The Difference in Pepsi and Coke's Advertisements

As we continue to watch the marketing documentary in class, we have observed different marketing strategies throughout the decades. The documentary has shown a variety of strategies used in the past: focus groups, hiring correspondents who can find the so-called “trendsetters” in teen culture, and paid promotion. 

Back in 2017, Pepsi released a short film commercial featuring Kendall Jenner. A protest can be seen for the entire duration of the advertisement, with Kendall Jenner handing a Pepsi to a police officer at the end. Although Pepsi stated that the purpose of the commercial was to promote a “global message of unity, peace, and understanding”, it received large backlash on social media. People claimed that the commercial imitated protests in the Black Lives Matter movement and that Kendall Jenner’s exchange with the officer was a direct reference to Iesha Evans during a protest in Baton Rouge. 

Pepsi was accused of appropriating a racial protest movement to promote their brand, and people believe that the commercial dismisses the urgency of the issues and seriousness of the original protests.

On the other hand, Coca-Cola came out with a commercial back in 1971 that the public immediately accepted. The ad’s message was to see Coke as a small commonality between people and to bring people together. The company received more than 100,000 letters, listeners called radio stations to hear it, and a new pop version of the song was recorded. This commercial was regarded as one of the most iconic pieces of advertising of all time. 

A common marketing strategy is celebrity endorsement. The celebrity effect is where famous people are capable of influencing the public, and they “add credibility” to the product or brand they’re promoting. This strategy is highly effective that gains consumer interest and brand loyalty. However, despite featuring Kendall Jenner, people were still outraged and criticized Pepsi. Coca-Cola recruited strangers to sing in their campaign, and their commercial was a huge success.

link 1

link 2

Elasticity of Demand in Apple Product

Price elasticity of demand is defined as the responsiveness of the quantity demanded of a good or service to a change in its price. In relative elastic, modest price changes can cause very large changes in quantity purchased. In relative inelastic, substantial price changes cause only small changes in the amount purchased. In general marketing, producers consider lowering their product price to compete with other products. Have you ever wonder why Apple products are expensive, but the demands are still high? 

In analyzing price elasticity of demand in Apple products, there are three factors to be considered: the availability of substitutes, the amount of income available to spend on the phone, and time. 

A. The availability of substitutes

Apple has a unique operating system and a revolutionary stylish-looking in the century. No other products can be Apple's substitutes. Therefore, Apple can keep its uniqueness in the market. 

B. Amount of income available to spend on the phone

Apple producers frequently change their product prices based on the supply and demand curve. When the product first comes out, the price is very high because it attracts costumers as the first group to experience the refined new products. For those who cannot purchase the apple products in a short time, they can wait to buy until the price goes down. Producers calculate the demand curve and test out how much they should lower the price to get many sells. 

C.Time

To keep consumers in the long term, Apple producers learned to keep their customers feel "fresh" toward the products. By providing the refined products and care services, producers make people believe that Apple is worth to purchase. As a result, apple become a fashion, quality taste, and shopping behavior among customers. 

Furthermore, Apple Supply is never enough. 

Future Concern

However, in a recent study, researchers found that Android products could be a potential future substitute for apple products, showing the future possibility of declined demand in apple. When a brand of loyalty changes, consumers might shift their needs to purchase Android.

Resources:

https://thegadgetlover.com/apple-products-and-price-inelasticity-why-are-they-virtually-immune-to-price-changes/

https://www.economicshelp.org/blog/132985/business/are-android-and-iphone-close-substitutes/

https://www.ukessays.com/essays/economics/price-elasticity-of-demand-of-the-iphone-economics-essay.php

Cookies! Easier Marketing Research

Have you ever been on a website that has asked you to allow cookies and cache? You are not alone. Websites use cookies and/or cache to collect data in a much easier manner than focus groups or cool hunting. Luckily for companies and marketers, data collection has never been easier or cheaper.

Cookies are files that are created by the websites you visit and they are used to track your browsing data. When a website asks to use cookies, they are receiving your permission to collect your data for little to no cost at all. This way, websites can see what people search and what people tend to click on. This can create a website tailored just for the individual viewing it. Ads consisting of items you Googled last week, an ad from your favorite store and ads that promote certain news stories are all examples of ways sites can target your specific interest. 

