1.) Deferred Revenue Expenditure
2.) Misrepresentation of Facts
3.) Increased Cost
4.) Advertising helps to sell bad products
5.) Wastage of National Resources
6.) Survival of Small Companies
1.) Deferred Revenue Expenditure
It is a deferred revenue expenditure, as the results are not immediate. As advertising occupies a substantial portion of the total budget of the organization. Hence, investing a large sum in it does not necessarily yield immediate results thus limiting its utility.
2.) Misrepresentation of Facts
A major drawback of advertising is the misrepresentation of facts regarding products and services. Advertisers usually misrepresent the unreal/false benefits of a product. They come to realize later that the description given in the advertisement was something else whereas the actual product was quite different from it.
3.) Increased Cost
An organization has to spend a large cost on advertising. It increases the expense of the products. To meet this expenditure, the price of the product is increased. No manufacturer of goods or services pays for the advertising expenses out of his pocket. Therefore advertising leads to an unnecessary rise in prices of goods or services. Advertising costs are passed on to consumers in the form of high prices.
4.) Advertising helps to sell bad products
Usually, miracle products that claim they can cure rapidly everything from bad breath are heavily advertised. Consumer’s choice is greatly affected by the advertisement. Advertisement reduces competition among the competitor because not every company can advertise there product. Big industrialists and manufacturers have a huge budget with them so they can advertise easily.
5.) Wastage of National Resources
Products have their life period. Day by day new products gets launched by the company with minor changes. These products attract the customer to buy the new one in place of the old product. Sometimes the product is changed before the end of its normal period of usefulness.
6.) Survival of Small Companies
The advertisement makes it difficult for a small organization to uplift in society. They have to struggle a lot to make the customer aware of their products. They face difficulty to sell their product because another Big player is having a major share of the market.
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