1C} IAP1 ER XV 1SUMMARY OF THE EFFECTS OI; ADVERTISING ON PRIMARY AND SELECTIVE DEMANDTHE chapter on refrigerators concludes the detailed analyses of1c chapter on refrigerators concludes the detailed analysesthe effects of advertising upon primary and selective demand, although in the course of this investigation into theeconomics of advertising, industry statistics and advertising expenditure figures were assemblecl in greater or lessdetail for the following product groups: automobiles, gasoline, breakfast foods, electric clocks, electric -shavers,women's hosiery, and radio receiving sets. Moreover, case histories relating to the above products and to a widevariety of additional products were gathered and studied. Detailed analyses of the effects of advertising upon theprimary and selective demand for these products are not presented, here. While their presentation would contributeinteresting illustrations of variation in the forces affecting demand, the products discussed in the preceding pagesserve adequately X to show the wide dillerences in the place of advertising as a stimulator-- of primary and selective demands under the varying forces which govern demand.In the range of industries studied, advertising has been used in widely differing amounts with varying effect uponprimary and selective demands. Some industries which have used little advertising have had an expanding demand;other industries with large volume of advertising have had a contracting demand. In certain industries selectiveadvertising expenditures of many producers have been so large that they have represented a substantial part of thefinal sales price, while in other industries expenditures have been a very small percentage of price. What helpfulgeneralizations may be drawn from this selection of examples?Theoretical Ways in Which Advertising May Affect DemandThe chapter on value theory has indicated that advertising theoretically is a force which may either shift demandcurves or change their shapes. It may affect either the demand curves for classes of products as a whole (primarydemand) or the demand curves of individual companies (selective demand). 422SUMMARY ON DEMAND EFFECTS423Advertising may shift the demand for a class of product when the demand for that product is expansible, i.e., subjectto increase through appeals to consumers' buying motives. Appeals may be made either to previous users or tononusers. The appeals may emphasize the desirability either of old, accustomed uses or of new uses. Provided thedesire for the product in the market is thereby enhanced, the demand curve is shifted to the right.(When the demandcan thus be increased easily, prlce being constant, through appeal to consumers' buying motives, a product is saidto have ant expansible demand; conversely a product has an inexpansible demand when its sales cannot readily bethus increased.In influencing the shape of the demand curve for any type or class of products, advertising theoretically may makethe demand either more or less elastic, i.e., responsive to price changes. Conceivably the demand for someproducts might be made less elastic, provided the advertising rendered the desire for the product so intense thatconsumers' demand would not be readily affected by price changes. More generally, however, it would be expectedthat demand would become more elastic as the desirability of a product became known to a wide audience and thevariety of its uses became generally recognized.Since the great bulk of advertising is carried on by individual companies to increase their sales, it is to be expectedthat advertising effects relate largely to the demand curves of individual companies, i.e., to selective demand. Here,advertising theoreticallj may not only expand the demand of the individual company which advertises, but it also maychange the shape of the company's demand curve. Thc shifting of a concern's demand curve as a result ofadvertising occurs when the appeals make a branded product appear more desirable to consumers than would beattains a larger share of the industry's total than before, unless primary demand expands in equal ratio. When aconcern finds it possible through advertising readily to shift the demand schedule of a branded product, that productmay be said to be advertisable or to offer a goocl advertising opportunity. Conversely, when advertising does notreadily bring a change in a concern's demand schedule, the product may be described as one not presenting. agood advertising opportunity. Aside from the question of shifting a demand curve, advertising theoretically maychange the shape of a company's demand curve in various ways,424 1HE FCONOMIC EFFECTS OF ADVERTISINGeither making it more or less responsive to price at various parts of the curve.contitions Governing Advertising OpportunityThe evidence has shown that no general answer can be given con cerning the effects of advertising upon the demandfor products. Numerous conditions bear upon the effectiveness of advertising and it is necessary for each concerncarefully to appraise its opportunity for using advertising for each of its products in the light of the conditions underwhich it operates. It must consider both conditions affecting pnmary demand and those affecting selective demand.The individual concern in appraising its advertising is interested in expanding its own~ demand, whether the expansion comes from attracting new users to the product field or from weaning customersfrom competitors. The advertising of individual concerns accordingly, may affect both primary and selective demandschedules. Aside from the relatively infrequent instances in which competitors band together to carry on cooperativecampaigns in order to shift the demand of an industry, advertising's effect upon industry or primary demand comesfrom theCO aggregate effect of indivdidual company campaigns.In the preceding chapters the conditions favorable and unfavorable to the use of advertising by business concerns have come to light. The individual company has found it advisable touse advertising to increase sales only when advertising has served to stimulate a volume of sales at prices whichhave covered all costs, including the advertising outlay. The studies have shown numerous conditions which affectthe opportunity to employ advertising profitably to shift the demand curves of products, but among the conditionsfound five stand out:First, advertising is likely to be more effectiYe a company s