However, since all of this data is gathered, it isn't just used to lure you to buy the things you like already and things you have searched, it is also being used to suggest things you might also like. By giving your device consent to use cookies, you are not only giving consent to track data and usage, but you are making your own internet experience a lot easier. Your computer stores certain information, for example, saving the things you have added to your shopping cart, saving it for you and reminding you to spend your money. In addition to saving it data for convenience, it is often sent back into your computer so it can create ads and eventually bring you back to the website to spend more money. 

Cache memory is a little different. A cache is used to improve efficiency. Cache data is used to recall websites and apps that are frequently visited. This gives devices the ability to not only track browsing, but to remember it. Frequently searched terms, phrases, or websites often pop up under the search bar as a form of convenience, and this data memory is useful to enhance an online expereince and also for companies 

Sources:

https://us.norton.com/internetsecurity-privacy-what-are-cookies.html
https://www.webopedia.com/TERM/C/cache.html

Inferior Goods aren't Actually Inferior (in Quality)

When we learned about normal and inferior goods in class, I was curious about why these goods were named in the way they were because it seemed to me that the names and definitions didn't seem to match up.

Normal goods are those for which consumption varies directly with income, such as food and clothing. Normal goods are also called necessary goods because they need to be bought for our survival. People who make more money buy proportionally more food and clothing. Everyone buys normal goods, thus they are 'normal' and always present in our lives.

Inferior goods are those for which consumption varies inversely with income, such as fast food and public transportation. Often these are thought of as inferior to their alternative counterparts, freshly cooked food and personal transportation. However, this is not where the name comes from. Other (more common) examples of normal goods include generic brands of food. When income increases, people tend to consume their brand name counterparts, which are not necessarily higher in quality. Inferior goods refer to the price (being lower) rather than the quality.

There are also luxury goods, for which consumption increases at a greater rate than income. Luxury goods include fancy cars, chandeliers, and the things most poor people dream of having. I think the naming of this is pretty self-explanatory.

Sources:
https://www.investopedia.com/terms/n/normal-good.asp
https://www.investopedia.com/terms/i/inferior-good.asp

The Great Twinkie Scare

Twinkies are an iconic American pastry. They have been lining the shelves of gas station convenience stores in the middle of nowhere since the year 1930. But it hasn't been all smooth sailing for Hostess, the company that makes Twinkies and other pastries such as the Ho-Ho and the Snowball.

The company first faced bankruptcy in 2009. It was saved by a company called Ripplewood Holdings and spared a shutdown, but the bankruptcy revealed many flaws in the monolithic company. Cheap, low-quality pastries have been taking a hit for the past 20-something years as a result of a push for better health consciousness from consumers. Some junk food companies were able to market to this change by creating products like Diet Coke. However, Hostess's meager attempts to market their products to a newer market failed miserably. Their "healthier," bite-sized, 100 calorie mini-twinkies tanked, and the company was unable to make any positive changes to their business model. Additionally, Hostess refused to invest in newer, more efficient machinery and struggled with two conflicting, powerful unions.

Though it survived in 2009, Hostess faced another collapse looming in 2012. But this one looked serious. In January, the company filed for bankruptcy, and many expected Hostess to shut down permanently. This is where the economics of Twinkies gets very interesting though. Twinkies have long been a beloved food, with many people extremely loyal to the brand. As such, there was a continuing demand for the snack food. However, the supply of Twinkies appeared to be dropping to nearly zero. What happens when there is high demand and low supply? Prices skyrocket. And that's exactly what happened for the Twinkie as 2012 progressed. Entrepreneurial pastry aficionados flocked the shelves and bought up all of the Twinkies they could find, only to immediately turn around and offer them for sale online. As people's desperation to get their hands on potentially the last Twinkie they would ever get to savor got worse, prices for sales of unopened Twinkie boxes on eBay climbed. One half-eaten box of Twinkies was listed at a starting bid of 595$, and a pristine box, at the height of the craze, was offered for 10,000$. (To be clear, I can't tell if anyone actually bought any of these since the offer pages have long since been delisted on eBay.)

The craze eventually died down as Hostess was bailed out again, and resumed selling their products. Even so, the Great Twinkie Scare of 2012 was a perfect representation of the market forces behind our price system.

Sources:
https://www.forbes.com/sites/susanadams/2012/11/21/why-hostess-had-to-die/#608848c36dfe
https://www.theatlantic.com/technology/archive/2012/11/on-ebay-the-starting-bid-for-a-single-twinkie-is-now-5-000/265346/
https://www.nydailynews.com/news/national/price-twinkies-skyrocket-online-article-1.1203799

How did Starbucks get to the top and stay on the top?

