SCRIPT Opening and Introduction (Slides 1-3) Hello and welcome to our project on the topics of Monopoly, Monopolistic Competition and Oligopoly. Today, we will be covering the following topics: - Introduction Monopoly Monopolistic Competition Oligopoly Mini Quiz Conclusion Bibliography Introduction • As a group, we strongly believe that visual infographics coupled with verbal information are the most effective methods of learning. • Hence why we have chosen to do a presentation as part of our group project. • We will also have a slight twist or surprise towards the end of our presentation, which we hope you will engage with! Monopolistic Competition (Slides 13-23) What is a Monopolistic Market? Monopolistic Competition is a type of market structure in which many firms offer competing products and services which are similar, but not perfect, substitutes. This specific market structure is a form of imperfect competition. In Monopolistic Competition: No company enjoys a monopoly. Each company acts autonomously. Every firm disregards the impact of its own prices, on other companies. Characteristics of Monopolistic Competition There are many characteristics of Monopolistic Competition, however the three most significant characteristics are: Many Sellers, Product Differentiation and Free Entry/Exit. Many Sellers Since there are many producers and consumers in the market, no business has total control over the market prices. As a result, many firms are competing for the same group of customers. Product Differentiation Each firm produces a good that is at least slightly different from those of other firms. Similar products from competing companies are differentiated with unique marketing approaches, brand names and levels of quality. Free Entry and Exit Multiple businesses can enter the market and compete for a market share. Therefore, one company does not enjoy a monopoly. Hence why there aren’t many barriers to entry and exit. How do firms differentiate their products and services? Many firms differentiate their products and services by utilising various modes of Advertising and Branding. Advertising is a method of interaction with consumers of a good or service that aims to inform or persuade them. Branding encompasses the integration of features like a logo, design and mission statement. It aims to give customers a strong, favourable impression of a business, its goods or services. Advertising Each firm has an incentive to advertise when it sells differentiated products in order to draw more customers to that specific product. It is a tool that businesses use to inform (or misinform) consumers about the existence and features of their products. Moreover, advertising can entice consumers and foster brand loyalty by drawing them away from rivals. Branding While some businesses sell products with well-known brand names, others market generic alternatives or substitutes. The company with the well-known brand name typically invests more in advertising and charges a higher price for its goods. However, are brands a possible indicator of quality? Well, the short answer is: Not always. In general, brand names lead consumers to automatically assume that there are differences when they do not really exist. Examples Here we can see some examples of both Advertising and Branding Advertising As you may have observed, some of the most successful companies have changed their logo’s multiple times over the years. This is a marketing strategy that is aimed to entice and draw in potential consumers, as the new graphic of the logo tends to be more presentable and modernised. This makes people believe that the company is constantly making changes and improvements, given this illusion, consumers are drawn away from other rivals. Branding Here as you can see, we have three different types of coke. Although the taste and contents of the cans including ingredients are very similar, branding causes consumers to perceive differences between these drinks that do not really exist. In this case, the generic cola, that we can find in supermarkets created by unknown brands is almost indistinguishable from the brand name “Coca Cola’’ or ‘’Pepsi’’ drinks. Although there is a counter argument that these branded goods are of higher quality, we must note that branding does not always equate to high quality. This is primarily because: Branding is a means by which the firm creates an association in the consumer and because that association becomes familiar, the consumer is more likely to retain some loyalty to the firm and thus repeat purchase. Examples of Monopolistically Competitive Markets Some examples of monopolistically competitive markets include: - Computer Games, Restaurants, Books, Dentists, Opticians, Driving Schools and many more! Now, you might be wondering what do these all have in common? Well, they are all examples of many companies offering competing products or services that are similar, but not identical substitutes. Additionally, the barriers to entry in these industries are low, and the decisions of one of these firms do not directly affect their competitors or rivals. What Industry is an example of Monopolistic Competition? Mc Donald's and KFC are examples of establishments with monopolistic competition. Both are fast food companies that cater to the same market and provide comparable goods and services. These two businesses are actively in competition with one another and attempt to set themselves apart by offering various food and drink packages, differentiating their prices, and developing their brands. Advantages and Disadvantages of Monopolistic Competition Monopolistic competition has both benefits and drawbacks for businesses and consumers. Some of the positives include: - Few barriers to entry for new companies Consistent product quality for consumers Several choices for consumers Companies have decision making power for prices and marketing Whilst there are numerous advantages, there are also some drawbacks or disadvantages: - Access to economies of scale is limited due to numerous rivals - Inefficient company spending on marketing, packaging and advertising Consumers may be given inaccurate information or deceptive advertising Mini Quiz and Conclusion (Slides 39-42) Mini Quiz At this point, we would like to invite you, to test your knowledge on the topics of Monopoly, Monopolistic Competition and Oligopoly. This can be achieved by participating in the quiz that we created, which can be accessed at the following link: https://create.kahoot.it/share/monopoly-monopolistic-competition-and-oligopoly/83380b5b-ecba4255-82a9-0a8c9e6cdf7e Best of luck! Conclusion Conclusively, one can summarise that the three different market structures that we covered today are essential in the world of Economics. Without Monopoly, Monopolistic Competition and Oligopoly, the market would be a total massacre, that everyone would fear to enter. We hope that you enjoyed the presentation as much as we have enjoyed working together as a group! Lastly, we would like to thank you for listening and thank you for your attention! Bibliography/References Mankiw, N., & Taylor, M. (2020). Economics (5th ed.) Cengage Learning EMEA https://www.investopedia.com/terms/m/monopolisticmarket.asp https://www.masterclass.com/articles/monopolistic-competition-guide https://thebusinessprofessor.com/en_US/business-transactions/monopolistic-competitiondefinition https://kstatelibraries.pressbooks.pub/economicsoffoodandag/chapter/__unknown__-5/
