DISCUSSION Forum

This week we shall look at Monopolistic Competition. This is where you, as a consumer, spend most of your time. In Monopolistic Competition, there are many companies selling similar but not identical products. Put differently, the goods are close, but not perfect substitutes.

Because of the relative ease of substitution, companies often compete by advertising, services (for stores), brand names, brand loyalty and product differentiation more than by price. Thus, prices of competing products tend to be close, but not identical as they are in Perfect Competition.

Since this market is where you - as a consumer - spend most of your time and a lot of your money, this week you are going to look at this market in action in your daily life. When you go shopping this week, pay close attention to product prices and what information they tell you about how the products compete.

A grocery store is a good example. Look at the soda aisle and by viewing the prices and the product locations on the shelves, which products are close substitutes, sufficiently differentiated that they have brand loyalty (i.e., a higher price), etc. Do the same with canned vegetables. Or undertake the same observational experiment in another type of store you regularly frequent.

Assignment Summary:

1) Watch the video above and under the YouTube videos for this week, watch videos 7, 3 and 6 - and then the rest for more information.

2) Then go to a store, as discussed above, and observe. Observation is a well-established method of real world research. It will probably be easier and perhaps more informative if you pick on one product line to observe and observe by brand name. In particular, look for:

a) product prices,
b) product packaging (design, colors, logos, etc.); and,
c) product shelve placement relative to other similar products.

3) Based on what you observe can you identify:

a) which products/brand names compete most closely with each other? Are they placed close to each other on the shelves or far apart?
b) which products/brand names are aimed at cost conscious consumers? Where are these on the store shelves for grocery stores?
c) which are aimed at higher end consumers? Where are these on the store shelves for grocery stores?
d) which products/brand names have a narrower market and command brand loyalty? This one could be tricky to figure out.

4) Share what you find with the class on the discussion board.
What do you think you have learned from this activity?
What have you learned about monopolistic competition?

5) Post your views to the discussion board and refer to at least two different concepts from this week's Chapters. Your illustration of concepts MUST include an explanation why you think they are relevant to the week's topic using specific information from the articles, videos and other research that you have done.

MAKE SURE THAT YOU ADD SOMETHING NEW to the discussion.

6) Post on three different days for a minimum of three posts. Failure to meet these minimum posting requirements results in point loss.

• Include a word count on each post. All of your posts should sum to a minimum of 500 words.
• Each post submitted should be between 150 and 250 words. Keep them short, specific, and clear.
• Use paragraphs as appropriate.
• Very lengthy posts do not provide an incentive to be read. Remember to document all use of sources by using citations and references.

These should be in APA format.

• Please review Plagiarism Powerpoints PLAGIARISM.ppt,and be sure to provide references and citations, including clickable URLs where appropriate, to all works that you cite APA.pptx.

Now click on the Discussion Forum text at the top of the page to be taken to the discussion board. You can start a new thread by clicking on the Create Thread button at the top. You can also respond to an existing post by clicking the Respond button at the bottom of the post.

Crystal Dela Cruz

Discussion

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Good afternoon Professor,

What I have learned this week about monopolistic competition is that it actually exists. I did not believe that people would be involved in this, but they are involved in it. I always thought that stores cam up with their own brand only because it cheaper and it is not made the same way. When I went into the Publix this week I always love going to the deli section because I love deli meat and so does my husband. When I went in to do this assignment my mind was blown. I always get hard salami (the Publix/generic brand) because it is cheaper than the other named brand. I finally bought the other brand and tested the two to compare. I found that they named brand quality is slightly different in taste, but looks very similar to the generic brand.

When you walk up to the deli section, all the meat is displayed in a shelf on the ground so you have to look down to decide what you want. I found out that the named brand items are all at the middle and bottom shelves because that is what you see first when you look down. The more generic/store brand products are all on the top and it is a little hard to see. You have to step back or crouch down to see them.

What I am getting at here is that the store brand/generic brand and the named brand products has the same ingredients and almost the exact same taste but the named brand was 3 dollars more that the generic brand.

Thank you,

Crystal Dela Cruz

Word Count: 279

Juleisha Reyes Troncoso

Discussion

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A product that I use every day, at times even more, is coffee. I wanted to understand the monopolistic competition I face when grocery shopping. I chose to observe Starbuckscoffee with the product I choose called Café Bustello. The Starbucks coffee is about 12oz for 7.09 without tax. Café Bustello is about 10oz for 3.48 before tax. The designs are completely different Starbucks has a silver bean bag with green, while the Bustellopackage a is all yellow block with some red accents. The shelve placements on my favorite is always on the bottom shelf as for the Starbucks coffee it is eye level or higher. Based on my observation I can tell that products next to well-known brands are the store brands. Dunkin Donuts one of Starbucks competitors is placed far apart. The less expensive brands like Café Bustello are always closer to the bottom shelves. Overall,I've observed products of many businesses that are not identical, but different, even though they are close substitutes for one another.

Word Count:170