1 / 17

Competition and Market Structures

Learn about perfect and imperfect competition, monopolistic competition, advertising strategies, branding effects, and different types of monopolies. Explore how firms use marketing techniques in various market structures.

erler
Download Presentation

Competition and Market Structures

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Competition and Market Structures Chapter 7 Section 1 Advertising and Branding lessons adapted from Tim Wharton

  2. Perfect Competition • Thus far we have been discussing markets where there is perfect competition. • There are many buyers and sellers. • No seller controls the market, keeping prices low.

  3. Imperfect Competition • While there are still some perfectly competitive industries, most markets in the US are imperfect. • Perhaps only a few sellers dominate the market (oligopoly) or only one seller controls an industry (monopoly)

  4. Monopolistic competition • The most common form of an imperfect market is called monopolistic competition (as distinct from monopoly). • In these markets there are many sellers where products are similar, but not identical.

  5. Product Differentiation • Under monopolistic competition, businesses spends huge amounts of money on advertising to convince consumers that their products are better than their competitors. • The differences may be real or just imagined.

  6. Advertising • Advertising is designed to persuade consumers to spend their money • It takes place on the web, TV, radio, print, billboards, product placement and celebrity endorsement

  7. Does advertising work?

  8. Why can you name these brands? • Companies usebranding with a name, logo, slogan, graphic, fonts, color, song, or any feature that identifies one seller’s good or service as distinct from other sellers • Advertising creates brand loyalty

  9. Does Branding Work? • How many of the following slogans can you identify with its product? • Taste the rainbow • I’m loving it • Have it your way • Snap, Crackle, Pop • They’re Grrrrreat! • Save Money. Live Better • What’s in your wallet? • Maybe she’s born with it • The Happiest Place on Earth

  10. Market Structures Graphic

  11. Oligopoly • Oligopoly is a market structure where a few very large sellers dominate an industry. • The soft drink and fast food industry is a market with an oligopoly.

  12. Monopoly • A monopoly is a market with only one seller in a market. • This gives a seller the ability to raise prices and control the quantity of a product.

  13. Types of monopoly • Natural monopoly is one in which the costs of production make it too expensive to have two firms. • The Pacific Gas an Electric company is a natural monopoly

  14. Geographic monopoly • This type of monopoly occurs when only one company operates in a certain location. • For example, if there was only one theater in a town with no competitors

  15. Technological Monopoly • This type of monopoly is the result of a technological or scientific method that only one company has. • For example, a drug company may have a patent on a medicine that it discovered.

  16. Government Monopoly • A government monopoly is a firm that only government owns and operates. • For example, many cities have a monopoly on water use.

  17. Regulation • Without competition the government has agencies to regulate monopolies. • This is designed to protect the consumer.

More Related