This blog is about Graphic Design, Vector Art, and Cartoon Illustration

Does advertising increase the price of a product?

If someone has told you "our prices are lower because we don't advertise", they were 1) lying to you and 2) assuming you don't know how the price of things are set. The bad news is that a lot of people fall for this scam, but the good news is that you don't have to sit through a lot of boring Economics, Marketing, and Advertising classes, like I did, to understand it. I can explain it in one paragraph. Here it is:

Let's say that I wanted to sell you this pen on my desk. You would look at it, consider what pens normally cost, and make an evaluation. In the real estate world, this is called a "comp", by the way, for "comparison". If I took out full-page ads in The New York Times and hired a whole bunch of celebrities to make commercials, it wouldn't change what you, the consumer, would be willing to pay for the item. It's a pen. I could ask a million dollars for it, but that's not the price. The price is what it will sell for.

There you go. If you have been told otherwise, it's a con. And there are a lot of slick operators out there in the marketing world. Just wanted you to know.