Show The Voice of Business Advertising pro and con by Richard L L. L Lesher President Chamber of Commerce of the tf U. S. S Item Hem According to Representative Frederick W Richmond D- D N N. Y demand is artificially created through through- advertising which is tax deductible and so comes comes' comes come out of the consumers consumer's pocket Congressman Richmond and various and economists believe advertising can add unnecessarily to consumer prices ITEM Ralph Nader says Id move decisively on getting rid of state regulations those that prohibit pharmacies from advertising prescription prices for example and those that prohibit opticians from advertising advertising ad ad- eyeglass prices Barriers of that kind are put up by businesses that want to protect themselves from competition Ralph Nader the Federal Trade Commission and various and economists believe advertising can i J i. i C f promote competition and hold down prices Goodness gracious what's a body to think Does Docs advertising Increase prices or restrain them And why cant can't the agree with one another on the point TO AN economist of the neoclassical school one who believes In the aggregate Infallibility infallibility infallibility in In- fallibility of the free market the question is easily settled seWed In Inthe Inthe Inthe the absence of coercion businesses would not continue to spend significant sums of money on a practice with no economic utility In other words businesses advertise because they have found It helps them earn a profit and the urge to earn a abuck abuck buck buc bucis is what keeps them in business What about the argument that advertising makes us want things we dont don't really need Ive I've always thought that people who subscribe to this view have havea a very contemptuous opinion of the mental abilities of their fellow human beings A YOUTH PARTICIPATING In the Starve Starve-a Starve thon thon are back row left to right Scott Chamberlain Laura King Jackie Hardy Stacy Voorhies Kathy Beacham Marcie Wilkins Janell Black sponsor Front row left to right Peter Chamberlain Kim Booher and Debbie I DONT DON'T think advertising creates new cravings In us-at us us at least not In any basic way Itcan It Itcan Itcan can and docs does play on existing needs and emotions But then so does entertainment or art or music In this sense advertising ad can make us aware of ofa a greater variety of ways to satisfy our differing tastes There are two other criticisms of advertising which are much more sophisticated than the consumers are sheep innocent line of reasoning The first is that advertising creates barriers to the entry of new firms at least in industries industries industries in in- where heavy consumer advertising campaigns are the norm A new challenger so the argument goes cannot raise the millions of dollars necessary to compete with the ad budgets of the established giants BUT nUT EVEN if this were true and and the evidence on the point is not clear cut clear cut why should advertising costs be any more of a barrier to entry than any other kind of capital outlay The high cost of equipment could be called a barrier to entry in the steel industry the high cost of exploration a barrier barrie to entry in the oil industry industry industry in in- etc The second sophisticated argument t against advertising is that advertising creates brand loyalty which distracts consumers from choosing the lowest cost product thereby reducing price competition In rebuttal to this theory it itcan itcan itcan can be argued and is by economist Phillip J J. J Nelson of the State University of NewYork New NewYork NewYork York that even advertising advertising advertising ad ad- informs consumers of possible substitutes for their customary choices thereby increasing competition Also a company that pays a l lot t for advertising is going to invest the money in promoting its winners not its losers therefore the best buy may maywell maywell maywell well be the most heavily advertised advertised advertised ad ad- product Which side am I Ion on I believe in competition and maximum free choice in the m marketplace and I believe advertising promotes both That doesn't mean however that I haven't had an occasional urge to put my foot through g the thc TV tI screen scree 4 jl when an especially tasteless or or obnoxious commercial comes on |