Larger companies often end up charging higher prices and achieve a more dominant position in the market than smaller firms that cannot compete against them and their large advertising budgets. When this occurs, advertising:

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When larger companies charge higher prices and dominate the market, smaller firms cannot compete with them. At this point, advertising becomes a substitute for competition based on price. Smaller companies can use advertising to differentiate their products and create a unique brand image that stands out from the dominant brand, and thus attract customers who value these differences rather than just the price. As a result, although the dominant firm may continue to charge higher prices and make a profit from it, consumers still have the option to choose from other brands that have established their own identity through advertising.

Larger Companies Often End Up Charging Higher Prices and Achieve