Advertisement is one of the chronic processes to attract customers towards any product. Present-day customers are mostly influenced by advertisements as this world is living in the digital era. Advertisement firms and business institutions are taking this chance by creating innovative advertisements for various businesses. Comparative advertisement is one of such recent innovation that is growing in popularity among the competing business players. Many business institutions have also started to use this method of Comparative Advertising in Bangladesh. Now the question is that whether the legal system of Bangladesh considers this method as harmless exaggeration or illegal. This paper will also discuss the foreign law relating comparative advertisement and what the international standpoint on this method of advertising is.
The world we live in today has entered into the digital era. And the citizens of this digital world are immersed in media and information. The corporate world knows this thing and started to use electronic media to promote their products. Promotion is the best way of marketing and every company wants to reach as many people as possible. The advertising firms are finding new techniques to help various businesses to grow. Comparative advertisement is one of the latest techniques to grab attention of the consumers. Comparative advertising or otherwise known as advertising war is process where a particular company compares his product with a competitor for showing why its product is superior. Comparative advertisement sometimes helps consumers to choose the better product but sometimes it could mislead the consumers and create confusion.
It is a matter of concern for the competitors whose products are compared since it affects their goodwill and reputation. Comparative Advertising in Bangladesh has been going on for quite some time now. While in other countries, comparative advertising is regulated by specific legislation, we do not have any such regulations. Now because of this confusion and quaere, it becomes essential to study the ins and outs of comparative advertisement. This paper will focus on how this new technique of advertising has influenced the consumers also competitors. It will also elaborate the effect of this kind of advertising which could lead to unfair trade practice.
2. Advertisement and Comparative Advertising
Advertisement could be defined as commercial or business promotion. The primary purpose of advertising is to persuade a consumer to buy a product. But advertising is not just about the commercial promotion of branded products, but can also encompass the idea of texts whose intention is to enhance the image of individual, group or organization.Therefore, it is a way of communication between the consumers and seller.
The effectiveness of advertisement cannot be ignored as a good marketing strategy can change fortune of a company. Now, comparative advertising is bit different from other kind of advertisements. Comparative advertising is a sales promotion device that compares the products or services of one undertaking with those of another or with those of other competitions. In the comparative advertising the advertisers try to show the amenities of the products or services as compared with competitor’s products or services. Comparative advertising is any form of advertising which, explicitly or implicitly identities a competitor or goods or services offered by a competitor.
Comparative advertising can be divided into two manners, positive and negative. Positive manners means when the advertisers gives a positive reference to another’s product and in that advertise the advertiser claim that his product is as good as the competitor’s product, but in the negative reference the advertiser claims that his product is better than the competitors.
Therefore, positive or negative manner is not really important because in the positive reference there is a possibility of misappropriation of another’s goodwill and in the negative manner the competitor product is criticized. Positive or negative, it doesn’t matter when this both forms use the unauthorized reference of competitor’s product or service and this is undoubtedly related to unfair competition. In many situations, comparative advertising can misguide the consumers and create negative impression on a particular product. Consumers can also be confused by this kind of advertising. Therefore the perceptions of the consumers can be changed through this comparative advertising and may lead to the unfair competition. As motioned earlier that, whatever the manner of the comparative advertising, it could be create an unfair competition and that’s why a statute is very important to clear with this.
3. Comparative Advertising in Bangladesh
Consumers and business institutions in Bangladesh also depend on advertisements to keep connection between them and the consumers. Bangladesh has seen rapid growth in terms of business and industrial developments. With this growth the market place has also become very competitive. Thus many corporations are looking to ad agencies for help for making their product stand out from the rest. In a growing trend many ad agencies are coming up with comparative ads and using advertisement statements or contents or symbols of other companies in ad for some other. Unlike other countries, we do not have a regulatory system in place for comparative advertising in Bangladesh. The Competition Act of 2012 is the only legislation which gives some kind of safeguard for business for any unfair trade practice but that is only applicable in a limited space. Comparative Advertising in Bangladesh is not the most popular form of ad but their demand is growing with various corporations.
Case study 1:
‘Teer’ and ‘Rupchanda’ these two brands are famous for their mustard oil and in their advertisement they used a statement that ‘Pure Ghani Vanga mustard oil’. That term ‘Ghani Vanga’ means they are using traditional cow-drawn oil grinder to make their product. But another famous mustard oil brand ‘Radhuni’ claim that, there is no cow-drawn oil grinder mil that can create this huge amount of oil for a company. In the advertisement they showed it in a sarcastic way and mock the other product who claimed that they are making their product from cow-drawn oil grinder.
Case study 2:
There is another advertisement in recent past which is made by airtel bd and in that advertisement they are mocking their competitors Grameenphone and Banglalink by calling them uncle’s network and also used the brand color of Grameenphone and Banglalink in the advertisement. Now it is totally clear to the consumers that they are talking about Grameenphone and Banglalink and also mocked them by calling ‘uncle’s network’.
Now, the examples given above are simply negative reference of competitor’s product and the competitor’s product has been criticized. In Bangladesh the practice of legal action against comparative advertising haven’t starts yet. It goes without saying that, comparative advertising has to respect the restrictions applicable to all advertisements. Comparison based on false or misleading statements about one’s own product or involving false statements about the competitor’s product is forbidden in all countries.
