ADV 318J Lecture Notes - Lecture 3: John Kenneth Galbraith, Healthy Choice, Toothpaste
Document Summary
John kenneth galbraith: (cid:440)0. 2 advertising seduced societies into wasteful materialism and creates monopolies(cid:441) it stimulates the economy. Provides direct funding to media and advertising people. Promotes competition lowers cost of providing info to consumers. Utility theory of consumer behavior: rationally acquire the greatest satisfaction (utility) and to avoid dissatisfaction (inutility) Law of supply and demand: purchase more when price goes lower, less which price goes up. Adv. is the most cost effective means of promotion lowers cost of production by increasing total demand for products/services. Advertising increases sensitivity to price lower priced items (cid:440)generic(cid:441) brands. Eyeglasses - benham, with price adv, price is lower. Prescription drugs - cady, with price adv, price is lower. Beer - wilcox, with price adv, there is no difference. If you cut the budget, sales will probably fall. It makes more sense to increase advertising when competitors are cutting theirs to gain market share.
