USA  Over $236 billion was spent on advertisement  $58 billion on broadcast and cable TV  $44 billion was spent on newspaper. INDIA  Rs 47.3 billion in 1995 and expected to be over Rs 367.3 billion in 2010.  From 2007 to 2008, online advertising grew 150 percent,

 .  It is paid by consumers What did they get out of these advertisement ◦ Most consumers feel that they get little. Some supporters feel that ads provide information. 63% feels that Ads do not present truth.   65% consumer believes that it makes people to buy things they should not buy.

  Is advertisement a waste or benefit? Does it harm consumers or help them? .

 Advertising Paid. product.personal communication through various media about a business firm. or idea by a sponsor identified in a message that is intended to inform or persuade members of a particular audience.  . not-forprofit organization. Information from producers to consumers. non.

1806 ad of medicine 1913 ad .

◦ Pro: Advertising informs ◦ Con: Advertising is superficial and intrusive Is there “information” in this ad? 7 .

Do you think advertising is superficial? 8 .What about this Ad Critics of advertising feel that advertising is superficial because many ads carry little actual product information.

 “inside every woman is a glow just waiting to come out .

PPT 4-5 10 .Where is information? Critics feel advertising promotes materialism.

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. ◦ It creates a desire for the sellers’ product ◦ It creates a belief that the product is a means of some desire the buyer already has.  Often do not include information rather to sell the product.

.   Social effects of advertisement Its creation of consumer desire Its effect on consumer’s belief.

.   It degrades people’s tastes It wastes valuable resources It creates monopoly power.

◦ This is how Aamir khan lives. ◦ This is what Tendulkar drinks. ◦ This is what Amitab Bachan likes. By gradually inculcating materialistic values and ideas about how happiness is achieved. .

  The information in advertisement is very little and the same information could be transmitted by less expensive means.  Production cost Vs selling cost. ( economists) Selling cost adds nothing to increase the utility of the product and hence it is wasteful. . It is a waste because it is spent without adding to consumer utility.

Pro:  Advertisement increases the demand and which makes mass production possible leading to economies of scale and greater efficiency and lower cost of production.  Advertisement is effective only for individual companies as it shifts consumption away from one product to another.  Consumption has increased despite minimum advertisement. Con:  Advertisement fails to stimulate consumption of a product. .

    Advertisement enables them to achieve monopoly power. Advertisement creates brand loyalty which acts as barrier to entry. cigarettes spends lot on ad but drugs. Small firms are unable to compete as huge ad is required to switch brand loyalty The research is not conclusive ◦ Concentrated Soaps. cosmetics do not. .

rather human desire is molded to serve the needs of production. Production is not molded to serve human desire. . If this is true then ad violates the individuals’ rights to choose.   Advertising is manipulative: it creates desires in consumers for the sole purpose of absorbing industrial output.

but the implication was misleading. Anacin is aspirin. Truthful vs deceptive. Truth in Advertising  Deception is making false or misleading statements. Example: An Anacin ad implied that Anacin was more effective than aspirin. The statement it made was false. but puffery (commercial exaggeration) is legal. . when in fact.  Thin line between puffery and deception  advertisements that are misleading even if they are true.

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does it create an irrational desire? Is the content based on truth? Does it have a tendency to mislead? .      What does the advertiser intend the effect of the advertisement to be? What are the actual effects of the advertisement on individuals and on society? Does the advertiser inform or does it also seek to persuade? If it is persuasive.

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