The other day I was thinking about why I had never seen a commercial for Starbucks on television or even a YouTube ad for their products. I’ve seen commericals for Dunkin’ Donuts and Tim Hortons as well as other fast food places so what excluded Starbucks from this form of advertisement? This brought me to wonder how did Starbucks make themselves so popular and continue to stay popular even through the years of changes in trends. 

I also found that Starbucks spends substantially less on advertising than other companies. In 2005, Starbucks spent $87.7 million on billboards, online advertisements, and signs. In comparison, Coca-Cola spent $2.5 billion and Nike spent $1.7 billion. Instead of normal advertisements, Starbucks has events and parties. For example, a Miami Art Museum exhibit called “Big, Juicy Paintings” was partnered with Starbuck’s launch of their juice-based frappuccinos. Somehow Starbucks has managed to use the “old-school” way of advertising when mass media is the norm. 

The first reason I found is that Starbucks made the category for coffee consumption: a start to someone’s morning, a place for people to do work, a place to hold a meeting. It integrated the idea of having a cup of coffee with a friend or co-worker into the daily life of an American. A four-dollar cup of coffee seems like a reasonable price to everyone even though employees could get a free cup of coffee from their work lounge. Even in our lives as highschool students, most of us get coffee together and the commonplace we all go is Starbucks. Some other reasons I found was that Starbucks offers a more dark, bold roast compared to other coffee suppliers. The way of ordering a drink at Starbucks using the size “grande” gives a special touch compared to “medium”. 

These factors add up to the idea of perceived value. That four-dollar cup of coffee not only gives you the value of caffeine but also emotional and social value. Going to an event promoting a product gives someone an experience while indulging in the product, making them more inclined to buy it later on. Even though Starbucks may not have the best coffee, the value of the experience and brand encourages consumers to buy it and continuing buying.

Sources:

https://nakeddev.com/2019/02/06/why-starbucks-doesnt-do-commercials-part-1/

https://www.researchgate.net/profile/Arthur_Lok2/publication/306015250/figure/fig3/AS:393407571742721@1470807082169/Three-types-of-perceived-value.png 

https://www.seattletimes.com/business/starbucks-takes-unique-approach-to-marketing/

https://observer.com/2015/10/why-starbucks-chose-to-forego-traditional-advertising-for-so-long/

Does Going Vegan Make a Difference?

The way I thought about it while trying out vegetarianism was that if a large group of people stop buying animal products, then the demand will decrease and the producers will reduce it’s supply. Looking at a supply and demand graph, if the negative-slope demand shifts to the left, then the equilibrium point is at a smaller supply. However, some economists argue that profits determine supply, and demand is just a factor in supply. I wanted to look at data to see if there had been any difference in meat supply due to the increased amount of vegans and meat-free substitutes. 

Where we live, everyone probably knows or knows of at least one vegan. I’ve considered different diets after learning about animal cruelty and the effect the meat industry has on the enviornment, but have always been asked, or asked myself, if those dairy-free, meat-free, and animal product-free diets actually make a difference. 

Looking at evidence of the change in animal-product production, per capita meat may decrease from 2018 218.6 pounds to 2019 217.3 pounds. In 2004 it was 221.9 pounds. So, possibly due to the growth of vegans and veganism, the meat consumption has decreased. There are new imitation meat brands such as Impossible and Beyond that offer meat-free options, and are progressing to work on seafood as that’s very damaging to the environment. They could potentially affect the demand while looking at the price of related goods as a substitute, and they may have a correlation with the per capita decrease.

Researching about veganism theories, some vegans acknowledge that their efforts won’t change the animal product use of a generation of animals, but it will thousands of generations later. Looking at the evidence, however, the small changing demand of vegans, so far, is making a difference in supply. The theory of demand having some effect on supply should make sense, and there is evidence of progression. We also don’t have enough data yet to see if there can be generational change, but the increase of vegans and their decreased demand for animal products may already correlate with the consumption of meat, which has gone down. 

https://usda.library.cornell.edu/ 

https://postvegan.wordpress.com/2010/12/27/supply-and-demand/

The New Age of Marketing for Teens

After watching the “Marketing” documentary in class, I began to reflect on how we, as teens, are marketed towards today. With the new age of social media, countless companies are beginning to advertise through these platforms. 

