Final answer:
Effective advertising and product positioning enable brands to differentiate their products, increase brand awareness, attract more customers, enhance a country’s image, and reduce negative stereotypes. These factors contribute to increased sales and potentially higher prices for a firm's products, boosting profits.
Step-by-step explanation:
Effective advertising and proper positioning of products are pivotal for brand success. These strategies can lead to various positive outcomes for a brand. Firstly, by creating compelling advertisements, brands can differentiate their products from those of competitors. This is particularly important in markets characterized by monopolistic competition, where numerous firms offer similar products.
One result of successful advertising is an increase in brand awareness, which allows a brand to become more prominently known in the market and amongst potential customers. An increase in brand awareness is often paralleled by an increase in a firm's perceived demand curve, which can either become more inelastic or shift to the right. This implies that the firm could potentially sell more products or charge a higher price, leading to increased profits.
Furthermore, through strategic product positioning and advertising, brands can attract more customers by appealing to their specific needs and desires. This can also help in improving the image of a country if the brand gains international recognition. Additionally, they can combat negative stereotypes by promoting positive messages and demonstrating social responsibility.