...Has banking deregulation contributed to the current economic crisis and if so how? Can advertising (or) marketing (or) public relations help restore trust in the banks? Most of the world has been affected by what has been called the global recession. Banking deregulation is undeniably the main cause of the financial crisis. This essay is going to demonstrate why this is by covering key events, which have lead to the crisis, and highlighting some possible marketing solutions to the trust issue that has resulted from it. The Great Depression in the 1930s provoked the US government to introduce new regulations in order to reform banks and ensure that there would never be another crisis of its type again. These reforms came under the name of the banking act of 1933, commonly referred to as the Glass-Steagle act. Crucially most of the new laws meant that retail and investment banks were to be kept separate and investments could not be made if a return was unlikely. However, over 50 years later these laws became more relaxed as the banks were always pushing to be privatized, as they knew they would be able to make more money (Robert Weissman, 2009). It was then believed that the financial world had changed so much since the Great Depression that the regulatory rules were outdated and that the banks would be able to manage themselves, the decision was also influenced by $300 million of lobbying (PBS, 2003). The Glass-Steagle act was revoked in 1999 by president Clinton, this removed...
Words: 1538 - Pages: 7
...Education Consumers’ Attitude towards Advertising Uchenna Cyril Eze1 & Chai Har Lee2 1 2 Monash University, 46150 Selangor, Malaysia Multimedia University, 75450 Bukit Beruang, Melaka, Malaysia Correspondence: Chai Har Lee, Multimedia University, Jalan Ayer Keroh Lama, 75450 Bukit Beruang, Melaka, Malaysia. Tel: 60-123-633-730. E-mail: chaiharlee@gmail.com Received: March 21, 2012 doi:10.5539/ijbm.v7n13p94 Accepted: June 15, 2012 Published: July 1, 2012 URL: http://dx.doi.org/10.5539/ijbm.v7n13p94 Abstract Advertising is a growing business and with advances in the Internet technology, the dynamics and landscape of the business has changed as well. Prior findings on consumers’ attitude towards advertising are mixed. This paper is an attempt to examine young adults’ attitude towards advertising. We conceptualized a framework to examine the influence of six independent variables namely consumer manipulation, product information, hedonic/pleasure, economic condition, social integration, and materialism on consumers’ attitude towards advertising. Participants were selected from the southern region of Malaysia. The data were collected through personal administration, and had 217 valid responses. The analysis reveals that four of the six hypotheses were supported. Consumer manipulation emerged negative, which is consistent with past findings. These findings would enable practitioners to be more consumer-sensitive to ensure that the advertising campaigns are properly conceived to avoid...
Words: 7846 - Pages: 32
...Advertising in the press: an ethical issue In September 2012, the French newspaper Libération released a front page that produced controversies. Bernard Arnault, CEO of luxury firm LVMH, appeared above the statement “Casse-toi riche con”. The sentence refers to the Bernard Arnault’s application for Belgian citizenship. After few days of verbal struggle between the CEO and the newspaper, Liberation said LVMH and other firms cancelled for €700,000 in advertising, in response to the front page1. The loss of such a sum can threaten the financial health of the newspaper, whose global sales are around 60 million €. What should Libération have done? Avoid criticizing LVMH’s CEO, to ensure its advertising revenue and financial survival? To deal with the issue of advertising in the press, we need to check its economic weight. In France, the newspaper industry obtains almost 40% of its revenue from advertising2. This number is even bigger in the US (almost 70%). The other 60% are revenues from sales. At the same time, the press industry faces a grave crisis and its benefits are very low. Advertising is thus essential for newspapers survival. Moreover, newspapers have faced the rise of free newspaper for few years. Free newspaper, like the worldwide distributed Metro, find 100% of their revenues in advertising. In front of free news, it has become difficult to sell information. More and more citizens consider today information as a right, and refuse to pay anything for it. The economic...
