Published by MBA Skool Team, Last Updated: May 07, 2015
What is Competitive Advertising?
Competitive advertising is the form of advertising in which a business or a company shows its superiority of its products over similar offerings from its competitors. It is also known as comparative advertising.
Competitive advertising is done to influence consumer’s choice and secure a larger market share. Competitive advertising can be done directly or indirectly. In indirect competitive advertising the company places the superiority of its product over its competitors’ without specifically naming their products or brands. In direct competitive advertising the commercials on different advertising mediums specifically mentions its competitor’s name and establishes its superiority over them. Companies that uses competitive advertising generally follows product based marketing and compares the nuances of its product in which it is superior to its competitors.
If companies uses competitive advertising back and forth to each other it results into an Ad-war. Sometimes competitive advertising can get out of control and can harm the companies in different ways. Sometimes because of over-aggressiveness competitive advertising can put companies out of business. Competitive advertising may also divert companies towards the battle rather than focusing on consumer needs and may end up talking to each other rather than addressing the consumer and this may affect companies severely. Consumers take in several factors like packaging, price and might not take the best product while making a purchase. Therefore, companies should account on several factors while allocating budget to competitive advertising.
1. Coke and Pepsi are famous for most heated rivalries in advertising and they are doing it from the last three decades. In a famous advertisement a kid first takes out Coca-Cola from a vending machine and then step over it to get a Pepsi thus indicating people prefer Pepsi over Coke.
2. In an advertisement, car rental company Hertz claimed that it is No. 1 and in response to that its competitor sent out the message to its consumers that since we are second, “we try harder”.
Hence, this concludes the definition of Competitive Advertising along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.