ABSTRACT
In tight economic times, the pressures are always on to cut advertising. If the company stops advertising and sales stay at the same level, the cessation of ad spending generates an immediate improvement in the bottom line. Hence the strong temptation to cut advertising in tough times and make the company’s profit performance looks good. Most companies do not know what happens when advertising stops because they only look at the immediate sales figures. Stopping advertising could be a smart decision. But then again, it could be a time bomb. Habitual, repeat-buyers of a brand are not the same thing as brand loyals. Habitual buyers repeat-buy the brand for reasons of inertia rather than loyalty. With the cessation of advertising, the brand loyals diminish in the market and habitual buyers increase. The effects of advertising must not be looked at just in terms of increasing sales. To do so ignores the fact that advertising has a very important reinforcement effect.
