Final answer:
The best example of a well-written ad objective is one that is clear, measurable, realistic, and time-bound. Aggressive advertising in a perfectly competitive market may increase sales in the short term but might not be sustainable long-term. Monopolistically competitive firms can also look beyond advertising to increase demand.
Step-by-step explanation:
An effective advertising objective should be clear, measurable, realistic, and time-bound. The given example 'we want to increase profits and that will require significantly expanding sales of our product' is vague in terms of how much increase is desired and by when this should be achieved. Instead, a better ad objective might be 'Increase product sales by 15% over the next quarter to contribute to an overall profit increase of 5%.' This objective is specific and includes a target and timeframe, making it easier to measure success.
When operating in a perfectly competitive market, aggressive advertising could indeed boost sales in the short run if it effectively communicates the advantages of a product. However, in perfectly competitive markets, products are often similar, and long-term differentiation through advertising may be difficult. Therefore, focusing on other factors such as cost leadership or improving product quality might be a more effective approach.
Outside of advertising, monopolistically competitive firms can increase demand for their products by differentiating their products, improving product quality, customer service, utilizing sales promotions, and building brand loyalty.