Chapter 9
Consumerism and Advertising
In Partial fulfilment of the subject ECON “BASIC ECONOMICS with AGRARIAN REFORM &
TAXATION”
For the 2nd Semester SY 2013 – 2014
Submitted by:
Submitted to:
Dr. Gilbert C. Corsame
Professor
Table of Contents
I. Introduction
II. Summary
III. History
IV. Conlusion
V. Referrences
Introduction
In this chapter, we look at the rights of the consumer and consider
two perspectives on advertising. In the process of maximizing the
utility he derives from consuming a bundle of goods and services, the
consumer needs to be made aware of his rights and privileges.
Likewise, he must be cognizant of the likely effects of advertising on
his consumption behaviour as well as the effects of advertising on
business practices.The great economic boom of the 1920s was brought
about to a considerable extent by advertising. During the 1920s, sales
of radios rose rapidly. The radio was a completely new medium which
allowed instant contact with large numbers of people. By the end of
the 1920s the majority of homes in the USA had access to a radio9,
even if they did not own one themselves. All broadcasting in the USA
was commercial, which meant that it had to be financed by
advertisements. companies were quick to take advantage of the
opportunities that the radio offered. Radio programmes were punctuated
with adverts and songs were produced praising products. The American
public was bombarded with information encouraging them to buy new
consumer goods.
The motor car industry was at the forefront of advertising. Henry Ford
had started out by telling the American people that 'Every American
family should have one', meaning one of his cars. When this slogan no
longer worked, he changed it to 'Every American family should have
two'.
The great advantage of the new consumer goods was that they made life
easier and provided better entertainment. The washing machine, the
vacuum cleaner and the cooker all meant that women did not have to
spend so long carrying out boring household chores. For the first time
they actually had time on their hands, always assuming that they could
afford to buy the new products in the first place. But even if they
could not afford them, there were plenty of ways to buy something that
they couldn't not afford.
Historical Origins of Consumerism
Consumerism is a social and economic order thatencourages the purchase
of goods and services in ever- greater amounts. Sometimes, the term
"consumerism" is also used to refer to the consumerists movement,
consumer protection or consumer activism, which seeks to protect and
inform consumers by requiring such practices as honest packaging and
advertising, product guarantees, and improved safety standards.In this
sense it is a movement or a set of policies aimed at regulating the
products, services, methods, and standards of manufacturers, sellers,
and advertisers in the interests of the buyer.
In economics, consumerism refers to economic policies placing emphasis
on consumption. In an abstract sense, it is the belief that the free
choice of consumers should dictate the economic structure of a
society. The term "consumerism" was first used in 1915 to refer to
"advocacy of the rights and interests of consumers" (Oxford English
Dictionary) but in this article the term "consumerism" refers to the
sense first used in 1960, "emphasis on or preoccupation with the
acquisition of consumer goods" (Oxford English Dictionary).
Consumerism has weak links with the Western world, but is in fact an
international phenomenon. People purchasing goods and
consumingmaterials in excess of their basic needs is as old as the
first civilizations (e.g. Ancient Egypt, Babylon and Ancient Rome). A
great turn in consumerism arrived just before the Industrial
Revolution. In the nineteenth century, capitalist development and the
industrial revolution were primarily focused on the capital goods
sector and industrial infrastructure (i.e., mining, steel, oil,
transportation networks, communications networks, industrial cities,
financial centers, etc.) At that time, agricultural commodities,
essential consumer goods, and commercial activities had developed to
an extent, but not to the same extent as other sectors. Members of the
working classes worked long hours for low wages – as much as 16 hours
per day, 6 days per week. Little time or money was left for consumer
activities.Further, capital goods and infrastructure were quite
durable and took a long time to be used up.
Henry Ford and other leaders of industry understood that mass
production presupposed mass consumption. After observing the assembly
lines in the meat packing industry, Frederick Winslow Taylor brought
his theory of scientific management to the organization of the
assembly line in other industries; this unleashed incredible
productivity and reduced the costs of all commodities produced on
assembly lines. While previously the norm had been the scarcity of
resources, the Industrial Revolution created an unusual economic
situation. For the first time inhistory products were available in
outstanding quantities, at outstandingly low prices, being thus
available to virtually everyone. So began the era of mass consumption,
the only era where the concept of consumerism is applicable.20th and
21st Century• Beginning in the 1990s, the most frequent reason given
for attending college had changed to making a lot of money, outranking
reasons such as becoming an authority in a field or helping others in
difficulty. This correlates with the rise of materialism, specifically
the technological aspect: the increasing prevalence of compact disc
players, digital media, personal computers, and cellular telephones.
Madeline Levine criticized what she saw as a large change in American
culture – “a shift away from values of community, spirituality, and
integrity, and toward competition, materialism and disconnection.”•
Businesses have realized that wealthy consumers are the most
attractive targets of marketing.The upper class tastes, lifestyles,
and preferences trickle down to become the standard for all consumers.
The not so wealthy consumers can “purchase something new that will
speak of their place in the tradition of affluence”.
