On Wed, 16 Aug 2017 17:36:56 -0400,
wrote:


It depends on the product or service. Yes, if advertising increases
market share and leads to economy of scale (assuming the savings get
passed along), no otherwise. In the case of Budweiser it has led to
increased market share for an inferior product, at no obvious cost
benefit.

I would contend that ads create a demand for items that are
overpriced, not the other way around. Cosmetics may be the best
example of that. They take a nickels worth of animal fat, color and
scent, advertise the hell out of it and sell it for $40 an ounce.

I defy Harry to name anything that advertising made cheaper than it
would be if it wasn't advertised.

On Wed, 16 Aug 2017 18:02:40 -0400, Keyser Soze
wrote:

When I was growing up in New Haven, we had Channel 8, WNHC, the local
ABC affiliate. If you wanted more than that, you had a switch on the
back of your TV to switch to another antenna that was aimed towards New
York City, from which you could get very good reception of New York
stations, including Channel 2 (CBS), Channel 4 (NBC) Channel 5 (Dumont),
Channel 7 (ABC), Channel 9 (WOR), Channel 11 (WPIX) and Channel 13
(forget the affiliation). Channel 3 was a Hartford station and CBS
affiliate.

DC had 4
WRC NBC 4,
WTTG 5 Independent
WMAL(later WJLA) ABC 7
WTOP CBS 9,
Later they added WETA the PBS channel 3 and Ch 20 another independent.

You could get 2, 11 and 13 from Baltimore but it was snowy and the
same stuff as the 3 networks in DC had most of the time.

If you put a big antenna on a pole with a rotor, you could spin around
and get a Redskins game from Richmond (Ch 6) but it was not a very
good picture. That was before they lifted the blackout ban.

I remember when they came out with "Super TV" Channel 50, a
subscription service. There was always someone hacking that signal.
Originally they just buried the horizontal (vertical?) sync pulse in
the sound track and that was trivial to hack. They it got more
complicated. I had the first box but it wasn't worth it to chase it
when they changed. By then I had a BetaMax (circa 75-6) and I was
getting my movies on tape shortly after that.
Originally it was just a few early Beta people swapping tapes around
and then when the Beta 2 came out (77-8?) they started video clubs
where you paid to rent movies, one way or another. Some had a big
subscription rate with all you can eat included, others were pretty
cheap to join and you paid per movie,

On Wed, 16 Aug 2017 21:07:14 -0400, Keyser Soze
wrote:

On 8/16/17 9:02 PM, wrote:
On Wed, 16 Aug 2017 15:34:43 -0400, Keyser Soze
wrote:

What part is wrong? BTW that is not a libertarian issue at all but I
know it is your go to brain fart


Your belief that advertising does not lower prices for products and
services.

How does that work?
I add a large line to my expense column and somehow I can lower prices
and still make a profit.
It is clear you never actually looked at a P&L statement or owned a
business. Ads may generate more business but it is still a cost of
doing business that gets passed on to the customer.


"Ads may generate more business but it is still a cost of
doing business that gets passed on to the customer. "

Think that through for a while and get back to us.

I did and I stay with my original statement. People can charge more
for products that get the false value presented in the ads.
I repeat the example of Busch vs Budweiser. It is basically the same
beer, they don't advertise Busch and it is $2 cheaper than Bud.

On Wed, 16 Aug 2017 21:49:09 -0400, "Mr. Luddite"
wrote:

On 8/16/2017 9:02 PM, wrote:
On Wed, 16 Aug 2017 15:34:43 -0400, Keyser Soze
wrote:

What part is wrong? BTW that is not a libertarian issue at all but I
know it is your go to brain fart


Your belief that advertising does not lower prices for products and
services.

How does that work?
I add a large line to my expense column and somehow I can lower prices
and still make a profit.
It is clear you never actually looked at a P&L statement or owned a
business. Ads may generate more business but it is still a cost of
doing business that gets passed on to the customer.


That's not always the case Greg. Advertising can simply be to increase
market share ... or simply compete for business in the first place.

The idea that all business costs are "passed on" to the customer is
simply not true.


Who pays them? If you are not covering your expenses with your revenue
you are on the fast track to bankruptcy court. (or you are the
government)

On Thu, 17 Aug 2017 01:03:22 -0400, wrote:

That's not always the case Greg. Advertising can simply be to increase
market share ... or simply compete for business in the first place.

The idea that all business costs are "passed on" to the customer is
simply not true.