As mentioned earlier the examples of comparative advertising is not only criticized the other’s product but also it is violating the General Restriction of comparative advertising. Both advertisements were ‘Misleading’ and ‘Discrediting’ comparison. Not only this two advertisement but there are many more. The tradition of comparative advertising in Bangladesh has been started and because of this experience the advertising firm could encouraged or influenced to create this type of advertisement. There is some negative effect of this comparative advertising. A first potentially negative effect mentioned in the marketing literature is the misidentification of sponsoring brands: comparison ads might increase the salience of the competing brand without improving consumer awareness of the brand sponsoring the massage, second important possible negative effect concerns credibility: an ad for one brand might not be viewed by consumers as a highly credible source of information about competing brands because of a likelihood of manipulative intent. Therefore, the effectiveness of this comparative advertisement is very significant and a specific law or statute needed in Bangladesh to deal with it.
4. International Aspects of Comparative Advertising
Internationally this comparative advertisement is a recognized issue and lawmakers always tried to control this process to avoid the unfair competition. Some countries consider statements claiming superiority or uniqueness (Like ‘the best’, etc) misleading unless they can be proved correct, while others consider them harmless exaggerations. Many business institutions also tag their comparative advertising as harmless exaggeration but sometimes harmless exaggeration could mislead and confused the consumers. In countries with a rather permissive attitude towards true but nevertheless disparaging statement, comparative advertising is generally tolerated.
In United States, the comparative advertising regulated and controlled by different laws and this protected ensured by combination of federal, state law, local laws as well as, self-regulatory codes of conduct. These include: The Federal Trade Commission Act (FTC Act) and Section 43(a) of the Lanham Act. The FTC is the primary federal agency responsible for regulating public advertisements. It regulates advertising by: Prescribing rules under the FTC Act, Investigating suspected violations of the FTC Act, Bringing lawsuits against companies conducting illegal activity. The arrangement of comparative advertising claims by the Federal Trade Commission (FTC) and the National Advertising Division (NAD) of the Council of Better Business Bureaus (CBBB).
The primary objective of the FTC is to shield consumers from deceptive or unfair market practices and promote healthy competition between competitors. It recognizes that the law of advertising allows for subjective statement of opinion, with the assumption being that ordinary consumers do not take such statements seriously. However, FTC offers no significant relief to a competitor who’s reputation might have been hampered due to comparative advertising. The FTC encourages comparative advertising provided that it is truthful and substantiated to the same extent as any other advertising.
In Europe, there is a different approach to deal and regulates the comparative advertising. Until very recently comparative advertising was essentially not allowed in European countries and in countries where it was not explicitly banned, comparative advertising had never been very popular and frequently was regarded by courts with open suspicion, as a sort of unfair trade practice.
0n 16 September 1998, the European council adopted the Directive on Comparative Advertising, effective May 2000. Prior to the adaption of Directive, most European countries effectively prohibited or severely restricted comparative advertising on the grounds that it constitutes unfair competition, and accordingly, the adoption of the Directive on Comparative Advertising constitutes a significant barrier to trade within Europe.
The laws or directives are liberal but still have some restriction over this matter. The proposed directive permits comparative advertising provided that it objectively compares the “material, relevant and verifiable” features of the goods or services being advertised and such comparison must not mislead the public or denigrate the competitor.
5. Concluding Remarks
From the above discussion it is clear that, there are some special dangers of comparative advertising that cannot be ignored. It cannot be denied that comparative advertising can more easily be misleading or disparaging that most other forms of advertising, for example if the comparison is based on irrelevant (or not really comparable) aspects, or if the overall impression is misleading.
If we consider the international aspects of the regulation over the comparative advertisement then most European countries have traditionally taken a restrictive stance against comparative advertising (subject, as explained above, to recent relaxation pursuant to an EU Directive), the United States regulators have a long-standing policy in favor of comparative advertising.
However, the situation is that, in the US and Europe there is some established law which is created to regulate the comparative advertising. Dedicated and specific law is very much needed as we are living in the era of advertising. As for comparative advertising in Bangladesh, there exists limited protection in the Competition Act but this literary not enough for this type of vast matter.
Legislation is important but establishment of self-regulation is also very important to maintain the credibility and morality of the advertisement. The advertising firm and business firm needs to create advertisement which help them to gain the value of morality and credibility besides the profit, the consumers and marketers need to create an ethical bonding. Advertising agency and other companies should reform their advertisement by giving true information of their product and also not try to use competitor’s information to mislead the consumers.
The government needs to analyze the legislation and statue of the foreign state and create a strong law for comparative advertising. Because of the absence of legislation the aggrieved party could not get the remedy which is important for rule of law. Therefore a viable solution is to develop a comprehensive and detailed system for regulation of comparative advertisement which would enable to adopt the model as has been evolved in Britain with the norms which may be prescribed by the advertising body whose directives are legally enforceable.
Comparative advertising is used mainly to disparage the competitor’s products sometime directly and sometime indirectly. Now it has become a question of ethics whether comparative advertising is ethical or not. The ethical and truthful advertising is the key to ensure relationship and sustainable marketing.
In the past the
European and American approaches to this type of advertising were markedly
different, today competition authorities agree in considering competition, such
that firms and retailers are encouraged to use comparative ads.
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Fahad Bin Siddique
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- Comparative Advertising in Bangladesh and Global Perspective - September 20, 2018