Sorry, I have been a very bad blogger...I think I was Chacoed (can that be a new Lincoln word?). I am still trying to dig out from the time in Chaco and the Chaco induced fatigue...I think I will be okay by next week, but its still not a great excuse for not blogging when we have been talking about one of my favorite subjects in economics...elasticity! Elasticity just flips the demand concept on its head! So many of the things we do as consumers don't really make sense....A Marc Jacobs purse anyone? (Hey...but at least it is leather).
Advertising is such a powerful tool for business to create elasticity for their product and thus increase their profits. The more inelastic your good can become, the more you can charge and not diminish your profits because the more inelastic your product is...the less a change in price will affect quantity demand.
The following commercial known as The Rant was an extremely successful marketing campaign for Molson Breweries, a Canadian owned and operated firm. The company saw their market share increase by 3% while their closest rival Labatt's decreased by 3%. After this campaign, Molson emerged as the largest brewer in Canada.
http://www.youtube.com/watch?v=Du-3DZILy2M
Why do you think this campaign was so successful? Can you link to your post another commercial you think might have made and impact on the elasticity of a product? Remember, keep it clean people!
Advertising is such a powerful tool for business to create elasticity for their product and thus increase their profits. The more inelastic your good can become, the more you can charge and not diminish your profits because the more inelastic your product is...the less a change in price will affect quantity demand.
The following commercial known as The Rant was an extremely successful marketing campaign for Molson Breweries, a Canadian owned and operated firm. The company saw their market share increase by 3% while their closest rival Labatt's decreased by 3%. After this campaign, Molson emerged as the largest brewer in Canada.
http://www.youtube.com/watch?v=Du-3DZILy2M
Why do you think this campaign was so successful? Can you link to your post another commercial you think might have made and impact on the elasticity of a product? Remember, keep it clean people!
11 comments:
That is such a great add, and I can see how their market share increased after it was launched.
Two brands that I think always have great ads are Pepsi and Nike.
Pepsi ad from the World Cup: http://www.youtube.com/watch?v=tbBgNrgsM_k
Nike ad for basketball freestyle: http://www.youtube.com/watch?v=0kSmis2g3SI&mode=related&search=
The Molson beer advertisement encouraged Canadians to buy more Molson beer instead of other beers because the ad was patriotic. The ad increased the demand for Molson beer which is why their market share increased. Successful marketing can be used as an example for companies. Apple is another great example, because I think their advertising paid off which is why iPods have been much more successful than other mp3 players by sony or toshiba, etc.
People who work in advertising use psychology to triger consumers based on their tastes and different age groups. Molson was successful because of all the Canadians I know, all are very patriotic thus this ad will lead them to buy a Canadian beer over an American beer, or German beer, for example...
LoL that's such a cool ad...The sound effect is really good.Well like emilie said, this ad touches on patrotism and obviously Canadians would choose Canadian beer over others. I would do the same if Malaysia had come out with such an ad.=)
LoL i found a nice anti smoking commercial...i'm not sure if it worked well in discouraging ppl to smoke,but i find this ad realy cool=)
http://www.youtube.com/watch?v=JndtG8Y7yfw
I strongly agree with Emilie when she says that people who work in advertising use psychology to trigger consumers based on their tastes and different age groups. That's why advertisers try to make their commercials different, more impacting, and lingering to the mind. I've already seen this commercial before and i thoguht it was GREAT so i can imagine what a huge impact it had on Canadians! Handling patriotism is a great way to connect with consumers. It makes the product more inelastic...because who would reject patriotism????
theres a brand of milk in korea called "seoul milk"..rellee famous milkk hahaa. and its advertisements kind of do what Molson beer does..they show famouus korean celebrities who do a lot of activities abroad, and missing korea etc etc..what makes them smile is drinking "seoul milk" cuz it feels like "real" milk..hahaha
u guys can watch it but i dont think ull understand wat shes saying..her name is boa, most of her activities are done in japan, and shes basically talking about how much she misses seoul.
http://www.youtube.com/watch?v=oApGDOSLneQ
How a product is advertised has a huge impact on its demand, especially if it's incorporating patriotic or popular images.
