Question

Elasticity

One of the main factors in elasticity is the number of substitutes available to a specific product.   If there are lots of substitutes available, then when a firm tries to raise it price, consumers feel like they can substitute to the relatively cheaper product. That's where firms might turn to advertising. If a firm can make you believe that their product is so uniquely special that an alternative just isn't possible, then they're able to make their demand more inelastic.

Find an advertisement for a product (and be sure to include it) that's trying to change it's elasticity.   Recall, it needs to do one of the following:

Try to make consumers believe that substitution isn't really an option

Try to make their product more of a necessity vs a luxury

Try to make time an issue such that you have to buy their product sooner than later.

Then explain how the ad is trying to achieve any of the goals above.

Answer 1

Let us take the example of KFC and Subway . These are two chain of retailers who sell fast food . Now when both the enterprises started in India , KFC gained much more popularity . This is because it not only changed its products as per Indian tastes and preferences but also named and advertised them in such a manner so as to pull the crowd . Advertising , wednesday discount offers , lucrative combinations of dishes has made KFC bucket an unique product in India . On the other hand , inspite of producing same kind of fast foods , subway could not gain such level of popularity . Subway has mostly stuck to its original varieties and did not invest in lucrative advertisements . Hence KFC has been successful in making consumers believe that their products are unique and specially designed for them .