Can you please give me short 5 intelligent questions about this topic to ask to
ID: 1116500 • Letter: C
Question
Can you please give me short 5 intelligent questions about this topic to ask to the presenter?
Advertisers Are Taking on
Competitors by Name...and Being Sued
Since 1981 when the National Association of Broadcasters
abolished its guidelines against making disparaging remarks
against competitors’ products, advertisers have taken their
gloves off and have begun to praise the superior qualities of
their products, not compared to “brand X” as before 1981 but
by identifying competitors’ products by name. The Federal
Trade Commission welcomed the change because it
anticipated that this would increase competition and lead to
better-quality products at lower prices.
DEFINITION of 'Comparative Advertising'
A marketing strategy in which a company shows how its
product or service is superior to that of its competitors by
comparing the benefits and costs within the advertisement
itself. A comparative advertising campaign may involve
printing a side-by-side comparison of the features of a
company's products next to those of its competitor.
DEFINITION of 'Comparative Advertising'
BREAKING DOWN 'Comparative Advertising'
Comparative advertising is not used solely for the promotion
of a product or service. It has become a common technique
used in political advertisements, with one candidate listing
how he or she would not have made the same specific
decisions as the incumbent if elected. This type of advertising
is popular with companies releasing new products, as the
focus of the ad will be how the new product is better than
products already on the market.
BREAKING DOWN 'Comparative Advertising'
You must comply with the Lanham Act, a federal law that
regulates trade practices and is the basis for most private
lawsuits over advertising claims. Primarily, the law bans
two kinds of comparative ads: false claims about an
advertiser's own product and false or misleading claims
about a competitor's product
Although the Lanham Act is often known as a trademark
statute, it also protects businesses against the unfair
competition of misleading advertising or labeling. ... Thus,
the “Lanham Act draws upon this market expertise by
empowering private parties to sue competitors to
protect their interests on a case-by-case basis.”
Certain advertising claims are not actionable under the Lanham Act.
“Puffery” or “puffing” is not a claim because it is a statement of pure
opinion. Puffing is exaggerated advertising, blustering and boasting
upon which no reasonable buyer would rely. Examples of puffery
include:
“Better Ingredients. Better Pizza” – Papa John’s
“POWERADE” is “The Complete Sports Drink”
“Discover the better taste of Progresso”
“The King of Beers” – Budweiser
“America’s Favorite Pasta”
Under monopolistic competition a firm can increase its expenditures on
product variation and selling effort in order to increase the demand for its
product and make it more price inelastic. These efforts can increase the
firm’s sales and profits, but they also lead to additional costs and legal
problems.
A firm should spend more on product
variation and selling effort as long as
the MR from these efforts exceeds the
MC, and until MR=MC.
In other words, the rates from product
sales should be greater than the costs
of increased selling expenses and
possible lawsuits.
Companies often use various forms of advertising, including comparative
advertising, to increase sales of their products and services. Comparative
advertising is an effective tool used in the promotion of a company’s products
and to bring attention to the quality of one company over its competitors.
However, comparative advertising can, and often does, lead to disputes
between competitors. Companies should examine carefully the claims they
make in their advertising campaigns and be prepared to defend and
substantiate their statements.
Companies should also be aware that while spending more on product
variation and selling effort can increase profits in the short run,
monopolistically competitive firms will break even in the long run because of
imitation by other firms and the entrance of new firms.
Explanation / Answer
5 such questions are as follows:-
Question1. What was the competition situation before issuing guidelines by National Association of Broadcasters?
Qestion2. What was the effect on competiton practices when guidelines were issued ny National Association of Broadcasters?
Question3. Define and explain briefly Comparitive advertisement and it's breaking down.
Question4. Till what stage or phase a firm should invest in the products variation and it's selling efforts?
Question5. Explain in brief what is lanham act. What tools or techniques a firm can use to increase it's sales in the short term as well in the long term?