Who pays them? If you are not covering your expenses with your revenue
you are on the fast track to bankruptcy court. (or you are the
government)

===

Generally production efficiency goes up with higher production volumes
(economy of scale). So if you can grow your top line faster than the
bottom, profits increase as does the possibility of decreasing prices.

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On Thu, 17 Aug 2017 01:22:18 -0400,
wrote:

On Thu, 17 Aug 2017 01:03:22 -0400, wrote:

That's not always the case Greg. Advertising can simply be to increase
market share ... or simply compete for business in the first place.

The idea that all business costs are "passed on" to the customer is
simply not true.


Who pays them? If you are not covering your expenses with your revenue
you are on the fast track to bankruptcy court. (or you are the
government)

===

Generally production efficiency goes up with higher production volumes
(economy of scale). So if you can grow your top line faster than the
bottom, profits increase as does the possibility of decreasing prices.

===

Just re-read that and it's worded incorrectly. Should be:

So if you can grow your top line faster than the cost of production,
profits increase, and raises the possibility of decreasing prices.

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http://www.avg.com

On 8/17/2017 1:03 AM, wrote:
On Wed, 16 Aug 2017 21:49:09 -0400, "Mr. Luddite"
wrote:

On 8/16/2017 9:02 PM, wrote:
On Wed, 16 Aug 2017 15:34:43 -0400, Keyser Soze
wrote:

What part is wrong? BTW that is not a libertarian issue at all but I
know it is your go to brain fart


Your belief that advertising does not lower prices for products and
services.

How does that work?
I add a large line to my expense column and somehow I can lower prices
and still make a profit.
It is clear you never actually looked at a P&L statement or owned a
business. Ads may generate more business but it is still a cost of
doing business that gets passed on to the customer.


That's not always the case Greg. Advertising can simply be to increase
market share ... or simply compete for business in the first place.

The idea that all business costs are "passed on" to the customer is
simply not true.


Who pays them? If you are not covering your expenses with your revenue
you are on the fast track to bankruptcy court. (or you are the
government)


If you are profitable with your existing business, some of those profits
can be re-invested in advertising to increase your market share. In
some businesses margins may have to be cut simply to get a contract to
begin with. Yes, if you can't cover your overall cost of doing
business long term you will eventually go bankrupt but the point I am
making is that costs are not necessary "passed on" to the customer as
you keep repeating. It depends on the type of business. If I had tried
to increase my margins in order to pay for start up costs, advertising
and other non-direct expenses, the number of contracts I received would
have suffered. It's called competition and in my business it was
primarily evaluated on technical responsiveness to the RFQ, price and
delivery schedule. In time reputation also became a major factor.

In the early days I took some contracts at break-even just to get the
company recognized, "in the door" and eligible for future contracts. I
didn't always break even either. One hick-up in the project and I'd
lose money. You have to have a long-term plan and goal although I don't
believe in formal one or five year "business plans". They are for
investors, not the business owner or person who is actually running the
company.

I never borrowed money or even had a bank line. I learned that lesson
from watching another person try to build a company using "other
people's money". He ended up in bankruptcy and investors and vendors
got hurt. All growth in my company was organic with the exception of
one person who wanted "in" badly and bought himself a 10 percent equity
position. He was a tremendous asset, holding two Phd's in physics and
helped get the company a lot of exposure. Otherwise, I relied on
technical competence, delivering what was promised and earning repeat
business. Growth, margins and the rest took care of themselves.

I've often thought about businesses and what I believe to be some of the
mistakes people make. My experience isn't typical, for sure, and it was
not the management of a fully mature, on-going, typical business where
the scorecard are the P&L statements or quarterly returns. If I made
some money on a project I invested it into the company's growth. I
never paid myself a big fat salary. My goal was always to create
something of eventual value to someone else and it paid off.

On Thu, 17 Aug 2017 01:22:18 -0400,
wrote:

On Thu, 17 Aug 2017 01:03:22 -0400, wrote:

That's not always the case Greg. Advertising can simply be to increase
market share ... or simply compete for business in the first place.

The idea that all business costs are "passed on" to the customer is
simply not true.


Who pays them? If you are not covering your expenses with your revenue
you are on the fast track to bankruptcy court. (or you are the
government)

===

Generally production efficiency goes up with higher production volumes
(economy of scale). So if you can grow your top line faster than the
bottom, profits increase as does the possibility of decreasing prices.


That assumes the ads generate enough more volume to bring on the extra
volume and that economy of scale but you are still passing on that
cost to the customer.
The ad fairy is not leaving the extra money under your pillow.

