The Effective Advertising And Misleading Consumer Economics Essay

The Effective Advertising And Misleading Consumer Economics Essay Effective Advertising and Misleading Consumer Over the past few decades advertising has been an important marketing strategy. Advertising is always subjected to change because peoples taste, demographic, cultural and socio economic factors change always. Consumers changing response to advertising is essential to develop more effective and efficient marketing strategies. Chanjin (2000) developed a varying-parameter advertising model specifying advertising parameters as a function of advertising strategies and the market environments to explain the varying nature of the advertising responses. The model is applied to New York City fluid milk market and he concludes his findings that advertising strategies and market environment play important role in determining advertising effectiveness and he further concludes that demographic factors are more important than economic factors(Chanjin, 2000). Companies change their advertising strategies time to time to attract customers as well as keep the existing customers with their products. B ut in some developed countries they have their own self regulatory system in order to stave off the government intervention. Harker(2003) states in his published article that despite claims of social and economic benefits, advertising has always had its critics. However, when dealing with unacceptable advertising, advertisers in developed countries usually choose a self-regulatory approach in order to stave off government intervention. The recent breakdown of one of the worlds longest established advertising self-regulatory programmes in Australia has reopened the 20 years old debate concern with enhancing understanding of such regulatory system(Harker, 2003).Though he states like that , even in some developed countries the advertising misleading consumers significantly sometimes very badly. To face to the race of businesses, companies use varies marketing strategies to attract and retain consumers with their products. Advertising is one of the most efficient marketing tools that most widely used in the world. The issue is it has become a main tool or a media where consumers are misled for products or services. Expressing the finding of the result of his research paper, Howard (2005) says over half of the sample viewed most or all mail and telephone advertising as misleading, and that 38 percent of the respondents regarded most or all television advertising as misleading. Also, findings for the Age groups indicate that two out of three respondents regarded most or all advertising directed at children as seriously misleading (Howard, 2005). Advertising has become a powerful emotional promotion method and now there is a trend of sending advertisements via mobile phones even without prior permission. But Melody(2004) points out those consumers generally have negative attitu des toward mobile advertising unless they have specifically consented to it(Melody, 2004). Generally in most countries attitudes toward the quality and information containing in advertisements are not in a good scale. Richard (1993) explains in his paper that a comprehensive model of attitudes toward advertising includes three personal utility factors (product information, social image information, and hedonic amusement) and four socioeconomic factors (good for economy, fostering materialism, corrupting values and falsity/no-sense). He tested these seven factor model on two independent samples and found most respondents exhibited conflict between an appreciation of the personal uses and economic value of advertising and an apprehension of cultural degradation(Richard, 1993). False information in advertisements significantly decreases the credibility of the product. That is why some standard organizations validate their advertisements before broadcast or expose to general public. Ste phen (1998) conducted a study to investigate whether consumers who are exposed to an advertisement containing a deceptive environmental claim have significantly different attitudes about the advertisements than those consumers exposed to a similar non-deceptive advertisement. He conclude the study mentioning that higher levels of perceived deception were associated with lower level of perceived corporate credibility, less favourable attitudes towards the advertisement, less favourable attitudes toward the advertised brand, and decreased purchase intention toward the product in the advertisement(Stephen, 1998). Marketing Pharmaceuticals-Increasing trend Marketing pharmaceuticals are very dynamic and innovative subject especially in this current business arena. Pharmaceutical industry is one of the most profitable businesses in all over the world. Kesic(2008) states that the world pharmaceutical industry has been changing profoundly in the last decade. Intensive globalization, increased competitiveness and the fight for global market shares create new challengers for pharmaceutical companies. Not only in pharmaceutical industry, but also in most of the business entities, profit maximization is a core objective. However, Chandra(1999) points out that pharmaceutical product companies are not like most other companies because most other companies do not deal with