Modern marketing is accused of pushing up prices to finance heavy advertising and sales promotion. For example, a few dozen tablets of a heavily promoted brand of pain reliever sell for the same price as 100 tablets of less promoted brands. Differentiated products - cosmetics, detergents, toiletries - include promotion and packaging costs that can amount to 40 percent or more of the manufacturer's price to the retailer. Critics charge that much of the packaging and promotion adds only psychological value to the product rather than functional value.
Marketers respond that advertising does add to product costs. But it also adds value by informing potential buyers of the availability and merits of a brand. Brand name products may cost more but branding gives buyers assurances of consistent quality. Moreover, consumers can usually buy functional versions of products at lower prices. However, they want and are willing to pay more for products that also provide psychological benefits - that make them feel wealthy, attractive or special. Also, heavy advertising and promotion may be necessary for a firm to match competitors' efforts - the business would lose 'share of the mind' if it did not match competitive spending. At the same time, companies are cost-conscious about promotion and try to spend their money wisely.