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 specialized
publications, and focus instead on other kinds of promotional programs, such as the
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
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