a product which directly affect human health. Reinhardt(2004) highlights that it is not clear that the current allocation of the pharmaceutical industrys revenue dollars to marketing and research development is efficient for societys point of view(Reinhardt, 2004).Kesic (2008) concludes that basic research and development(RD), together with marketing and sales activities two of the most important operative and even more strategic priorities of the world pharmaceutical industry. Having analysed these figures he has found that the biggest, inventive world pharmaceutical companies invest, on average, approximately 16% of their sales into RD and even more, about 26% or more into marketing and sales activities(Kesic, 2009). Drug companies really spend ample amount of money for marketing especially for direct-to-consumer advertising. Lisa(2008) says according to the IMS health report in 2006 in America, drug companies has spent nearly 5 billion on direct advertisements to consumers, and 80 percent increase over what they were spending in 2002(Lisa, 2008).Likewise Chiu(2005) explains that according to the National Institute for Health Care Management, U.S consumers spent $154.5 billion on prescription drugs in 2001.This amount to 10% of total health spending, wh ich account for 14.9 % of the U.S GDP as of 2002.In a publication Parker(2003) states that there is a little doubt that the pharmaceutical industry is a major force in todays economy as measured by both over-the-counter(OCT) and prescription drug sales and further more he says that it seems clear that there have been rather dramatic increases in advertising expenditures by pharmaceutical companies in the past few years. It also seems clear that these expenditures have coincided with significant increases in sales of both OTC drugs and prescription drugs(Parker, 2003). Promoting drugs to consumers directly has become a new trend in all over the world and many pharmaceutical companies have experienced it as a very effective way to market their products. Wilkes et al(2000) points out that direct to consumer drug(DTC) advertising of prescription drugs is affecting patients, doctors, and health care organizations in profound but not always predictable ways. Not only have the numbers of drugs advertised increased, but so have the drug companies advertising budgets directed at consumers. Wilkes et al (2000) further state that several news sources had suggested that drug manufactures earnings have directly benefited from this new promotional strategy(Michael, 2000). According to Moynihan et al(2002)theres a lot of money to be made from healthy people they are sick. Some forms of medicalising ordinary life may now be better described as disease mongering: widening the boundaries of treatable illness in order to expand markets for those who sell and deliver treatments(Moynihan, 2002). Director of research and policy at the National Institute for Health Care Management, Findlay(2000) concludes that Advertising works and pharmaceutical companies have successfully promoted their product to doctors for decades. They are now bringing that marketing survey to the consumer market place. The question is whether -over time-the benefits of raising consumers awareness of specific drugs and the conditions the medicines treat will outweigh the danger that consumers will bring to demand and use some medicines inappropriately(Findlay, 2000). Over-The-Counter Drugs and Paracetamol Advertising Over-the-counter drugs can be purchased any amount without a prescription anywhere in the world. But some researchers have pointed out having some sort of mechanism for issuing these drugs to consumers may reduce misuses. Trends towards greater availability are paralleled by increase in its use for both non-fatal overdoses and suicide. Paracetamol related morbidity and mortality seem to be less frequent in France where the quantity of paracetamol in a single purchase is limited. Although non conclusive, these data add to a body of evidence which suggest that restrictions in the quantity of paracetamol available as a single purchase in other countries can reduce suicide and liver failure related to paracetamol(D Gunnell, 1997).Most of these over-the-counter drugs are advertised frequently in mass media to get and keep attention of consumers on those products. Ashish(1999) in his research paper states that manufactures may attempt to familiarize consumers with brand names in hopes that the consumer will purchase product. The consumer may think that he has heard of this product and assume that it is somehow better than competitive product(Ashish, 1999).In his research paper Hawton(2004) clearly states that suicides and hospital admissions due to paracetamol poisoning reduced after change in legislation which is limiting the size of the available pack of the paracetamol for consumers and in his study he concludes that legislation reducing pack size of analgesics in the United Kingdom has been beneficial and further reduction in pack size could prevent more deaths(Hawton, 2004). Over the counter drug usage among children is very common. Allotey(2004) mentions in his recently published paper Research on the medication of preschool-aged children has suggested that the use of OTC medication is substantial. Kogan et al for instant, found that 54% of three