gls_merch
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I would say products would probably end up costing more.
Why is there advertising? Advertising exists because it wants to reduce your cost of search. If you wanted to buy an item but didn't know who made it or where to get it, you would spend valuable time and money to find it. Let's say you find the item, then how do you decide between many choices. Advertising is a signal. To spend money on advertising, presumably requires a compnay to make a profitable product that many other people use and you are willing to warrant/represent certain performance. That information is valuable to a potential buyer. Now I know who makes what I want, where to get it, and it's (probably) "good".
Do some companies "rip off" customers through advertising? Yes, but this wouldn't be a sustainable strategy. "Fool me once shame on you, fool me twice shame on me." When an advertiser stakes a claim, they are staking their reputation on it. Eventually, it would catch up to them as customers refused to buy a second time. Ultimately, they want to buy your brand loyalty and help you to come back to them again and again. |
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Dixie
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Greed needs no advertising.. |
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JoJo
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Lots but prescription drugs are my biggest complaint. These ads are so stupid to consumers. |
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Gravity
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Probably... for instance, certain telephone companies rely completely on word of mouth instead of national advertising. Such an example is "Excel Telecommunications," which builds it's advertising around people telling people in a pyramid scheme.
It's cheaper, but not by much, and there's no advertising. |
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sharen d
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Advertising probably adds to the cost.For everytime there is a loss at a store such as shoplifting you pay more.So for all those whom think that taking something that doesn't belong to them doesn't hurt anyone.Think again. |
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Jim D
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Without advertising everyhthing would cost much more!!
Here's a small example. Let's say I retail widgets that I buy from a manufacturer of widgets and sell to consumers of widgets. And let's say the manufacturer pays $100 in material and labor to make the product and needs to make $100 to pay for his house. So he sells me one widget a week for $200.
I must cover my cost and I need to make $100 a week to pay for my house, so I sell it for $300. Only 1 customer in 100 wants and can afford a $300 widget!! So I can only sell one widget a week.
Now my manufacturer would like to sell more widgets because he needs to pay for his food as well as his house, I'd like to sell more widgets so I can eat too. So the manufacturer invests in the tools that allow him to produce more widgets per week, say 10, without increasing his costs by 10. So, he can now sell me 10 widgets a week at, say, only $150 each (this is called productivity). But I can't buy 10 widgets a week because only 1 out of 100 people want one at $300 each. So I gamble my money and spend $100 on advertising. As a result 10 people now want widgets.
So I can sell them at my cost of $150 plus 1/10 of my $100 in advertsing plus 1/10 of the $200 per week I need for my house and my food. So, I can sell the widget at $150+$10+$20 for a total of $180 or $120 a widget cheaper than I used to sell it...so the more people who want it, the more I can sell, the cheaper it gets.
This is why you can buy a great PC for $500-$600 today that in the the 80's would have cost $5,000-$6,000 !! In the early 90's, DSL bandwidth cost $3,000 per month!!!
In short, the greater the demand, the greater the volume, the lower the cost. And advertsing creates demand. If you really stop and think about it, how many of us could even afford the computer and the bandwidth to participate in this discussion if prices had not fallen to what they are today because of advertising-driven demand and competition!! |
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Kenneth
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Not neccessarily,
It seems that this would be the case, but there is a three-fold answer to this.
1. It depends on the value of the product. Many information marketers online don't have to pay much for advertising, but it doesn't effect the cost of the product.
2. People are greedy, just because they get the savings they may not try and pass it on to others, this is more money in their pocket.
3. This is also one reason that many companies (large ones) are turning to network marketing to get more of their products to fly off the self faster, but they aren't bringing their prices down.
Kenney |
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Bikram
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well..product will definitely be cheaper, if no advertising will be done..but the question is, if there won't be any promotion/communication activity (not advertsing as we know), how come we know about the benefits of product..i dont intend to say there isn't any other ways but Advertising is certainly ther bad way and PR second bad way to do so....
promotion should be done but not mass prodcuded celeberal-assembly-line prodcut, that is to say Advertising
www.biksy.com |
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Success Infinites
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The answer will be NO .
because when have more advertising about your product you will get more selling (the customer will know and hear about your product ) and when you have more selling you will have less cost on your products ,and the less cost will makes you more profit .
So what that means is that advertising cost will be 0 cost to you when you calculate the profit you will be getting from that.
and vise versa ,if you don't have advertising you will not get much sales so you will not have the profit and your prices will be higher to make profit for the high cost you are working in .
good luck . |
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kingstubborn
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Yes, but it would be difficult to find about products and their features. |
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Mariposa
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No, there would be some people who wouldn't know about the product so they wouldn't buy it. |
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ciamalo
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Without advertising, nobody knows about the product or service on any great scale very quickly, and products have to cost more to support a business.
Most major conglomerates are advertising their premium brand, but they don't want to lead in sales on that alone. They also aim for the second and third highest-selling brands for their product. The cheaper product is less expensive precisely because the ad budget is much lower, and the major publicity has been generated by the top company brands. The cheaper products reap part of the reward. If you look at most store-branded items, you will find they come from the same manufacturer as the high-ticket items (for example, batteries, film, suntan lotions, etc.) The only difference? The label, and the ad budget. |
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Chris S
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No NOT AT ALL, this is a common misconception. Competetion between companies causes better prices for the consumer. When monopolies exist they can charge whatever fee they wish and nobody can do a thing to stop them. Therefore, competition and advertising keep the prices low and ultimately benefit the consumer. |
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street4success
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Great question!
However, businesses must advertise or risk losing, or never gaining, TOMA (Top of Mind Awareness) in their customer's mind.
The stronger the brand, the less advertising needs to be done. However, it takes a lot of time, effort, and money to build that strong brand!
Steve
VP Marketing |
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