Final answer:
A company may hire an outside agency to gain a more objective view on advertising strategies, reduce costs, and distinguish their products more effectively in the marketplace. So, the correct answer is option C.
Step-by-step explanation:
A company that uses an in-house agency might turn its advertising and promotion tasks over to an outside agency to obtain greater objectivity. When companies embrace external agencies, they often tap into the agency's unbiased perspective and specialized expertise, which can imbue the advertising strategy with fresh, innovative ideas and approaches.
An external agency can also provide an external view on the brand's positioning and customer perception, which might not be as apparent to an in-house team closely tied to the company's internal culture and politics. Moreover, using an outside agency can also be a strategic move to reduce costs, not only in terms of potentially lowered operational expenses but also by leveraging the agency's economies of scale in media buying and creative production.
Lastly, an outside firm can help improve the company's advertising effectiveness by conceiving campaigns that make the firm's products stand out through differentiation in a competitive market, a concept central to monopolistic competition where advertising is crucial to shape consumer perception and demand.
So, the correct answer is option C.