year olds in the United States has been given OTC medications in the 30days preceding the study. In a common survey in New York, 22% of children have taken OTC medication in the preceding 3 day period. Studies in United Kingdom also indicated high rate of OTC medication use among children, ie,28% during a 2-week period and 66% during a 4-week period(Allotey, 2004). Wazaify(2005) emphasizes that increasing availability of non prescription medicines may encourage patients to believe that there is a drug treatment for every ailment. Furthermore, he explains the use of such products may delay/mask the diagnosis of serious illness, with increased risks of interactions and adverse reactions and of self treatment being undertaken when medical aid should have been sought. There is also the potential for misuse and abuse of such products(Wazaify, 2005). According to the Sri Lankan context there are many proprietary products under one generic product. Senarathna(2008) in her thesis of master of philosophy points out that there are around forty registered product of paracetamol in Sri Lanka(Senarathna, 2008).Weerasuriya(1993) points out there were 63 registered paracetamol products in the country in 1993 and paracetamol was the commonest drug registered in the OTC category(Weerasuriya, 1993). Ethics of Advertising OTC drugs It is clear there is an increasing trend of usage for OTC drugs in all over the world. Wazaify(2005) states that in recent years there have been an increasing trend in self-medication with non prescription drugs available in pharmacies and retail outlets and in parallel, more product have been deregulated for purchase without a prescription(Wazaify, 2005). At the same time Solhaug(2006) concludes in his recent abstract publication that only half of the information presented in drug advertisements was correct and clinically relevant and relatively few statements were fault, but a considerable proportion of statements gave an excessively positive picture of the product; hence, in general, this kind of information has no value as a source of information(Solhaug, 2006).Among the publications those point out that drug advertisements are not up to the standard especially OTC drug, Ashish(1999)states in his publication that in reality, it has been observed that pharmaceutical product advert isers often promote their products to achieve their own goals at the potential risk of having an adverse effect on the consumers health and this type of advertising is most often seen in OTC drug product advertisements(Ashish, 1999). Wazaify(2005) points out that the deregulation process has been championed by the pharmaceutical industry, the pharmacy profession and government health policy makers and is supported by the view that patients wish to have a greater role in their treatment choices. Almost all countries in the world has not allowed to pharmaceutical companies to advertise their product to consumers directly. Stremersh(2009) states in his research paper that so far only two countries, New Zealand and the United States, allow pharmaceutical marketers to advertise directly to consumers and in the same paper he further explains that due to this reason patient requests are often accommodated by physicians mainly because they affect physician visit satisfaction and show patients that the physician cares(Stremersch, 2009). Drugs are categorized into few groups and essentially there are two categories which are OTC drugs and prescription drugs. What is categorized as OTC varies from country to country and is dependent on the local legislative framework according to (Buckley, 2004). Many researchers have pointed out over-the-counter drugs has become a public health problem due to misuse, disease mongering and drug abuse and wrong, in appropriate or inadequate information given in the promotional program may have an impact of this health issue(Ashish, 1999, Allotey, 2004, Fernando, 2008, Buckley, n.d.). While there are government agencies charged with monitoring the marketing of medicines, typically this is one of many briefs for these agencies and is often only in a reactive fashion. In other words such monitoring as does occur, occurs only in response to complaints, and even then is often very slow and cumbersome'(Buckley, n.d.). Buckley(n.d.) urges that two things should be happen to put this issue in a correct track which are establishing independent monitoring bodies to police marketing codes of practice with real penalties and paying increased attention to the education of the consumers of pharmaceutical advertising, in particular those with prescribing pow ers(Buckley, n.d.).In Sri Lanka also the situation is almost same like most of the countries in the world. The government has imposed rules and regulations for promoting and advertising pharmaceuticals within the country. In a paper published by the Sri Lanka medical associations ethics committee recently says that Advertisement to the general public should help people to make rational decision on the use of drugs which are legally available without a prescription. They should take account of peoples legitimate desire for information regarding their health, but should not take undue advantage of their concern for their health. Drug advertisement should neither portray nor be directed at children. Advertisement