Advertising can be for individual products or markets as a whole. The purpose of
advertising individual products from the firm’s point of view is to shift the demand
curve to the right and therefore to increase the level of sales and capture market share or,
if sales are expected to fall for some reason, to maintain sales at the original level. The
purpose of advertising the whole market is to raise public awareness of the product and
to increase the total level of demand for it. Advertising expenditure is a barrier to entry,
since any new entrant would have to match or exceed the incumbent firms’ level of
advertising. This will increase the costs of entry and therefore might make entry prohibitive.
The level of advertising varies greatly between different types of products (see
the case study at this end of the chapter).