I hope you are finding these blogs useful. If not, try making notes in them while reading the chapter — noting things to think about and possible applications of the content.
- Muse a little about the role of advertising in industries classified as monopolistic competition or even oligopoly. Can advertising make markets either more or less competitive? How?
- What was the most interesting thing you learned in this chapter? Why was it interesting to you?
Advertising can produce a false demand. Advertising makes markets less competitive especially when products in a market are backed by a large firm with lots of money to spend on advertising. The role of a name brand is debated, but they are held to a high standard since patrons of name brands expect a certain level of quality. Imagine the role of a new startup trying to enter into a market. If their competitors are spending a lot of money on advertising they may not have the resources to compete. The product could be better, but will customers choose them over the other well established brands?
The main thing I liked to hear from this chapter was that we don’t need to be ashamed to purchase generic cheaper brands. The quality may be similar to the more expensive name brand, but the price just might be more competitive. Often I feel like choosing the similar generic brand makes me a little embarrassed, but it is really the same product. Just with less advertising.
Dude.World 