GMAT : Analysis of An Issue

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An Issue


44. All companies should invest heavily in advertising because high-quality advertising can sell almost any product or service.


Question


Discuss the extent to which you agree or disagree with the opinion expressed above. Support your point of view with reasons and/ or examples from your own experience, observations or reading.


Analysis


The speaker claims that high-quality ads can sell almost anything and that companies should accordingly invest heavily in such advertising. I agree that the quality of an ad can in some instances play a pivotal role in a product's success or failure in the marketplace. However, the speaker over generalizes, for advertising is far more critical in some businesses and for some products than for others.

Certain types of businesses benefit greatly from investing in high-quality advertising. Fledgling companies, for example, may require an extensive top-note advertising campaign to achieve the name recognition that older competitors already enjoy. Even established companies may need an expensive ad campaign when introducing new products or venturing into new markets. Companies selling products that hold no utilitarian value perhaps stand to gain the most from an extensive high-quality advertising effort. Consider, for example, the kinds of products that are marketed by means of the most extensive and expensive advertising: beer, cigarettes, soft drinks and cosmetics. None of these products has any utility. Their success depends on consumers' fickle tastes, their emotions and their subjective perceptions. Accordingly, influencing consumer attitudes through popular and appealing ads is about the only way to increase sales of such products

In some industries, however, substantial investment in high-quality advertising simply does not make sense from a cost-effectiveness viewpoint. Pharmaceutical companies, for example, might be better off limiting their advertising to specialize in publications and focus instead on other kinds of promotional programs, such as to distribution of free samples. And widespread flashy advertising would probably have a limited effect on overall sales for companies such as Deere and Caterpillar whose name recognition and long-standing reputations for quality products are well established and whose customers are unlikely to be swayed by sensational ads.

In sum, the speaker over generalizes. Not all companies have an equal need to invest heavily in high quality advertising. Companies with new products and products that have little utility stand to benefit most from expensive, high-quality advertising. But other companies, especially those whose customers are businesses rather than consumers, would be better off focusing on product quality and reputation, not on sensational advertising.

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