Problem

Denigrating comparative advertising

Other Names:
Criticism of rival products
"Knocking copy"
Nature:

Criticizing a rival's products is a high-risk, but increasingly popular marketing strategy. Some regulators would like to ban it because certain tactics can be "unfair" and "denigrating", although they may not be "false" or, strictly speaking, "misleading". The reasoning behind restricting such advertisements is partly cultural taste, but legally often is to respect for the "sole user rights" which some companies have over their logos (sometimes even the names) of their brands.

Incidence:

In the USA, about 30% of the 25,000 advertisements shown each year on network television are comparative. Most are direct comparisons. Fewer than 1% are challenged by competitors. For example, the overnight courier company, Federal Express, established itself solidly and quickly in the marketplace by knocking America's leisurely postal service, without any backlash. Almost all the 200 brands in the $900 million American breakfast-cereal market use comparative advertising (since it is tightly contested, and only 31 brands have more than 1% of the market). The breakfast cereal "Total" was successfully launched into the market by saying it was the same as Kelloggs's "Cornflakes" but with more vitamins. However, a two-party slugging match can simply subtract value from the whole market. Two years of slanging in America between soyabean and palm-oil companies about the deleterious effect on health of each other's products, did nothing but stop many people from buying all edible oils and reverting to other fats. A computer company was ordered by a UK court to change false information in one of its advertisements about the price of one of its competitor's models.

Claim:

Free-market arguments supporting the free flow of consumer information and lower barriers to market entry must be balanced against the dangers of deceptive or slanderous advertisements and against intellectual property claims by companies over their branded images.

 

Counter Claim:

Comparative advertising makes little sense for an established brand, but is an efficient was for new brands – especially fast-moving consumer goods – to break into markets, or for established but "tired" ones to regain lost market share.

 

Problem Type:
E: Emanations of other problems
Related UN Sustainable Development Goals:
GOAL 12: Responsible Consumption and Production
Date of last update
06.05.2019 – 17:44 CEST