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URL:  https://boards.fool.com/hi-jcradd-advertising-aside-from-just-25013258.aspx

Subject:  Re: Here's your chance: Balance the Fed budget Date:  1/8/2007  3:07 PM
Author:  Dwdonhoff Number:  200582 of 603841

Hi jcradd,

Advertising, aside from just communicating the actual existence and attributes of the product, adds no value and is a waste of resources. A battery with the same performance, but which has more TV commercials, doesn't have any additional real value, yet costs (someone) more.

Unfortunately, this is wrong. Advertising CAN increase sales VOLUME, which then may increase the net revenues to a provider EVEN AFTER the additional costs of the advertising.

Example;
Both identical Battery A and B cost 50 cents to bring to market, and sell at $1 on the shelf.
Battery A spends 10 cents additional, per unit, on advertising.
Battery B spends nothing on advertising, believing it is an "unethical waste of resources."

Battery A sells 10,000 units.
Battery B sells 2,000 units.

Battery A had a 40 cent (after advertsising costs) marginal gross receipt, for a total gross revenue of $4,000.
Battery B had a 50 cent marginal gross receipt, for a total gross revenue of $1,000.

Which Battery Company delivered more value?

Let's swap out the battery example to Petroleum Automobile versus Alternative Energy Automobile.
Let's assume all aspects of the two are identical EXCEPT;
A) The alternative fuel costs twice as much,
B) the alternative vehicle gets 3 times the mileage.

The general public makes their buying decisions emotionally, NOT logically. Emotionally, the consuming public is short-sighted and will also tend to avoid change. Merely "presenting the facts" is ineffective by itself in creating the social and emotional momentum of change. High powered persuasive strategies CAN be very much to the public good!

The only ethical form of persuasion is through the presentation of facts and logic. Period. End of story. Anything else is unethical, at least to the same extent that forcing someone at gunpoint is unethical. If you want to argue that somehow the ends justify the means, that can be done just as easily with force/violence as with any other form of "persuasion".

The ONLY way you can take this position is to make the profession of teaching "unethical." Likewise, 100% of ALL politics would be "unethical" (and even *I* am not THAT cynical ;~)

People make their economic decisions emotionally, not logically. to ignore this entirely IS unethical.

Anyone who knowingly has a superior offering, and fails to use available persuasive methods to guide consumers away from inferior offerings, is acting unethically.

I believe we can agree to what is good, and bad.
I believe we can agree that it is ethical to guide people for their better interests.
That is what persuasion is best used for.

Cheers,
Dave
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