Words: 4966 - Pages: 20
...Summary The Advertising Standards Authority of Singapore (ASAS) is an Advisory Council to the Consumers Association of Singapore (CASE). It was set up in 1973 to promote ethical advertising in Singapore and is the self-regulatory body of the advertising industry. Self-regulation means the responsibility of ensuring truthful advertising lies with both advertisers and consumers. This works in the interest of both advertisers and consumers because it ensures that through fair play, there is a balance of trust and responsibility between them. In the situation that an investigation into a misleading ad uncovers an unfair business practice, ASAS may refer the matter to CASE for action to be taken under the Consumer Protection (Fair Trading) Act. CHAPTER 1: INTRODUCTION 1.1 BACKGROUND Advertising has been existed for many decades. It is one means of promotional mix which has its ultimate function to set up channels of information and persuasion to sell goods and services or promote an idea (Belch & Belch, 1998; Aaker, 1991). As an integral part of social and economic systems and one of the rapidly growing industries, advertising determines the GDP (Gross Domestic Product), of a country to a considerable extent during the late 1980s (Belch & Belch, 1998; Daniels, 1995). Advertising is considered to be one of the marketing communication tools. Communication is the process of giving or an exchange of information and the science of transmitting...
Words: 1071 - Pages: 5
... I. Describe and identify monopolistic competition. A. Large Number of Firms 1. Small Market Share 2. No Market Dominance 3. Collusion Impossible B. Product Differentiation C. Competing on Quality, Price, and Marketing 1. Quality 2. Price 3. Marketing D. Entry and Exit E. Identifying Monopolistic Competition 1. The Four-Firm Concentration Ratio 2. The Herfindahl-Hirschman Index 3. Limitations of Concentration Ratios 2. Explain how a firm in monopolistic competition determines its output and price in the short run and the long run. A. The Firm’s Profit-Maximizing Decision B. Profit Maximizing Might Be Loss Minimizing C. Long Run: Zero Economic Profit D. Monopolistic Competition and Perfect Competition 1. Excess Capacity 2. Markup E. Is Monopolistic Competition Efficient 1. Deadweight Loss 2. Making the Relevant Comparison 3. The Bottom line 3. Explain why...
Words: 5193 - Pages: 21
...perception of soft drinks and fast foods advertisements and its impact on youth lifestyle and eating habits Today it is a matter of great pride to see that India as a nation stands with a population of 1,166,079,217 (July 2009) and out of which two-third of the population lies below 35 years of age. India is considered as one of the youngest nation in the world. According to various national and international organisations the age group of youth generally lies between 15-35 years. This vulnerable group is being highly influenced by the advertising industry whose focus has shifted from family and elderly to youth and kids. With the increased employment of youngsters due to the entry of BPO’s, KPO’s, MNC’s in the Indian sub-continent, marketers have got a new set of potential buyers in the form of young and restless . This segment comprises of those who are more open to adapt new products, ideas and follow trends set up by advertising world. Advertising today carries the blame of manipulating and duping audience. The moment you open your idiot box for multifaceted reasons you can see a clutter of advertisements, a commercial of 7 up ends up with a girl kissing a boy, ads of all juices making claims that all of them are preservative free, dangerous stunts being performed in ads of Thumps up and Mountain dew, open and free broadcast of inner wears at prime time encouraging the opposite sex to assault. All advertisement of several branded deo’s end in seductive mode. Ads of casual wears...
Words: 3550 - Pages: 15
...monopolistic competition and under perfect competition compare ▪ Desirability of outcomes in monopolistically competitive markets ▪ Debate over the effects of advertising ▪ Debate over the role of brand names o Imperfect competition are those types of markets that are between perfect competition and monopoly ▪ Monopolistic competition is one such example. o Characteristics of Monopolistic competition ▪ Many sellers ▪ Products are slightly different • Producers are not price takers which means they each face a downward sloping demand curve ▪ Free entry and exit, therefore, zero economic profit in the long run ▪ Example: Pho, Cereal? o Short Run Equilibrium of Monopolistic Competition ▪ Profit maximization decision is similar to monopolist • Produce the quantity where MR =MC • Price is set on the demand curve • If P > ATC: profit • If P < ATC: loss (potential similar to short run competitive firm) [pic] o Long Run Equilibrium [pic] ▪ Zero economic profit • If firms are making profit in short run o new firms enter the market...
Words: 673 - Pages: 3
...ideally as an economic system in which the major portion of production and distribution is in private hands, operating under what is termed a “profit” or “market” system. Socialism is an economic system characterized by public ownership of property and a planned economy. Capital, as an economic concept, is closely related to private property. When traditional restraints are removed from the sale of goods and from wages and when all individuals have equal access to raw materials and markets the doctrine of laissez faire, from the French meaning “to let people do as they choose”. Oligopolies—a concentration of property and resources, and thus economic power, in the hands of a few. Corporation—an artificial being, Invisible, intangible, and existing only in the contemplation of law. Limited liability is a key feature of the modern corporation. Consumer sovereignty: the idea that consumers should and do control the market through their purchases. Dependence effect: as a society becomes increasingly affluent, wants are increasingly created by the process by which they are satisfied. Moral vegetarians are people who reject the eating of meat on moral grounds. 2 In my opinion, Wal-Mart is an example of a morally bad corporation. There are three reasons to improve that: (1) Unfair competition. Our textbook describe it like this: “Some critics of capitalism maintain that capitalism breeds oligopolies that eliminate competition and concentrate economic power that a...
