Monopolistic competition is the
closest to real life model of perfect competition market. It has a large number
of firms with easy entry and exit, abundance of information available, but the
products on the market are slightly different and the sellers can adjust the
prices little bit. That is when on the market comes advertisement and high competition.
It is the prime importance for the seller to
convince buyers that the product he is selling is better than similar product
of the competitor. And as we can see from the table below it depends of the
size of the company how that is accomplished. For the small company the service
and freshness of the food and beverages are the most important things. Medium and
fast-growing company is concentrated on exceptional signature beverages from
the best coffee beans and comparably low-cost Internet advertisement in afford
to keep the price higher and demand curve less elastic and shifted right. To
achieve economies of scale the company is selling franchises. And finally the
big famous company is using all possible advertisement to get profitable cafes
in every town like all places in the USA where Tim Horton played. It actually
creates a legend that is part of Canada’s recognition abroad. All possible
advertisement methods are used, economies in scale is achieved. The freshness
of goods and their taste is something that was given up. In fact, there are no
more locations where the doughnuts are prepared left. They are just reheated
from frozen state. Is it what the motto "Always Fresh" means? I don't know. But for the customers the brand is now more important.
Monopolistic Competitive Companies
|
Size:
|
Small Company
|
Medium Company
|
Large Company
|
|
Features:
|
Bumpy’s
Cafe
|
Waves Coffee
House
|
Tim Hortons
|
|
Differentiated
products
|
Homemade fresh
goods and drinks
|
Signature
Beverages, Fresh appetizers
|
Beverages
and Doughnuts, Breakfasts, Lunches
|
|
Control
over price
|
Little
|
Little
|
More control
as the costs are less because of economies of scale
|
|
Mass
advertising
|
Flyers, old
clients, Internet, Logo, Social Media
|
Internet, Banners,
Logo, Flyers, Social Media
|
TV,
Internet, Banners, Flyers, T-shirts, Tumblers, Cups, Sport Stars, Event Sponsorship
|
|
Brand name
goods
|
Logo
|
Logo,
Packaging, Franchise
|
Recognizable
packaging, Logo, Franchise, Part of Canadian culture
|
|
Icon
founder
|
N/A
|
N/A
|
Tim Horton
|
|
Atmosphere
|
Old happy times
|
Modern, Place to meet and relax
|
Yes as much
as possible for fast food chain
|
|
Service
|
The best
|
Good
|
Average
|
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