may claim that a drug can cure, prevent or relieve an ailment only if this can be substantial. They should also indicate, where applicable, limitations to the use of the drug When lay language is used, the information should be consistent with the scientific data sheet or other legally determined scientific basis for approval. Language, pictures or sounds, which bring about undue fear or distress, should not be used. The following list illustrates the type of information that advertisement to the general public should contain The name of the active ingredient, using either international non-proprietary names or the approved generic name of the drug The brand name Major indication(s) for use Major precautions, contraindications for warning Name and the address of the manufacturer or the distributor Information to the consumer on price should be accurately and honestly portrayed(Committee(SLMAEC), 2003). Though the guidelines are clear, there is a doubt of implementing and practicing the guidelines in many countries including Sri Lanka. There is a big challenge and responsibility for the government authorities and regulatory bodies in terms of providing correct information to the consumers. Techniques, methods and effective advertising Pharmaceutical industry is in a pressure and Kesic(2008) states that fast globalization definitively reinforces the consolidation of the world pharmaceutical industry. There are so many challengers in pharmaceutical industry and drug companies running after many strategic moves to have sustainable competitive advantage. Direct marketing products to consumer have become one of the innovative methods to win the market comparatively. Buckley(n.d.) states that in United States all drugs may be promoted to consumer, but in practice direct to consumer advertising focuses on OTC and common ailment targeted prescription drugs(Buckley, n.d.). But some authors support to this argument and they mention direct to consumer advertising makes consumer better understanding and make more informative for drugs available to them(Leonard, 1999, Weissman, 2003). On the other hand some researchers like Maguire(1999) points out that American physicians are being asked to rubber stamp self diagnoses and sel f-prescriptions by patients. That is how some advertisements have been influenced on consumers. Kesic(2009) reveals in his paper that it is no surprise that the biggest world multinational pharmaceutical companies invest more than 25% of their sales into marketing activities in a goal to get considerable global market shares. Supporting to the argument of Kesic, Michael adds that not only have the number of drugs advertised increased, but so have the drug companies advertising budgets directed at consumers; the advertisements have also become far more sophisticated(Michael, 2000). A paper published in Thailand in 2005 on Radio drug advertisement situation and regulation in Thailand says advertising has a strong influence on the sale volume of any goods. Drug advertising covers media such as television, radio, newspaper, magazines, internet and printed materials. It further says that radio advertisements can easily mislead people in rural areas because of socioeconomic and educational status(Kittisopee, 2005). Allotey(2004) mentions that OTC medications promoted through televisi on, radio and print advertising directly targeted at women, housewives or working mothers, encourage them not only to self medication but also to dispense OTC medications to their children, because it is important to establish a lifelong pattern of sensible (drug)use'(Allotey, 2004), Ashish(1999) explains that all pharmaceutical advertising is not bad but advertisements should be considered what they are promotions. Drug marketers should always try to follow the unwritten rules of marketing ethics and consider what is best for their consumers before developing a particular advertising strategy. Nowadays the issue is consumer can purchase any kind of drug online. Buckley(2004) highlights in his paper that consumers can purchase all kind of prescription drugs online often without need for a proper prescription and he further points out that most internet pharmacies provide poor quality information(Buckley, 2004). Moynihan(2002) expresses that inappropriate medication carries the dangers of unnecessary labelling, poor treatment decisions, iatrogenic illness, and economic waste, as well as the opportunity cost that result when resources are diverted away from treating or preventing more serious disease(Moynihan, 2002). How consumers are misled -Reliability, Relevance and adequacy of Advertisements Many research papers point out that drug advertisements mislead consumers in many ways directly or indirectly (Sidney, 2002, Michael, 2000, Ashish, 1999, Findlay, 2000). Though it is a common phenomena in all over the world, a practical guide on understanding and responding to pharmaceutical promotion published by the world health organization recently explains clearly how information is given to consumers in advertisements in developed and developing countries. It says while advertisements from developed countries typically contain nearly all of the information listed in the box, this is not always the case in developing countries(WHO, n.d.). The table below published by Hawkins(1993)in