Exhibit 22-18 This ad promotes the economic value of advertising for a firm or a new product or brand; leads to economies of scale in production, marketing, and distribution, which in turn lead to lower prices; and hastens the acceptance of new products and the rejection of inferior products.

Critics of advertising view it as a detrimental force that not only fails to perform its basic function of information provision adequately but also adds to the cost of products and services and discourages competition and market entry, leading to industrial concentration and higher prices for consumers.

In their analysis of advertising, economists generally take a macroeconomic perspective: they consider the economic impact of advertising on an entire industry or on the economy as a whole rather than its effect on an individual company or brand. Our examination of the economic impact of advertising focuses on these broader macro-level issues. We consider its effects on consumer choice, competition, and product costs and prices.

Was this article helpful?

0 0
Advertising With Circulars

Advertising With Circulars

Co-op Mailing means that two or more businesses share in the cost and distribution of a direct mail campaign. It's kind of like having you and another non-competing business split the cost of printing, assembling and mailing an advertising flyer to a shared same market base.

Get My Free Ebook

Post a comment