NEED FEEDBACK ON DISCUSSION POST ANSWER, MORE LIKE A COMPARE AND CONTRAST.

QUESTION:

One thing that establishes a monopolistic competition market structure is firms who make similar, but not identical products through what is defined as differentiated products. Pick one way in which products can be differentiated. Identify a good purchased by a firm that experiences this method of differentiation from its competition. How does this method of differentiation increase or decrease $($or both within different populations$)$ the demand for your specific good?

MY ANSWER:

One method of differentiation is branding, which is a strong and powerful method of product differentiation, where a firm distinguishes their products from its competitors through a unique brand identity. This can include slogans, logos$,$ packaging, marketing campaigns, and brand reputation. One firm that would be an example of differentiation through branding is Coca$-$Cola, and their product, soft drink Coca$-$Cola.

Branding increases demand due to the loyalty among customers who prefer Coca$-$Cola over other coke products as well as with its strong brand identity. This can also make consumers less sensitive to any price changes and may not have any effect on product demand. Additionally, branding can also create a false perception of product quality, leading consumers to believe that the product is of higher quality or has a unique taste a competitor cannot replicate. When using branding effectively, it can also create an emotional connection with consumers, for example Coca$-$Cola uses unique and nostalgic advertisements during holidays, which can also increase demand. Additionally, Coca$-$Cola is one of the most recognized brands worldwide by creating a diverse presence on the markets, leading to increased demand internationally.

Branding can also decrease demand when branding is unable to overcome price increases in low$-$income populations, consumers may choose store brand cola due to their low income. With people trying to create a healthier lifestyle, strong branding may not work with healthy consumers, due to the high sugar content in their Coca$-$Cola. This can lead to decreasing product demand for healthier individuals.