Words: 1707 - Pages: 7
...Advertising, is for a specific need to through some form of media, and consumption of certain costs, and wide open to the public through the means of publicity. The original meaning of Advertising is notice, induction, namely and widely known. Advertising has broad and narrow sense. The broad advertising including economic and non economic advertising advertising. Non economic advertisements is that do not profit for the purpose of advertising, such as government administrative departments, social institutions and personal announcements, notices and statements, etc.. This advertisement only refers to economic advertising, also known as commercial advertising, refers to the profit for the purpose of advertising, usually is an important means of information communication between commodity producers, operators and consumers, or an important form of enterprises to occupy the market, selling products, providing services. American association of advertising give a definition of advertising: advertising is the definition of mass communication fee, its final purpose is to transmit information, changing attitudes to the advertising of goods or items, induced by their actions and make advertisers benefit. In the commercial competition intense today, the product quality has not become the key factor for enterprise to defeat their opponent, because of the differences in various enterprises in this area becomes smaller, this is represented by the corporate image and brand awareness...
Words: 1560 - Pages: 7
...1. What is the Schumpeterian concept of “creative destruction”? Creative Destruction’ is a paradoxical term introduced to economic theory in 1942 by the Austrian economist Joseph Schumpeter (1883–1950). He used the term to describe the special form of economic growth that entrepreneurs particularly bring to the capitalist system. Schumpeter argued that it was the entrepreneur’s introduction of radical innovation into the capitalist system that was the real force that sustained long-term economic growth, even as it destroyed the economic value of established enterprises who may have previously enjoyed a degree of monopolistic power. For Schumpeter, the net economic benefit from the radical innovation, in spite of the destruction of existing economic value, was greater than if the radical innovation had never been introduced. So, the term ‘creative destruction’ describes a process of creating net economic growth in the capitalist system where entrepreneurs create more economic value from their radical innovations than is destroyed as their innovation replaces and supplants the established way of doing things. Schumpeter believed that capitalism would ultimately be destroyed by its successes and that this ‘creative destruction’ was just part of the prognosis of capitalism’s future. His great defence of capitalism however, was built on the grounds that capitalism sparks entrepreneurship. He was one of the first economists to truly provide us with a clear concept of this term....
Words: 754 - Pages: 4
...American Economic Journal: Microeconomics 3 (February 2011): 1–36 http://www.aeaweb.org/articles.php?doi=10.1257/mic.3.1.1 Strategic Entry Deterrence and the Behavior of Pharmaceutical Incumbents Prior to Patent Expiration† By Glenn Ellison and Sara Fisher Ellison* This paper develops a new approach to testing for strategic entry deterrence and applies it to the behavior of pharmaceutical incumbents before patent expiration. It examines a cross section of markets, determining whether behavior is nonmonotonic in market size. Under some conditions, investment levels will be monotone in market size if firms do not invest to deter entry. Strategic investments to deter entry, however, may result in nonmonotonic investment because they are unnecessary in small markets, and impossible in large ones. Consistent with an entry-deterrence motivation is the finding that incumbents in medium-sized markets advertise less prior to patent expiration. (JEL D92, G31, L11, L21, L65) T he insight that firms may make “strategic investments” to alter future competitive conditions is one of the most fundamental ideas in industrial organization. Jean Tirole’s (1988) chapter reviewing arguments about how excess capacity, capital structure, advertising, contractual practices, learning-by-doing, and other actions can be used to deter entry is easily the longest in the text.1 Strategic investment models are difficult to test directly, however, and the vast majority of this literature is theoretical...
