1 / 5

AP Economics

AP Economics. Mr. Bernstein Module 68: Product Differentiation and Advertising December 12, 2013. AP Economics Mr. Bernstein. Product Differentiation Attempts by firm to convince consumers their product is different from competing products By making them different:

justus
Download Presentation

AP Economics

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. AP Economics Mr. Bernstein Module 68: Product Differentiation and Advertising December 12, 2013

  2. AP EconomicsMr. Bernstein Product Differentiation • Attempts by firm to convince consumers their product is different from competing products • By making them different: • 4-wheel drive vs. 2-wheel drive • Or just by convincing consumers they are different! • Either way, firms can charge a higher price if they can differentiate • Bleach is bleach

  3. AP EconomicsMr. Bernstein Types of Differentiation • Differentiation by Style • Deep-dish, regular or cheesy crust pizza • Consumers regard them as imperfect substitutes

  4. AP EconomicsMr. Bernstein Types of Differentiation • Differentiation by Location • Common in service industries such as groceries, gas • Differentiation by Quality • BMW vs. Hyundai; consumers often pay a higher price even if difference is only perceived

  5. AP EconomicsMr. Bernstein Is Product Differentiation Efficient? • Advertising can provide useful information and aid efficiency • It can also waste resources and/or be misleading, reducing efficiency

More Related