Ask a Teacher

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 true in case of inelastic demand, when advertising merely transfers demand from one producer to another. But effective advertising often creates demand and increases the scale of production. Large-scale operations result in lower costs and lower prices. In developed countries, businessmen have reduced costs and prices while spending millions on advertising every year.

2.Wasteful Consumption: Advertising multiplies the needs of people and encourages unhealthy consumption. By exploiting human sentiments, it persuades people to buy products which they do not need or cannot afford. Advertising promotes artificial living and extravagance and creates demand for trivial goods. This allegation may be true to some extent but it is based on the assumption that satisfaction of psychological needs is not as important as that of physiological needs. Moreover, new tastes and finer emotional experience of life are necessary for the progress of civilization. By itself, advertising cannot force people to buy things which they consider unnecessary. 

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 unscrupulous use of advertising by them destroys public confidence in advertising. But just because a few people misuse advertising, it does not mean that advertising itself is bad unnecessary.

4.Creates monopoly: Advertising creates brand preferences and restricts free competition. Large firms which can afford huge amount of money on advertising eliminate small firms by creating brand monopoly. 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. For instance, 'Amul' brand butter enjoys monopoly of brand but has to face competition from 'Vita' and other brands of butter.

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. Appearance, design and style have become more important than the physical utility of the product. Manipulative and combative advertising leads to criminal wastage of resources. The natural resources, capital equipment and labor energy which go into the production of new items to take the place of the discarded ones amount to waste when measured in terms of social well-being. Valuable stationery, time and energy used in advertisements go waste as most of the advertisements either escape the attention of the people or are ignored by them.