs.

As I stated above, there are exceptions. Co-branded and franchise operations allow small business owners to share out the costs of large scale advertising campaigns, and still reap the rewards of the campaign. The four examples that come to mind are fast food restaurants, gas stations, Krogers, and Wal-Mart. The local locations of these stores are typically not owned by the corporation they are named after. They are franchised from the corporation, then built and operated by local entrepreneurs. The advertising campaigns that you are exposed to for these stores are not organized or directly paid for by these local owners. They are directly paid for and managed by the corporation that franchised out the business. Part of the franchise fee that the local business is charged goes to pay for these advertisements. This allows multiple store owners to pool their money and resources for a stronger advertising campaign, and is one of the main appeals to purchasing a franchise license.

Another exception is similiar to co-branding a business. Having an exclusive location is an investment that brings similiar returns to advertising. Mall locations, businesses inside theme parks, that cafe inside your office building, the bar inside a hotel, they all rely on their location to bring them business. The example that we are exposed to the most is the gas station convenience store. When we see gas station advertisement, we are usually exposed to marketing about the gas quality and gas prices. Very rarely will we see anything about the convenience station that is also available. These convenience stations still do excellent business because they are in an exclusive and convenient location. You have already parked the car to pump gas, why not go in and buy a snack or drink. Many fast food restaurants have taken notice of consumer habits in regards to this, and have purchased co-locations with these convenience stores because of the amount of sales that occur at convenience stations. However, these convenience stores use little to no advertising. The sales power is the strength of their convenient location. A similiar event occurs with exclusive locations, like inside a theme park. A business does not have to be particularly good to succeed in a theme park, because they are the only business that deals in their goods within the park. They succeed based on their exclusive location, with little to no need for advertising.
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