his research paper support to the above argument strongly and in the discussion he states that indications were mentioned more often than the negative effects of medicines. Important warnings and precautions were missing in half of the advertisements while side effects and contraindications in about forty percent. Price tended to be given only in countries where a social security system pays for the medicines(Herxheimer, 1993). Nowadays there is a trend of promoting drugs through internet. Buckley(n.d.)mentions on his research paper that most of the internet advertisements provide less information or poor quality information. Many pharmaceutical companies mislead consumers in many ways. A United States Food and Drug Administration(FDA) has issued 88 letters accusing drug companies of advertising violations from August 1997 to Aug 2002(Buckley, n.d.). Most of the time drug companies overstated the effectiveness of the promoting drug and they always keep attention not to highlight its risk. Some companies disseminate advertisements misleading advertisements even after they were warned or cited for violations(Gottlieb, 2002). Some drug companies stimulate consumers to buy expensive or new drugs which has high profit margin and it raises the health care cost of consumers as well as of the country ultimately. Some drugs promoted by pharmaceutical companies have limited Medical beneficiaries but those are heavily advertised because of the high profit margin. Rebecca(2010) says its almost impossible for the public to actually parse the ads and come to their own independent conclusions(Rebecca, 2010). But Weissman(2003)states in his research paper that industrys argument is that patients are highly motivated to seek the best available treatment for their condition and they need and deserve more and better information on which to base their judgement(Weissman, 2003). It is true if the pharmaceutical advertisements provide proper, balance and correct information to their consumers. A research done in Thailand, sharing the findings says that 22% radio advertisements have misled consumers and only 7% of the advertisements have recommended an appropriate dose among studied advertisements. Further more a warning message was found in only 3% of the advertisements and name of the manufacturers were present only 20% of the advertisements collected(Kittisopee, 2005).Weil(2009) is really against the trend of this drug advertisements. He says many adv ised drugs are not only ineffective, but have serious side effects that are frequently played down (and occasionally cancelled) by manufactures. Because advertised drugs have such vast profit potentials, political and financial interests collude to speed them to market before they have received sufficient scientific scrutiny(Weil, 2009). Now there is a trend of using popular characters for marketing advertisements of drugs and sometimes they are neither reliable nor relevance. In a paper published by Michael(2000) says that Now advertisements enlist well-known personalities to endorse pharmaceutical products (Michael, 2000). Lot of people imitate and follow famous personalities and it help pharmaceuticals to reach consumer quickly and in a familiar manner. Criticizing this promotional tactics Weil(2009) says in his report that Sally Field is a talented actor, But what qualifies her to promote Boniva, an osteoporosis drug that is of limited benefit, has worrisome side effects, and for which there are natural alternatives that merit careful consideration?.(Weil, 2009) Drug companies are in the process of promoting their product to consumers in many ways. Sometimes they may use health care professionals to reach consumers because they know that consumer believe professionals who have background knowledge about treatments. Wazaify(2005) points out in his recent published paper that The main factor found to influence the publics choice of OTC medicines was pharmacist recommendation. This is reassuring especially with increasing availability of potent medications without prescription and the increased potential for interactions(Wazaify, 2005). It is one of the indirect marketing methods that the pharmaceutical industry uses. On the other hand people have a belief that over the counter drugs like paracetamol do not have serious side effects. Some over the counter drugs have serious side effects when consumer uses it with some other medications. A very good example is Viagra used for erectile dysfunction. If consumer use it while using nitrate as a treatment of blood pressure, it cause severe drop of blood pressure which is difficult to treat. Buckley(n.d.)says it has mentioned on advertisements but in a much smaller font, it is You must not take Viagra if you are using any nitrate medication including amyl(poppers). It may lead to a severe drop of your blood pressure that may be difficulty to treat. As sexual activity may be a strain on your heart your doctor will need to check whether you are fit enough to use Viagra(Buckley, n.d.). Buckley points out the ordinary people do not know what is nitrate medications and they cannot recognize from this statement that the combination of these two drugs will enou gh to kill them more often. Supporting to this argument Wazaify(2005) mentions that consumers generally believe that only safe