By branding and advertising, a product becomes much more inelastic and it's price can really change without great effect on its demand. All you have to do is look at great brands such as Coca Cola, Louis Vuitton, etc to see how that works.
Somethign that really affected elasticity of demand in many products in Germany was the World Cup in 2006. So many products and companies made commercials using the national team or the world cup that they became much mroe popular. Hundreds of beer ads concerning the world cup appeared, as well as those of visa, mastercard, or coca cola, who were official sponsors. A big commercial in Germany that affected the products elasticity is that of Nutella. they did a variety of spots using famous german soccer players, and they're still doing that right now, and they're doing very well. One of the spots is:
http://www.youtube.com/watch?v=m0TEgz2c7GU
By using famous and very popular soccer players from germany, nutella manages to attract an adience and create interest for the product. plus, nutella is already hugely popular in germany.
A good ad can stick with you for a long time-- For example, I was thinking about this great Superbowl ad and thought that is was for FedEx. I was right, even though I've only seen it once, and probably 4 years ago. http://www.youtube.com/watch?v=NMvB7jTG6oQ
The point is, effective ads grab your attention and entertain you, and then the logo at the ends helps you associate it with the brand. This helps strengthen branding, and promotes inelasticity. Louis Vuitton, Gucci, and less expensive stores like The Gap, Levis and even Target have strong brand names that help create a strong, unique image.
Advertisement is definitely one of the best strategies to increase demand for products, that's why making a 30 second ad on TV can cost so much money, and hiring famous people to show up in them as well. As people have said cool ads equals lower elasticity for the product and more profits for the producer. I think this Canadian Beer ad is great, and funny but the main reason I see why so many producers invest so much money in making good advertisements is because their product is not that appealing in the first place, so their only shot at selling the product without lowering it's price is to get people to think through advertising that their product is special and you just have to have one.
A good example of a product which is completely based on advertisement is Axe. Axe makes really cool ads for their deodorants and sprays but their product is really not that great, without their advertisement who would buy Axe? But with a funny ad like this http://www.youtube.com/watch?v=W9V80lSV_eg you might change your mind
I think that the most effective ads are those that manage to create a conection between it and the consumer. When a the viewer relates to what is being said or what's happening in the advertisement then the more desire he will have for that product.
An ad by a sports magazine of Argentina:
http://www.youtube.com/watch?v=uoUzPx9d4Gk
That add was good. All good commercials increase demand for a product. axe does a good job at this whith their controversial commercials and popular slogans like * warning: axe may include side effects of excessive attention from women*and pepsi, when they contract famous sports celebritys to be in their commercials. also when their a big events such as the superbowl it cost millions of dollars to air just 30 seconds of your comercial because companies know almost the entire country will be watching that game. it is important if your spending so much money on a commercial the people who view it will remember it and that it will catch their attention adn increase their interest in a certain product.
(P.S. Canada surpassed the U.S. dollar.)
ye i remember you showed us this ad last yr. I must agree with basically all of the people that had blogged que its a very successful ad. Like eze said, this ad is very successful since it creates a relationship between the consumer and the producct. The patriotism in this comercial is what brings such a consumer-product relationship close together. Canadians feel that this beer is representing them in the world, and they feel identified with the examples given in the ad. Its incredible how using nationalism it stimulates people from teh country to buy the product. I myself, like Jamie said, would also fall for a product that has an ad with a very nationalistic point of view.
i forgot to put down an example of this, but a clear one would be one for the 2002 world cup for teh argentine team. It tells teh story of argentine futbol in the world cups. i think it appeals to veyr nationalistic images.
http://www.youtube.com/watch?v=82nR5p-XDs8&mode=related&search=
This worked well because they connected their beer with canada and then inspired patriotism and encoraged people to drink their beer because its the patriotic thing to do. So the succesfully made their product more inelastic than the competition because canadians would prefer it.
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