1- Marketing plays a huge role in the decisions consumers make. One large proble

Question

1-

Marketing plays a huge role in the decisions consumers make. One large problem marketing fills is awareness. If a consumer does not know of a product they are definitely not going to buy it. Especially in a monopolistic competitive industry, the companies have to develop an image for their product to create a distinction between their product and the other competitors. This image has to correspond with the values of the product's target market. In the example of soap, a body wash for men is not going to advertise the soaps ability to make their skin shine with added glitter. In general that is not a top value for men shoppers.

2-

Advertising plays a huge role in what consumers purchase. Most of the products they buy are the same minus the brand name. However, due to the image products create for themselves, it causes more people will feel that certain brands are better than the others. For example, cereals tend to serve the same purpose of providing someone with enough nutrients to achieve their daily tasks. However, Cheerios has created the image of being a “family cereal” that children will love but is healthy for them. Overall, they hold the same nutritional value, calories, taste as brands such as Honey Nut Scooters or even Joe’s O’s. However, due to the large amount of advertising Cheerios invests in, more people heard about the brand and believed the persona that Cheerios has put on. Advertising plays such a huge factor in the products we purchase because it taps in to what we want a product to do for us. Cheerios appeals to families with children who want to keep them happy and healthy. Advertising also spreads word about their product and what it offers. In doing so, companies can help appeal to a particular audience that will be interested in purchasing the items.

i need respond for these paragraphes please .

Explanation / Answer

(1)

A monopolistic competitive industry structure is characterized by existence of many buyers and sellers, but each seller has slightly differentiated product. The monopolistic competitive firms use advertising as their primary tool to differentiate their goods from their competitors' goods.

However, the example of soap versus body wash is not a best suited example of a monopolistic competition. In such a market, the goods are only slightly differentiated, for example, soaps can have different variants based on size, color, fragrance or purpose (fairness, antiseptic, natural etc). Even though soaps & body wash serve the same basic purpose of cleaning the body, the goods are different, so cannot be clubbed as differentiate versions of the same product.

Even then, another point to consider is advertising elasticity of demand. Advertising is beneficial for monopolistic competitive firms if and only if the advertising elasticity of demand is positive: As advertising expense increases (decreases), quantity demanded of the good increases (decreases) at least close-to-proportionately. Otherwise adevertising is considered a statistically insignifcant factor of demand.

In turn, advertising elasticity of demand depends on efficacy of the advertising program that targets the right customer segment, at the right price (which is no higher than the maximum price that the customers are willing to pay).

(2) This question (Cheerios) is a pure Marketing question having nothing to do with Economics. Please post in under "Operations Management" subject.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.