When examining the effect of open marketing on the profession of
accounting it is important to view it from three perspectives: the
client's, the profession's, and society's. Additionally, two key areas
that are affected by marketing must be addressed,
these are concerning competition, and ethical implications. Marketing in
public accounting is here to stay therefore making an argument against its
existence would be fruitless; however, in order to achieve maximum benefit
to the firm, the client, and s ociety more stringent guidelines must be
implemented at the firm level.
The first, and most obvious, of the effected areas is competition.
Within competition several points are discussed. First, the implications
advertising has on public accounting-- the model of perfect competition
versus the model of monopolistic compet ition. Secondly, the relationship
between firm size and advertising expenditures. Thirdly, the effect of
advertising on firm specialization, the implications of client turnover on
public accounting practice.
Before making the comparison, a brief explanation why the two
models are chosen is in order. Monopolistic competition has been chosen
for the pre-advertising era because it most closely resembles the market
structure in an extreme sense. The elements o f monopolistic competition
are as follows: product differentiation, the presence of large numbers of
sellers, and nonprice competition. Although accounting services between
firms offer very little service differentiation, the absence of
advertising serve s as a replacement because clients are not necessarily
aware that other options are easily attainable. The post-advertising era
is explained through the model of perfect competition for which the
qualifications are as follows: very little or no service d ifferentiation,
many sellers, and price as the only means of distinguishing one firms
service from anothers.
In a perfectly competitive market the price of a particular
service is established solely by the interaction...