1. Product Differentiation and Advertising
Lesson 17
Section 68

2. How Firms Differentiate Their Products
Differentiation by Style or Type
McD’s vs BK
Crest vs Colgate
Differentiation By Location
As the Real Estate agent says, location, location, location.
Differentiation by Quality
Hershey's vs Sees Candies

3. Controversies About Product Differentiation
The Role of Advertising
Advertising is only worthwhile in industries in which there is some market power
Why does advertising work? Because people are irrational.
Celebrities
Story
Brand Names
Reputation
Well known
Has a stake in customer satisfaction
Unjustified market power
Charge more for brand name
Attachment

4. Subliminal Advertising
Advertising we do not consciously see, but unconsciously recognize.
Subliminal advertising modifies our behavior without our conscious knowledge.

5. Can you see it?