Advertising is a social waste. Comment upon the statement with six points in support of your statement.
Answers
Answer:-
1. Advertising leads to higher prices: Many hold the view that advertising leads to higher prices of goods. Advertising involves considerable expenditure. If that, expenditure is avoided, the cost of goods may be reduced and the consumer can get the product at a cheaper price. If the money spent on advertising is used for improving the quality of the product, consumers may get a better product for the same price.
2. Advertising leads to monopoly: It is well known that large business firms establish brand image through advertising. Consumers develop brand loyalty. Then it becomes difficult for new producers to enter the market. In other words, advertising enables the existing large producers to block new competitors from entering the market. Thus, advertising acts as a barrier to entry and thereby leads to monopoly. Moreover, increased advertising often results in increased sales. Due to this possibility, established firms spend more and more on advertising and increase their sales. In this process they earn larger profits which enable them to spend even more on advertising.
Thus, new entrants who do not have large financial resources find it difficult to compete with such established firms.
3. Advertising results in inefficient resource allocation: Advertisements are intended not so much for the benefit of consumers. They are mainly directed to influence the consumer demand to fit whatever has been produced. In other words, advertisements are aimed mainly to change the tastes of people so that they will buy whatever is manufactured. This leads to distortion in consumption expenditure and increases the producers’ market power. Thus, advertising indirectly determines what people should consume. In this process productive resources i.e., land, labour and capital, may not be used in the best interest of the society.
4. Advertising causes undesirable social effects: There are certain other criticisms about the social effects and cultural impact of advertising.
a) Objectionable appeals like sex, horror, etc., are used in advertisements to attract the customers’ attention.
b) Consumers are exposed to hundreds and thousands of product appeals which they may not be able to buy and enjoy. This may create frustration and disappointment in many cases.
c) Advertising is used for promoting objectionable and harmful goods like cigarettes, liquors, etc.
d) It influences the values and life styles of people in society. Often it is used to
promote products that satisfy the materialistic requirements of consumers
Advertising is, thus, accused of promoting materialistic values in the society.
e) Advertisements occasionally portray certain things objectionable to some sections of the society creating tensions between different groups of people.
5. Advertising may act against the freedom of press: Mass media earn huge income from advertisements. If the media are dependent on income from advertisements sponsored by a few large business firms, it may be difficult to disseminate information in public interest when it is unfavourable to those big business firms. Big sponsoring firms can threaten the media owners by refusing their advertisements and dictate what media have to do. Thus, the financial dependence of media on advertisements may act against the freedom of press.
6. Advertising encourages unnecessary competition: There is a distinction between informative advertising and competitive advertising. Informative advertising is that which passes on the useful information about a product or service to the customers. Such advertising is desirable. On the other hand, the competitive advertising is primarily meant to shift demand from one brand to another brand. In this case the advertisement has not created any additional demand. Therefore, such advertising is undesirable. In some cases, even the product features mentioned in the advertisement do not compare with the product when inspected. This type of misleading advertising is all the more undesirable
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