Re: Financing of media.

[kl811af@xxxxxxxxxxxxxxxxxxxxxxx]

On Thu, 28 Jul 1994, Herbert Gintis wrote:

> >> 	E.g., Coke and MacDonalds advertize like crazy, but people want
> >> their products without the advertizing (fast food). That's why they
> >> have no trouble expanding into new markets around the world.

I contended:

> >More generally: What we observe is much advertizing by McDonalds and it's
> >worldwide success. The natural suspicion would be that the one has to do
> >with the other. Who claims otherwise should deliver extremely
> >compelling evidence.

Herbert Gintis replayed:

> 	What you observe is a correlation between success and level of
> advertizing. From that you can't derive causality. McDonald's was
> small and grew like crazy because people liked it. Only when there
> arose copy-catter (Burger King, Jack in the Box, et al.) was
> advertizing vaulted to a prominent place in their growth strategy.
> They advertize as a way to compete against other fast-food providers.
> To say that advertizing increases the volume of fast-food sales is in
> no way warranted.

Of course, what I observe is only correlation. But there seems to be some
"natural", common sense way of interpreting this correlation as
causality: If they spend such an amount of money on advertizing
it's probably because it pays. (Common sense could be wrong, so I asked
for evidence to the contrary.)

May well be that McDonalds in the USA grew without much advertizing, it
surely didn't so in Germany. That's what I wanted to say with my little
story about my nephew: Most of us were some time ago in the situation of
my nephew. We didn't know the kind of food which McDonald's et al. sells,
and there had to be created new tastes in children and adults alike.
McDonald's succeeded in this and it doesn't seem far fetched to assume,
that the concomitant massive advertizing had to do with that feat.

Andreas Goesele
Institut fuer Gesellschaftspolitik
Kaulbachstr. 31a
D-80359 Muenchen