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Economic effects of advertisements and disadvantages
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Economic Effects of AdvertisingPresented by
Amlin David
What is Advertising
• Advertising is a form of communication used to persuade an audience (viewers, readers or listeners) to take some action with respect to products, ideas, or services.
Definitions of Advertising
• Any paid form of non personal presentation and promotion of ideas of goods and services by an identified sponsor (Philip Kotler 2006)
• Paid non personal communication from an identified sponsor using mass media to persuade or influence an audience ( Wells, Burnett and Moriaty 1998)
Economic reactions of Advertising
• Generates a net gain in direct sales due to promotion of the industries products and services
• Generates indirect sales and jobs among the first level suppliers to the industries that incur advertising expenditures
• Generates indirect sales and jobs among all other levels of economic activity as the sales ripple through the economy
Effects of Advertising on Economics
• Consumer information• Competition• Consumer Manupulation
Effects of advertising in a free economy
• Creating a market• Its about brand• Pop culture• Influence on Children• Consumerist society
Social problems of Children in Advertising
• Child Obesity
• Materialistic Habits
• Violence/Harmful
Side A(Proposed government regulation)
General Parties:•Some parents
• Some pediatricians & health care professionals•Most child
psychologists•Consumer protection
groups
Specific Parties:• Advertising
Educational Foundation (AEF)• American Academy of Pediatrics• Children’s Advertising Review Committee (CARU)• Emily Roberts (Treaty Oak Psychotherapy – Austin)
Side AIssues and Arguments
• “Childhood obesity is quickly becoming a global health concern as figures reach epidemic proportions” (*Source: Advertising to
Children 2).
• “Children create and begin to model a lifestyle based on the advertisements they view” (*Source: Wright 51).
• “Advertisers expose too many negative and potentially harmful advertisements to children (*Source: Gunter, Oats, & Blades 81).
Side B(Opposed government regulation)
General Parties•Some advertising
agencies• Some global
economists•Some parents•Some television
stations
Specific parties• American Association of
Advertising Agencies (AAAA)
• Child’s Play Communications
• Children’s Food & Beverage Advertising Initiative
• Hilary Fox (LatinWorks Advertising Agency)
Side BIssues and Arguments
• “It is the parents or guardians responsibility to monitor what their children view” (*Source Toops 3).
• “Since we live in a capitalistic society, advertising is a business that sustains a way of life and economic success for the U.S.” (*Source: United States 4).
• People rely on it to work, businesses rely on it to sell their products, and consumers rely on it to choose products they identify with” (*Source: United States 9).
Analysis of Side A’s Arguments
Values• Health, family, self-esteem, fairness, & education
Obligations• Protecting their children, pushing for more gvnt. regulation
Consequences• Statistics will begin to show the decrease of child obesity,
the fall of child/adolescent violence, and less materialistic habits
Analysis of Side B’s Arguments
Values• National & global economy, the right to freedom of speech,
currency, competition, fairness, and education
Obligations• To distribute their informative ad campaigns to children &
parents to sell their goods and create awareness of their brand
Consequences• The national economy will suffer tremendously as advertising is
a billion dollar industry
Solutions for influences of Children Education
• Educating children about advertisements, what the effects are, and the different ways we can change how current messages are sent out.
• Both sides to merge together in effort to agree that organizations like CARU will serve as a review committee that will have experts from areas such as: education, communication, child development, child mental health, marketing and nutrition.
Disadvantages of advertising
• Misleading claims• Encourage Monopoly• High prices• Disconnection to business• Misuse of advertising• Creating unrequired desire• Buying problems
Miscellaneous objection
• Inferior quality of goods are introduced in the market to deceive the consumers.
• The new firm having limited resources cannot compete with a already established big firms, with the help of advertising.
• A large firm can divert demand from one product to another with the help of
advertisement.
• Consumer's choice is greatly injured by the advertisement.
• As advertising is a comparatively new art so certain media of advertisement is ineffective and inefficient than it could be.
THANK YOU