ADVERTISING DEVIL

THE ADVERTISING DEVIL....PART II

ADVERTISING--AN ANTI-COMPETITIVE ACTIVITY?

IN INTENSELY COMPETITIVE MARKETPLACE SUCH AS THE ONE THAT EXISTS TODAY, ONE IS NOT ALIEN TO THE FIERCE COMPETITIVE NATURE OF ADVERTISING ( THE COLA WARS, THE TV BATTLES, THE DETERGENTS WASHING DIRTY LINEN IN PUBLIC ). 

SOME CLAIM THAT ADVERTISING IS SO SUCCESSFUL THAT LARGE COMPANIES ARE ALMOST MONOPOLISTIC WHEN ONE THINK OF THE ADVANTAGE THEY HAVE. FOR ONE THEY HAVE POWER OF LARGE MONIES THAT ALLOWS THEM THE LUXURY OF SPENDING LARGE AMOUNTS ON ADVERTISING. THIS ALSO ALLOWS THEM TO COME WITH AS MANY VARIENTS AS POSSIBLE, PRE-EMPTING ANY MOVES FROM OTHERS AND SQUASHING SMALLER FIRMS TOTALLY.

THUS ADVERTISING CREATES IMPREGNABLE BARRIERS THAT STOP SMALLER FIRMS FROM ENTERING AN INDUSTRY OR A PRODUCT CATEGORY, RESULTING IN HIGH ECONOMIC CONCENTRATION.

THESE LARGE COMPANIES ENJOY THEIR PROTECTED POSITION AND CHARGE THE CONSUMERS A HIGH PRICE TO RECOVER THEIR COST OF ADVERTISING AND PRODUCT VARIENT LAUNCHES. IN TURN, THIS FETCHES THEM RICH PROFITS. THEREFORE ADVERTISING ACTS AS THE ROADBLOCK TO COMPETITION BY PREVENTING ENTRY OF RIVALS AND PERPETUATING AN UNHEALTHY BALANCE OF POWER.

....TO BE CONTINUED