Chapter 21 – Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion
21–18
14. Discuss the two major perspectives of the economic impact of advertising: “advertising = market
power” and “advertising = information.” (LO4)
The Advertising = Market Power perspective reflects traditional economic thinking and views
advertising as a way of changing consumers’ tastes, lowering their sensitivity to price, and building
brand loyalty among buyers of advertised brands. This results in higher profits and market power for
large advertisers, reduces competition in the market, and leads to higher prices and fewer choice
alternatives for consumers. High prices and excessive profits give advertisers even more incentive to
15. Discuss the role of ethics in advertising and promotion. How do ethical considerations differ from
legal considerations in developing an integrated marketing communications program? (LO1)
While many laws and regulations determine what advertisers can and cannot do, not every issue is
covered by a rule or guideline. Ethics involve the use of moral principles and values in evaluating a
decision or action. Ethical considerations are very important in advertising as the use of a particular
16. What is your opinion of Benetton’s shock advertising campaign that featured portraits of death-row
inmates such as the one shown in Exhibit 21-4? Do you agree with Benetton’s position that it was
trying to raise social consciousness of controversial issues such as the death penalty or do you feel
that the campaign was used to generate publicity for the company?(LO2)