Chapter 24 Economic - Chapter 24 Economic, Social, and...

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Chapter 24 Economic, Social, and Legal Effects of Advertising -List three eras of advertising criticism -Identify economic arguments for and against advertising For 1. Advertising provides consumers with information to make informed decisions about new products, availability of products, price, and product benefits. 2. Advertising supports largely unrestricted media that disseminate news and entertainment. It also provides employment for thousands of workers in these media. 3. By promoting product differentiation, advertising encourages continuing product improvements and the introduction of new and innovative goods and services. 4. Mass advertising permits companies to achieve economies of scale in production that more than offset the per unit cost of advertising and combined with competition, result in lower prices 5. Advertising contributes to increases in the overall economy by increasing generic as well as brand consumption. Against 1. The intent of advertising is to persuade, not to inform. Ads only provide positive information about a brand 2. On a macroeconomic basis, advertising spending is largely wasted because it primarily causes consumers to switch from one brand to another without any net gain to society. 3. Many economists challenge the notion that advertising lowers the price of products and services. Primary goal of advertising is to insulate a brand from price competition by creating emotional appeals so price becomes less and less important. 4.
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Chapter 24 Economic - Chapter 24 Economic, Social, and...

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