‘Advertising misleads customers and increases the cost of products.’ Do you agree with this statement? Give reasons in support of your answer.

Yes, I do agree with this statement. The following facts clarify it:

(i) Confuses the Buyers: Many a time distorted version of reality is shown in the advertising. Believing in advertising, consumers buy the product. On its use, he feels cheated. He comes to realise later that the information given in the advertisement was something else whereas the actual product was quite different from it. Thus, people lose confidence in advertising because of wrong presentation. In this reference it is said that advertising confuses rather than helps.

(ii) Adds to Costs: An organisation has to spend large amount on advertising. It increases the cost of the products. To meet this expenditure, price of the product is raised. No manufacturer pays for the advertising expenses out of his pocket. Advertising, therefore, leads to unnecessary rise in prices. In this reference it is said that advertising costs are passed on to the consumers in the form of high prices.

OR

No, I do not agree with this statement. The following facts clarify it:

(i) It does not Confuse the Buyers: It is true that sometimes the reality is distorted in the advertisements, but the buyers happen to be rational beings and, therefore, they decide to purchase a product only after evaluating every aspect of it. However, if they have no information about any aspect, they can get it from the seller. Hence, it is wrong to say that advertisement confuses the buyers.

(ii) It does not Increase Costs: It is said that advertisement causes unnecessary increase in costs. However, the reality is that advertisement increases the demand for a product which in turn raises the scale of production. A lot of saving is affected in case of large production.

Therefore, it can be said that advertisement is helpful in making available good quality products and services at cheap rates.