An overview of comparetive advertising
An overview of comparetive advertising
An overview of comparetive advertising
An Overview of Comparative Advertising
Introduction
Comparative Advertising may be defined as "Advertising that compares two or more specifically named or recognizably presented brands of the same generic product or service class" and make such comparison in terms of one or more specific product or service attributes."
Comparative advertising, as a special form of advertising, is a sales promotion device that compares the products or services of one undertaking with those of another, or with those of other competitors. All comparative advertising is designed to highlight the advantages of the goods or services offered by the advertiser as compared to those of a competitor. In order to achieve this objective, the message of the advertisement must necessarily underline the differences between the goods or services compared by describing their main characteristics. The comparison made by the advertiser will necessarily flow from such a description.
Comparative advertising is a natural extension of Freedom of Speech, and a natural consequence of the free market scenario that we are in today.
"In fact, Comparative advertising in the true sense has often been confused with Disparagement."
Functional Advantages of Comparative Advertising
Comparative advertising enable advertisers to objectively demonstrate the merits of their products. Comparative advertising improves the quality of information available to consumers enabling them to make well-founded and more informed decisions relating to the choice between competing products/services by demonstrating the merits of various comparable products. Based on this information, consumers may make informed and therefore efficient choices.
Comparative advertising which aims to objectively and truthfully inform the consumer promotes the transparency of the market. Market transparency is also deemed to benefit the public interest as the functioning of competition is improved resulting in keeping down prices and improving products. Comparative advertising can stimulate competition between suppliers of goods and services to the consumer's advantage.
Advantages from the Consumer's Point of View
From the Consumer's point of view, Comparative advertising has more advantages than disadvantages. For example, Comparative advertising represents an inevitable part of the consumer decision-making process, particularly at the evaluation stage.
Consumer wants needs and looks for more information to help him in making decisions. Comparative advertising can facilitate efficient decision-making, and fill the gap in the consumer's search for meaningful information.
Risks of Comparative Advertising
Comparisons between goods and services of different undertakings carry with them some significant risks. There is a danger that once undertakings address the merits and inadequacies of competing goods or services, they may be tempted to denigrate them or derive unfair advantages from such inaccurate comparisons. Just like traditional forms of advertising, comparative advertising seeks to both assist the development of the undertaking concerned and to inform consumers. Although both forms of advertising seek to attract customers, in case of comparative advertising, commercial relationships may be exposed to the constant threat of unfair practices.
Characteristics of True Comparisons
Much of the criticism against Comparative advertising is really directed towards Disparagement, rather than against true comparisons.
True Comparisons should have three characteristics:
Two or more specifically named brands
Two or more attributes of the good or service
A statement, implication or demonstration of factual information, as a basis for the claim
The risk of consumer confusion and deception through Comparative advertising occurs in the following situations,
When advertisers of two or more competing brands make substantiated but irreconcilable product claims
When there are incomplete comparisons
India Attitude towards Comparative Advertisement
In India, the "Advertising Standards Council of India (ASCI)" specifies that comparative advertisement is permissible if:
The aspects of the products compared are clear
The comparisons do not confer artificial advantages on the advertiser
It is factual and substantiable
The consumer is unlikely to be misled
There is no unfair denigration of the competing product
US Attitude towards Comparative Advertising
The Federal Trade Commission, when it was founded in 1914, had as its mission to protect businesses against unfair practices. In 1922 the Supreme Court ruled that the FTC has the right to regulate advertising.
In 1963 the FTC narrowed an order with respect to comparative advertising so as to allow firms to make "truthful and non-deceptive statements that a product has certain desirable properties or qualities which a competing product or products do not possess.
"The Commission has supported the use of brand comparisons where the bases of comparison are clearly identified. Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions. Comparative advertising encourages product improvement and innovation, and can lead to lower prices in the marketplace." (Statement of Policy Regarding Comparative Advertising, Federal Trade Commission, Washington, D.C., August 13, 1979)
Europe Attitude towards Comparative Advertising
While in the United States comparative advertising has been a well-recognized and acceptable form of advertising, Europe was divided in this point of view. There was a significant difference in Europe in the Seventies. The majority of European countries have been hostile to such advertising for a long time and this form of advertising was considered as unfair market practice.
After the EC Legislation, Comparative advertising is considered as a legitimate means of informing consumers of the advantage of the product or service compared with that of a competitor. The EC accepted the comparative advertising both by the legislation and by the court practice.
The reform is achieved by amending the Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising. European Parliament and of the Council adopted an amending Directive the "Directive 97/55" in 1997 which states that, Comparative advertising shall be permitted when the following conditions are met:
(a) It is not misleading
(b) It compares goods or services meeting the same needs or intended for the same purpose
(c) It objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price
(d) it does not create confusion in the market place between the advertiser and a competitor or between the advertiser's trade marks, trade names, other distinguishing marks, goods or services and those of a competitor
(e) It does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor
(f) For products with designation of origin, it relates in each case to products with the same designation
(g) it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products
(h) It does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name
Conclusions
Sticking to hard facts and meaningful issues is always a good idea. Avoiding any negative references to competitive products, and showing both products in a fair and equal manner goes a long way towards ensuring that comparative advertising is fair and accomplishes its dual mission - that of educating the consumer and selling the product.
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