CASE 22-1: Advertising: The Root of All Evil? Peter and Torrie were watching television. During a commercial they discussed how companies use advertising. Peter: Companies spend too much money on advertising. If they would spend less, the prices of products would be a lot lower. I heard that companies that advertise on the Super Bowl program spend more than $1 million for one ad. Torrie: Companies are not only placing ads in the middle of shows, theyâ€™re also putting them into movies and television shows. I think they should remove ads from television and radio. I usually switch between channels during commercials anyway. Peter: It seems like advertising is everywhere. No matter where you go or what you do, you see products promoted. My parents bought a TiVo, so I donâ€™t even see commercials on our system. Torrie: It seems that companies advertise to get people to buy products they donâ€™t want. Iâ€™ve bought some things just because of the ad and regretted it later. Companies with good products shouldnâ€™t have to advertise. People will find out about them from others who try the products and like them. Peter: The worst thing about advertising is that businesses can say anything they want to about products, even if the statements are untrue. They often criticize their competitors, making you think thereâ€™s something wrong with the other product. After watching or listening to an ad, youâ€™re more confused than ever about what to buy.
THINK CRITICALLY 1. Do you believe product prices would decrease if companies did not advertise? Explain. 2. Explain why some companies would pay $1 million to advertise during the Super Bowl. 3 What would happen to television and radio if advertising support was dropped? 4. Do good products need to be advertised? Why or why not? 5. What types of controls are there on what a business can say in its advertising? What can consumers do if they believe they have been misled by advertising? 6. Do you believe advertising results in more confusion than help for consumers? Justify your answer. 7. Do you think that the high level of advertising creates needs rather than simply informing the customer of product benefits? Explain your answer. 8. How do channel surfing and TiVo affect the effectiveness of advertising? How are companies shifting strategy in this new environment? 9. Develop an argument to convince Peter and Torrie that advertising is a vital part of a marketing strategy.