medicines are permitted to be sold without prescription and OTC medicines do not usually have serious side-effects(Wazaify, 2005). Some giant pharmaceutical companies have their own physicians, independent monitoring committees and analytical groups etc. They make aware public some new drugs which are effective treatment for some diseases which are common among current generation and they suggest through advertisements, that it may be effective to use their drugs or supplementary product to prevent from those diseases. This is another current trend in the world and basically what they do is label healthy people that they are sick. Supporting to this arguments Moynihan(2002) express his view in this paper stating that Within any disease categories informal alliances have emerged, comprising drug company staff, doctors and consumer groups. Ostensibly engaged in raising public awareness about undiagnosed and under treated problem, these alliances tend to promote a view of their particular condition as widespread, serious, and treatable. Because these disease awareness campaigns are commonly linked to companies mark eting strategies , they operate to expand market for new pharmaceutical products(Moynihan, 2002). Extensive advertising and promotion has put on higher price on pharmaceuticals. Consumer has become the victim of those expensive pharmaceuticals. Dave(2010)says Promotion may affect price through two difference processes. First, promotion may increase demand and/or reduce the absolute magnitude of the demand price elasticity (that is, reduce the price responsiveness of purchasers), which may raise price. Second, the increasing operation cost due to high promotional spending may be shifted to purchasers in the form of higher price. Concluding his findings he states that in addition to potential misuse, the cost of direct to consumer advertising result from increased drug price and increased use of expensive drugs in place of equally effective lower-price drugs(Dave, 2010). Effect of Misleading Many researchers have pointed out that misleading consumer due to unprofessional advertisement of the pharmaceutical industry has created considerable issue to the society in many countries(Herxheimer, 1993, Dave, 2010, Leonard, 1999, Ashish, 1999). There is a reasonable doubt whether consumers spend money for their real requirements of treatments. Moynihan(2002) says drug companies earn lot of money form healthy people and it is better to describe as disease mongering. He further says whereas some aspects of medicalisation are the subject of ongoing debate, the mechanics of corporate backed disease mongering, and its impact on public consciousness, medical practice, human health, and national budgets, have attracted limited critical scrutiny(Moynihan, 2002). There are people who count this criticism and say Direct To Consumer Advertisements (DTCA) fosters rapid detection of disease and promote grater compliance with treatment regimes. Further more they suggest that DTCA is simply pa rt of a wider social trend whereby consumers take greater responsibility for their health care(Hoek, 2002). Pharmaceutical industry may grab ample amount of money from consumers through unprofessional promotions and advertising drugs. Most of the time heavily promoted drugs may has less clinically importance considering the price as the generic drug provide almost similar clinical effect at a cheap price. Parker(2003),supporting to this argument says Prescription drugs such as Celebrex and Vioxx are heavily promoted and cost the consumer just over $2per pill, while generic ibuprofen, which cost the consumer pennies per pill, often work just as well(Parker, 2003). Effective and attractive advertisement can attract consumer towards the product some times without considering the quality or the value of the product. Ashish(1999) states in his publication that Advertising is thought to contribute to the economy as well. By effective promoting increase in promotion of goods and services may occur, which in turn can result in increase in sales and the flow of money within society(Ashish, 1999).B ut some researchers expresses a different idea about the relationship between drug price and drug advertisements. They point out when drugs are advertised, the market is more competitive and due to that the price of the particular drug reduces. Research has generally found that advertising tend to reduce price, rather than increase them, primarily because advertising makes markets more competitive(Calfee, 2002). Sometimes drug advertisement give wrong information due to many reasons for consumers and it is affected for less dose or overdose usage of drugs. A general problem associated with drug advertisements is that it is a powerful influence which may motivate consumers to select overly expensive, overrated, or less than optimum medications for their particular needs. More specifically, it is possible to identify numerous individual problems associated with the promotional practice(Ashish, 1999). Our culture very much believes in the More in Better principle and consumers sometimes even hospitalized or suffer from serious long term complications due to this misleading information. Galapatti says it is important that media try and make people aware of the side effects and danger of excessive usage of these