In an attempt to drag this back on point, how many times do I need to
see/hear this ad before it stops being informative and just becomes a
pain in the ass? I wasn't going to buy a magic pillow the first time I
saw the ad and I am even less likely to buy one the 100th time I see
it. (I feel the same way about politicians who call me on the phone or
interrupt my TV show).
If ads were so valuable to customers, why is there such a market for
"ad free" services like satellite radio, HBO and the various media
products like DVDs, streams and MP3s? I am sure Harry could see most
of the movies he stores on his server on "free" ad based TV but he
chooses to watch them without ads. Maybe that is how he got a legal
copy that he could copy freely. He recorded it from broadcast TV with
the ads.

On Thu, 17 Aug 2017 07:00:06 -0400, "Mr. Luddite"
wrote:

On 8/17/2017 1:03 AM, wrote:
On Wed, 16 Aug 2017 21:49:09 -0400, "Mr. Luddite"
wrote:

On 8/16/2017 9:02 PM, wrote:
On Wed, 16 Aug 2017 15:34:43 -0400, Keyser Soze
wrote:

What part is wrong? BTW that is not a libertarian issue at all but I
know it is your go to brain fart


Your belief that advertising does not lower prices for products and
services.

How does that work?
I add a large line to my expense column and somehow I can lower prices
and still make a profit.
It is clear you never actually looked at a P&L statement or owned a
business. Ads may generate more business but it is still a cost of
doing business that gets passed on to the customer.


That's not always the case Greg. Advertising can simply be to increase
market share ... or simply compete for business in the first place.

The idea that all business costs are "passed on" to the customer is
simply not true.


Who pays them? If you are not covering your expenses with your revenue
you are on the fast track to bankruptcy court. (or you are the
government)


If you are profitable with your existing business, some of those profits
can be re-invested in advertising to increase your market share. In
some businesses margins may have to be cut simply to get a contract to
begin with. Yes, if you can't cover your overall cost of doing
business long term you will eventually go bankrupt but the point I am
making is that costs are not necessary "passed on" to the customer as
you keep repeating. It depends on the type of business. If I had tried
to increase my margins in order to pay for start up costs, advertising
and other non-direct expenses, the number of contracts I received would
have suffered. It's called competition and in my business it was
primarily evaluated on technical responsiveness to the RFQ, price and
delivery schedule. In time reputation also became a major factor.

In the early days I took some contracts at break-even just to get the
company recognized, "in the door" and eligible for future contracts. I
didn't always break even either. One hick-up in the project and I'd
lose money. You have to have a long-term plan and goal although I don't
believe in formal one or five year "business plans". They are for
investors, not the business owner or person who is actually running the
company.

I never borrowed money or even had a bank line. I learned that lesson
from watching another person try to build a company using "other
people's money". He ended up in bankruptcy and investors and vendors
got hurt. All growth in my company was organic with the exception of
one person who wanted "in" badly and bought himself a 10 percent equity
position. He was a tremendous asset, holding two Phd's in physics and
helped get the company a lot of exposure. Otherwise, I relied on
technical competence, delivering what was promised and earning repeat
business. Growth, margins and the rest took care of themselves.

I've often thought about businesses and what I believe to be some of the
mistakes people make. My experience isn't typical, for sure, and it was
not the management of a fully mature, on-going, typical business where
the scorecard are the P&L statements or quarterly returns. If I made
some money on a project I invested it into the company's growth. I
never paid myself a big fat salary. My goal was always to create
something of eventual value to someone else and it paid off.



Eventually all of that cost was passed on to the customer. You just
had enough "bank" to eat it during your start up.

On Thursday, August 17, 2017 at 1:22:23 AM UTC-4, wrote:
On Thu, 17 Aug 2017 01:03:22 -0400, wrote:

That's not always the case Greg. Advertising can simply be to increase
market share ... or simply compete for business in the first place.

The idea that all business costs are "passed on" to the customer is
simply not true.


Who pays them? If you are not covering your expenses with your revenue
you are on the fast track to bankruptcy court. (or you are the
government)

===

Generally production efficiency goes up with higher production volumes
(economy of scale). So if you can grow your top line faster than the
bottom, profits increase as does the possibility of decreasing prices.

While I certainly understand your point, I believe there are few examples of the price of an in-demand product's price being reduced. If a company creates a product and it takes off in the market (higher production volumes), that means it's selling well at the current price point and there would be no reason to reduce price (profit). About the only thing that would drive that would be a competitor who takes market share away from you based on lower price or better quality/value.