Feb 20 2010

Freakononomics: Chapter 3 – What Is The Effect Of Advertising On Market Demand For A Good Or Service?

Considering chapter 3′s analysis of the transformation of Listerine from an antiseptic to a cure for halitosis, what can one conclude about the effect of advertising on market demand for a good or service?
I guess if you make it a big deal about the item through advertising it causes a high demand?

1 Comments on this post

Trackbacks

  1. Ed Atun said:

    Economist John Kenneth Galbraith argued that a company could create demand for its product solely thru advertising. There was actually no need for the new product but advertising could make people think that they “needed” the new item to make their lives better.
    You are correct. Many people think that ads cause demand. Of course, we know that is not correct. Otherwise every new product would succeed. We know that they don’t succeed. Coke stopped production of its New Coke after spending $Millions. People did not like the taste.

    February 20th, 2010 at 11:50 am

LEAVE A COMMENT

You must be logged in to post a comment.