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.
For example, this ad below hints that a gun is
a necessity to protect a family. Further, it
hints that Beretta is superior to other guns because this one has
all the features desired, having no close substitutes.
It even includes a clock which makes you think
that time is an issue.
Smartphones market is growing with leaps and bounds. All the brands of smartphones are trying to increase their sales in the market by depicting a distinguishing feature of their smartphone in the advertisement. This distinguishes the product from other smartphones in the market. On of the smartphones brand- Oppo is doing the same. It has increased its sale in the market by showing in the ads a superior camera picture. The selfie pictures taken from oppo smart phones are superior as compared to other smartphones in the market. Since smartphone is more of a necessity now and not a luxury, thus, they are trying to make their product a necessity. Since it claims to provide the best picture quality, it induces the consumers to buy the product sooner.
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