A consumer can have the instant gratification of purchasing an
expensive item to improve social status.• Emulation is also a core
component of 21st century consumerism. As a general trend, regular
consumers seek to emulate those who are above them in the social
hierarchy. The poor strive to imitate the wealthy and the wealthy
imitate celebrities and other icons. The celebrity endorsement of
products can be seen as evidence of the desire of modern consumers to
purchase products partly or solely to emulate people of higher social
status. This purchasing behavior may co-exist in the mind of a
consumer with an image of oneself as being an individualist.Conspicuous
Consumption.Conspicuous consumption is the spending of money for and
the acquiring of luxury goods and services to publicly display
economic power — either the buyer’s income or the buyer’s accumulated
wealth. Sociologically, to the conspicuous consumer, such a public
display of discretionary economic power is a means either of attaining
or of maintaining a given social status. Moreover, invidious
consumption, a more specialized sociologic term, denotes the
deliberate conspicuous consumption of goods and services intended to
provoke the envy of other people, as a means of displaying the buyer’s
superior socio- economic status.
Summary
The consumer has four rights: right to be informed, right to choose,
right to heard, and right to safety. The right to informed is the
right to seek out accurate information about products and services.
The right to choose is the right that practice comparative shopping
and in exercising judgement. The right to be heard is the right where
to go for help when seeking redress and speak up when errors occur.
And the last rights is the right to safety, the right to safety is the
right to read and heed warning labels and assume some personal
responsibility for taking normal precautions in the use of any
product.
The two views of advertising are traditional view and new
perspective. The traditional view of advertising thinks advertising is
a redundant and economically wasteful expenditure since it generates
economic concentration and monopoly power. The new perspective is a
kind of view that sees it is an efficient way for providing
information to consumers and enhancing competition.
Consumerism is a social and economic order that encourages the
purchase of goods and services in ever-greater amounts. Early
criticisms of consumerism are present in the works of Thorstein
Veblen (1899). Veblen's subject of examination, the newly emergent
middle class arising at the turn of the twentieth century,comes to
fruition by the end of the twentieth century through the process
of globalization. In this sense, consumerism is usually considered a
part of media culture.
The term "consumerism" has also been used to refer to something quite
different called the consumerists movement, consumer
protection or consumer activism, which seeks to protect and inform
consumers by requiring such practices as honest packaging and
advertising, product guarantees, and improved safety standards. In
this sense it is a movement or a set of policies aimed at regulating
the products, services, methods, and standards of manufacturers,
sellers, and advertisers in the interests of the buyer.
In economics, consumerism refers to economic policies placing emphasis
on consumption. In an abstract sense, it is the consideration that the
free choice of consumers should strongly orient the choice what is
produced and how, therefore the economic organization of a society
(compareproducerism, especially in the British sense of the
term). Also this vote is not "one man, one voice", but "one dollar,
one voice", which may or may not reflect the contribution of people to
society.The amount of advertising and marketing North Americans are
exposed to daily has exploded over the past decade; studies show, that
on average, people living in urban centres see up to 5,000 ads per
day. [1] At the gas pumps, in the movie theatre, in a washroom stall,
on stickers on fruit, during sporting events—advertising is pretty
much impossible to avoid.The challenge of the future may be finding
public and private spaces that are free of advertising.
The amount of advertising and marketing North Americans are
exposed to daily has exploded over the past decade; studies show, that
on average, people living in urban centres see up to 5,000 ads per
day. [1] At the gas pumps, in the movie theatre, in a washroom stall,
on stickers on fruit, during sporting events—advertising is pretty
much impossible to avoid. The challenge of the future may be finding
public and private spaces that are free of advertising.
Conclusion
Therefore I conclude that this chapter is all about the consumers
and products’ advertising. Being a consumer you must know your rights
in choosing and buying products. Apply the four rights before shopping
and exercising judgement in a product. The advertising has two
perspectives and this perspective had an effect in our economy.It can
be concluded that advertising is one of the main factors contributing
to the obesity epidemic in children by marketing products to them that
are utterly lacking in nutrition; therefore making the products seem
appealing to them with their lack of nutritional knowledge. There is
an overall lack of nutritional knowledge among consumers in America in
general. This can be seen in the obesity epidemic, and is also
apparent in the various eating disorders that seem to have skyrocketed
in the last few decades. Advertising doesseem to have a negative
effect on the overall health and well being of society, which can be
seen in the statistics and data that have been reviewed. Fortunately,
there are definitely plenty of solutions and steps that can be taken
by different people to help change the direction in which advertising
is going.In conclusion, it is apparent that advertising plays a key
role in increasing sales, forms buying trends and promotes products,
resulting in overconsumption in people these days. Being aware of
advertising’s power and consider real demands can help buyers control
their expenditure.Advertising plays a key role in increasing sales,
forms buying trends and promotes products, resulting in
overconsumption in people these days. Being aware of advertising’s
power and consider[ing] real demands can help buyers control their
expenditure.
References:
Economics: an Introduction
http://www.emeraldinsight.com
http://www.bookrags.com/Consumerism
JoseLuisValencia/the-power-of-advertising
