Question

State any two demerits of advertising.

Explain in brief three demerits of Advertising.

Give two limitations of advertising.

Answer 1

The demerits of advertising are as follows:

1. Higher Price: It is argued that large amounts spent on advertising increase the cost of distribution, which is transferred to customers in the form of higher prices. This objection may be valid in case of inelastic demand, when advertising merely transfers demand from one producer to another. However, effective advertising often creates demand and increases the scale of production. Large-scale operations result in lower costs and lower prices.
2. Wasteful Consumption: Advertising multiplies people's needs and encourages unhealthy consumption. By exploiting human sentiments, it persuades people to buy products they do not need or cannot afford. Advertising promotes artificial living and extravagance and creates demand for trivial goods. Modern society has become a society of Chocolate, Campa Cola, and Lollipops instead of natural and wholesome food largely because of advertising.
3. Misleads the Consumer: It is said that advertising is often deceptive and misrepresents facts to the consumer. Exaggerated or tall claims and flowery language are used to dupe unwary consumers. They are induced or defrauded through bogus testimonials and false comparisons to buy goods of doubtful value. There is no denying the fact that some firms indulge in false and misleading advertising and that their unscrupulous use of advertising destroys public confidence in advertising.
4. Creates Monopoly: Advertising creates brand preferences and restricts free competition. Large firms that can afford to spend a huge amount of money on advertising eliminate small firms by creating brand monopolies. Advertising thus encourages the survival of the mightiest rather than the best. But advertising creates only a temporary brand monopoly, as after some time, other brands offer competition.
5. Wastage of National Resources: In order to make use of advertising, producers create trivial differences in their products. Valuable resources that can be used to create new industries are wasted in the production of needless varieties and designs. Vance Packard, in his book 'The Waste Makers', gives several interesting examples of how producers in America coax consumers to replace their cars, radios, etc., much before their useful life comes to an end.
6. Undermines Social Values: Modem advertising exerts such a corrupting influence on cultural and social life that it is not only wasteful but immoral. Despite its limitations, advertising is an essential marketing function in modem business. If advertising were wasteful and unnecessary, it would have been discarded long ago. It becomes wasteful and objectionable only when it is used dishonestly for antisocial ends. In fact, advertising is the cheapest selling tool, and its abolition will require the use of more expensive selling techniques.