The presentation focusses on explaining what exactly is advertising elasticity of Demand , its importance in real world explained through graphs

1. S
Advertising Elasticity Of
Demand :
ABM – 102
Seminar & Group Discussion
Submitted By : T.Guru Aarat
142063

2. What is Elasticity of demand ?
S Elasticity of demand refers to the degree of
responsiveness of demand of a commodity to change in
any of its determinants.
S Its is a measure of how sensitive the quantity demanded
of a commodity is to change in any of the factors
influencing demand.

3. Types Of elasticity of demand :
S There are 4 types of elasticity of demand :
1. Price Elasticity of Demand
2. Cross Elasticity of Demand
3. Income Elasticity of Demand
4. Advertising Elasticity of Demand

4. Advertising Elasticity of
Demand (AED) :
S Advertising Elasticity of demand refers to the proportionate
change in demand of a commodity due to proportionate
change in advertising expense.
S Advertising elasticity is a measure of an advertising
campaigns effectiveness in generating sales.
S Formula :
Proportionate change in Demand for
product
Proportionate change in Advertising
expense
AED =

5. Types Of AED:
S Perfectly Elastic Advertising elasticity
S Perfectly Inelastic Advertising Elasticity
S Highly Elastic Advertising Elasticity
S Unitary Elastic Advertising Elasticity
S Highly Inelastic Advertising Elastcity

6. Perfectly elastic AED
y
0 x
Perfectly elastic
curve
D D
When the
demand for a
product
changes –
increases or
decreases
even when
there is no
change in
advertising
expense.
Advertising
Expense
demand

7. Perfectly inelastic AED:
demand
D
D
Perfectly inelastic
curve
0
Y
X
When a change in
advertising
expense , doesn’t
lead to any
change in quantity
demanded , it is
known as perfectly
inelastic demand.
Advertising
Expense

8. Relatively elastic AED:
Relatively elastic
curve
Advertising
Expense
demand0 x
y
D
D
When the
proportionate
change in
demand is
more than the
proportionate
changes in
advertising
expense , it is
known as
relatively
elastic

9. Unitary elastic AED:
Unitary AED
y
x0 demand
D
D
When the
proportionate
change in
demand is
equal to
proportionate
changes in
advertising
expense price,
it is known as
unitary elastic
Advertising
Expense

10. Relatively inelastic AED:
Relatively inelastic
demand curve
XO
Y
demand
D
D
When the
proportionate
change in
demand is less
than the
proportionate
changes in
advertising
expense , it is
known as
relatively inelastic
demand
Advertising
Expense

11. 1.Nature of the products and time factor
2.Timing of the promotional activities
3.Product stage
4.Promotional activities of the competitors
5.Volume of advertising expense incurred
6.Non Advertising factors
Factors affecting AED :

12. Importance of AED:
• Its helps the management in deciding whether the
outlay on advertisement should be increased ,
decreased or maintained at the present level.
• Its helps the management in studying the effect of
advertisements on sales revenue.
• Advertising elasticity also helps in evaluating the
effectiveness of various media of advertisement.

13. THANK
YOU !!