Business Concept

Impact of Advertising on Monopoly

The competition in the market is relatively high in present market conditions which force the marketers to select the most powerful communication methods. The marketer has to give more concentration on the distribution channels and availability of the products. The pricing also plays an important role in the formulation of buying motive of a consumer. Experts suggest that the frequent advertising of a particular product which is quality based can reduce the competition and creates the condition for monopoly. Aggressive advertising leads to strong brand loyalty that normally creates kind of barriers to the competitors to penetrate into the market. This fuels the monopoly which can bring higher profits and prices.

Total or substantial holding of market by one marketer over certain products and services can be termed as monopoly. A brand or quality becomes the specific for a monopolist which is exclusively supplied by them. The exclusive license to sell a product or the foreign collaboration can be a monopoly. It is a dynamic relationship between advertising and monopoly. Different experts have different opinions about the relationship between both. The first group of experts states that advertising is responsible for creating monopolies adversely affecting the consumer interest on a product. They also opioned that brand image is used to create, expand and maintain demand for product in advertising.

A complete picture of a product in the minds of people can be termed as brand image. The emotional and the aesthetic qualities of the product are affixed as the brand image. By aggressive advertising a producer imprints the brand image in the consumers. The producer can also create a separate and distinct segment of market to which the competitors hesitate to enter. The particular advertiser also gets the privilege to increase the prices due to lack of competition to cover the additional expenses.

Author Since: Sep 24, 2018

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