How advertising may shift purchases between firms and industries Dissertation

How advertising may shift purchases between firms and industries - Dissertation Example persuasive advertising was conceptualised to modify, alter and twist consumers’ tastes. It warps the information that consumers receive, sometimes confusing them or worse, misleading them, making it very hard for them to make informed choices. As it is, basic consumer theory is founded on utility functions, and utility itself is characterised as the satisfaction drawn from the ownership of consumption goods and services. These goods are essential as they gratify the needs and wants of the individual. These physical and psychological needs are known as â€Å"preferences,† and these are believed to be given and to change slowly over time. Persuasive advertising is aimed at affecting and modifying consumers’ preferences. Economic literature is equally divided on the informative or persuasive nature of advertising. Marshall calls it, constructive advertising that is, these are â€Å"measures designed to draw attention to opportunities for buying and selling† and combative advertising which, according to Marshall, involves social wastes. The conventional notion of advertising exemplified in the writings of Kaldor, Bain, Galbraith, and Comanor and Wilson is predisposed to a negative stance of its expediency. The whole contention is that advertising plays a role in bending consumer preferences, whereby consumers are convinced and influenced to buy products that are heavily promoted, in consequence, there exist the exploitation of market power by charging higher prices for branded products.