Theses, Dissertations, and Capstone Projects

Year of Award

1993

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business Administration

Department

Business Administration

Keywords

products, information, society, market, goods, micro-economics

Abstract

In the modern competitive environment/ advertising plays a major role. It helps to establish relationships between human desires and production and/ in so doing, makes possible mass production and mass consumption. Advertising is such an integral part of our everyday life that we sometimes forget its relatively recent origin. Though people have made and exchanged goods and services from time immemorial, it was only in the late nineteenth century that advertising began to foster and to influence these makings and exchanges. Before long, it was a substantial industry in its own right.

And from its beginnings, the promotion of goods and services by third parties has been a controversial activity. By taking advantage of the technologies of mass media, advertisers and advertising have been subject increasingly to public suspicion and antipathy. In recent years, this suspicion and antipathy has risen, on occasion, to active distrust and organized opposition.

Recently, much has been said about honesty in advertising. In the haze of accusations, three points stand out. It is asserted that advertising lives on implied half-truths, cultivates distortions, and often misleads more than it informs. It is asserted that instead of satisfying real human needs, advertising creates insatiable wants that would not otherwise exist. And it is asserted that advertising wastes the real wealth of an economy by enticing people into purchases injurious to their best interests.

In several countries in recent years, persons from outside the advertising industry—from government, from the public at large, or from both—have seriously damaged the effectiveness of advertising as an economic tool. The results to the social environment are a broad misunderstanding of the economic value of advertising and the suspicion of hidden, "sinister" powers at work. The result for the advertising industry are restrictions on the amount of advertising space and time permitted, arbitrary taxes on advertising, or even prohibitions on the use of certain media for advertising purposes. Such measures have driven up advertising costs and simultaneously seriously impaired the profit margins of firms that provide advertising services. For the sake of the industry and society in general, such damaging intervention needs to be curbed.

A discussion of the social and economic issues of advertising can be divided into three categories. The first category represents the nature and content of the advertising to which people are exposed. Is advertising performing an informative role or a deceptive one? Are appeals used that manipulate consumers against their will, particularly certain groups, such as children or the economically disadvantaged? Finally, there are a variety of issues associated with taste. Is advertising too repetitious, too silly, too preoccupied with sex? Does it irritate or offend the audience member? In essence, this category considers the means rather than the ends of advertising the means being the copy and media tactics used.

The remaining two categories represent the aggregate effects of advertising on society as a whole. One of these is the effect on society's values and life styles. There are those who believe that advertising competes with or dominates such other socialization agents as literature, plays, music, the church, the home and the school; that it fosters materialism at the expense of other basic values; or that it may serve to reinforce sexual or racial discrimination. The second is the effect of advertising on society's economic well-being and on the efficiency of the operation of the economic system. To what extent can the power of advertising lead to the control of the market by a few firms, which will weaken competition and raise consumer prices? What is the economic value of advertising as an efficient mechanism for communicating the existence of new products? To what extent does it subsidize mass media? The focus is on the macroeconomic rather than microeconomic effects of advertising, because the analysis is concerned with the economic health of the economy as a whole, as opposed to that of individual consumers.

Document Type

Restricted Thesis

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