Words: 15200 - Pages: 61
...Assignment 1 Critical Essay Introduction: This essay will attempt to critically explain how the poor economic climate in the UK might affect the marketing mix of a start-up retail venture in the high street. This essay will walk through the processes of starting a retail business venture in the high street and discuss how the economy and the marketing mix directly effects each step. To do this it will be vital to explore the current economic climate and what a poor economic climate means? A definition of a poor economic climate “a recession is a decline in growth, domestic product for two consecutive quarters and a depression as a prolonged recession resulting in falling prices, reduced purchasing power, excess in supply, unemployment, and a general reduction in business activity” (Downes,j.,& Goodman,J.E.(1995).Dictionary of finance and investment terms Hauppage,nj:Barron’s educational series) This has been the case for the UK since 2007 as we are in what is known as a double dip recession narrowly escaping a triple dip recession. (BBC News 2013, http://www.bbc.co.uk/news/business-22290407) This downturn indicates that the UK is indeed suffering from a poor economic climate having the effect of less spending and so less trade occurring in the local, regional, continental, or global marketplace. How this relates to a start up venture in the high street has both negative and positive effects. To look at each of these effects it is best to look at the entire...
Words: 1935 - Pages: 8
...ADVERTISING AND REGULATORY SYSTEMS A. Introduction In this paper will be discussed concern on advertising and regulatory systems in different parts of the world. Exactly the regulation of government in advertising is really needed to protect the interest of society from unbridled business behavior (Frith, KT and Mueller, B, 2003, p. 85). It is the foundation of ethics and a rule of advertisement. Advertising regulation refers to the laws and regulations that define the specific products that can be advertised on the country/region specific. Rules can include various aspects such as place settings advertising, advertising time, and the content of the ad. There are five main political/economic systems operate in the world that has its own policies structure for dealing with the media, such as the libertarian/capitalist (i.e., the United States), Socialist/capitalist (e.g., Japan, Australia, Singapore, and Britain), Authoritarian/capitalist (e.g., Brazil, Thailand, and Malaysia), Sectarian/authoritarian/capitalist (e.g., Saudi Arabia and Iran), Communist/planned economies (e.g., Vietnam or China). It also will be discussed to study the different of advertising and regulatory systems in several representation of the world. B. Discussion 1. The Definition of advertising and regulatory systems Before differentiating of advertising and regulatory systems in several parts in the world, it is important to understand what that system is. As is known in the introduction that...
Words: 6469 - Pages: 26
...main reason for America’s economic success in the 1920’s [50 marks] Although America remained neutral and did not join World War One until 1917, they were already increasing their country’s profits by selling goods such as: weapons, food, equipment and other ammunition to both sides of the war. During World War One, as well as selling goods, America became ‘the banker’ to the rest of the world: loaning countries money at a very high interest. According to the First World War commissions “Britain, France and Italy owed the USA $22 billion plus interest”, this is showing that USA was at a very stable place financially even before the 1920s began. When the war ended Woodrow Wilson put forward his 14 Points which included a League of Nations. The League of Nations’ overall aim was to prevent war from breaking out again. America’s congress at the time decided that it would be best for America in the long run not to join the League of Nations because, congress believed that the USA should not interfere in any European or world affairs. Refusal to join the League of Nations made America an isolationist country. When Warren G. Harding won the presidential election and became president in 1921 a political party called the Republicans took over from the Democrats and the American government. 1920s America was known as the ‘Roaring twenties’ because of the entertainment and the crazes sweeping the country. There were lots of reasons for the economic boom including: natural resources...
Words: 2565 - Pages: 11
...“The Competitive Effects of Advertising in the US Automobile Industry, - Greuner, Kamerschen and Klein “Organizational or Frictional Equilibria, X-Efficiency, and the Rate of Innovation.” The Quarterly Journal of Economics Leibenstein “X-Inefficiency Xists-Reply to an Xorcist” American Economic Review Leibenstein Introduction paper 1: Is advertising anticompetitive? Some economists argue that advertising performs a useful social function by providing consumers with information about price, product quality, and availability, making markets more competitive and driving down profit rates. Empirical evidence on the relationship between advertising and profitability is mixed. The pioneering study by Comanor and Wilson found a positive and statistically significant relationship between advertising and profits, as did an early study by Shephard. These results were challenged by others because they treated advertising as an expense rather than an investment, overstating the true rates of return to advertising. More recently, other economists have found positive and statistically significant relationships between advertising and profits in US manufacturing. Porter and other economists failed to find a statistically significant effect. As is well known, however, the causal relation between advertising and profit is uncertain, and some of the early studies regressing profit rates on advertising fail to account for the possible endogeneity of advertising. We contribute to this...
Words: 886 - Pages: 4
