Final answer:
RC Cola relies on advertising to create brand awareness and compete with larger competitors, not because of a lack of quality or a legal requirement. Advertising helps to differentiate their product in a competitive market and is vital for overcoming barriers to entry against established brands like Coca-Cola and Pepsi.
Step-by-step explanation:
The question pertains to why RC Cola relies on advertising to increase its market share. The most accurate reason RC Cola depends on advertising is to create brand awareness and compete with larger competitors, such as Coca-Cola and Pepsi. These large competitors have substantial advertising budgets that not only establish but also maintain their dominant positions within the market. For RC Cola, a firm with a smaller market share, advertising is critical to inform potential customers about their product, differentiate it from those of their rivals, and attempt to sway consumer loyalty in their favor. Without significant advertising efforts, it would be particularly challenging for RC Cola to expand its reach and grow its consumer base in the face of such formidable competition.
Advertising is not just about informing the consumer but also plays a strategic role in market dynamics, including serving as a barrier to entry for potential newcomers. Large advertising expenditures by dominant firms can discourage new competitors due to the high costs associated with launching a successful campaign that can compare to those of well-established brands. Hence, RC Cola's dependence on advertising isn't a reflection of lack of quality or taste; nor is it due to a legal requirement or a preference for word-of-mouth marketing—it is a necessary tactic to compete in a market characterized by monopolistic competition and to overcome the barriers to entry posed by established companies with strong brand recognition.