Final answer:
Brand and advertising are distinct concepts; brand is the company's identity, whereas advertising is a tool used to promote the brand and its offerings. Advertising contributes to brand awareness and differentiation in monopolistic competition, which can lead to increased profits and potentially dissuade new competition.
Step-by-step explanation:
Brand and advertising are distinct concepts in the field of marketing and business, therefore the correct answer to the question is 'No, they are not synonyms'. A brand is a company's identity in the market, which includes its name, logo, and reputation that stands for the values, traits, and characteristics of the company. Advertising, on the other hand, is a marketing tool used to promote this identity and the products or services the brand offers. It is about communicating with potential customers to influence their purchase decisions.
For example, when a company like Miller beer engages in advertising activities, they may use various media to project a consistent message, such as billboards, commercials, and in-game promotions to create brand recognition and prompt sales at events like sporting events. These practices demonstrate how advertising contributes to brand awareness but they are not the same thing; rather, advertising is a means to build and promote the brand.
Furthermore, in monopolistic competition, advertising serves to differentiate products from competitors, potentially making demand more inelastic or increasing it, which can lead to greater profits. A well-established brand name can serve as a competitive advantage, as it may dissuade other firms from entering the market due to the required large advertising spend for competing against dominant brands like Coca-Cola and Pepsi Cola.