Even just scrolling through my Instagram or going on Snapchat, I get so many ads that are definitely catered towards me, and actually catch my attention. Because I’m commonly on these platforms, I pay attention to these ads. They are also placed in my feed or between stories where they get noticed, which is different from when I’m on a website on my computer and my eye skips over the ads. I also find myself looking up something online, and then the same or similar products are directly advertised on my Instagram. I've had a few friends who purchased products directly from Instagram ads, especially because it's so fast and easy now to buy something. From the viewpoints of a company, this is really useful to target teens since these are platforms commonly used.

Another fairly new method of marketing, that can be compared to the “Cool Hunting” to find influential people to target teens is the use of social media "influencers.” These are people who have large audiences on media like Youtube or Instagram. In the past, Youtube has been a common application used by teens, as they watch a variety of Youtubers, specifically lifestyle Youtubers. With these figures, teens admire them as they tend to relate; and if someone you look up to or try to relate with is promoting something that benefits them, you may assume it will benefit you. Even in my experience, I have friends who have used promotion codes from these influencers. Similar to how the documentary talked about companies paying people to advertise to their peers, this concept involves someone influential promoting a company. With the new age of “influencers,” companies can greatly benefit from these figures, and it works with promotion codes, giveaways, and ads. 

Rent Control and Price Ceilings

         Over time, big cities have undergone a lot of change involving housing and rent. For example, the documentary we watched in class, San Francisco 2.0, illustrated how wealthy people are becoming increasingly wealthier, while smaller businesses are pushed out by the big tech companies. Because of this issue regarding rent, there has been much controversy over rental control laws.

Rent control is a law passed for the purpose of regulating increases in rent, such as in renting apartments. This means that essentially, rent control is a price ceiling. A price ceiling keeps a price from rising above a certain level (hence, the ceiling).

The controversy over rent control comes from the fact that tenants and other renters want an affordable place to live, but landlords and the housing market believe that rent control leads to dilapidated units, deferred maintenance, and an overall reduction of the rental housing stock. Therefore, whether or not price ceilings should be imposed remains questionable.

The graph to the right illustrates a price ceiling in rental control through supply and demand curves and how changes in demand (due to changes in the popularity of an area or changes in income due to business expansion) cause a shift in the equilibrium point. A rental control would supposedly keep the equilibrium point from shifting. The horizontal line at $500 represents the fixed maximum price (the price ceiling) set by the rental control law. At this price, the quantity demanded exceeds the quantity supplied, so there is a shortage of rental housing.

Do price ceilings and rental control laws really benefit renters? It seems that the issue needs a closer look at opportunity costs and that changes in demand manipulate the effectiveness of price ceilings.

Sources:
https://opentextbc.ca/principlesofeconomics/chapter/3-4-price-ceilings-and-price-floors/
https://www.governing.com/topics/urban/gov-landlords-rent-control-stanford.html

Stereotype Threat

 Stereotype threat is a situational predicament in which people are or feel themselves to be at risk of conforming to stereotypes about their social group. These stereotypes can take form in many ways such as gender and racial stereotypes. One study of stereotype threat showed that if before a math test students were informed that males usually perform better then the males would perform better. Not because males become better at math but because the females would conform to that negative stereotype. This is largely Neurological as the perceived threat stimulates cortisol production in the brain having the effect of reducing the available working memory for completing tasks. For Stereotype threat, they also found that the negative stereotype must be personal to a person and the action being disproved must be difficult. Unlike Self Fufillinf Prophicy where negative thoughts about oneself make those thoughts true. For stereotype threat, it is actually the action of trying to disprove a negative stereotype that is detrimental to performance.

 In class, we discussed how stereotype threat is in an example of how racial issues are psychologically holding minorities back. This is proven in another study that found if black students were asked to indicate their race before taking a test then they would perform worse. They found that the most achievement-oriented students were actually impacted the most. This is because they became self-conscious, and suffered from more test anxiety, due to the stereotype.

 Moving forward if we know that negative stereotypes may be constantly looming over minority students or disadvantaged groups what could be done to counteract them? Should race not to be a question on the SAT if it has negative impacts? or should those questions come after the test has been taken?

https://serc.carleton.edu/sage2yc/stereotype/stereotype.html
https://en.wikipedia.org/wiki/Stereotype_threat

Gentrification in the Bay Area

Gentrification is the process of improving and refining a district, thereby bringing change in character through the influx of more affluent residents and businesses. In this sense, gentrification symbolizes economic growth. Newly renovated areas attract wealthier individuals and businesses. Normally, these areas also undergo decreases in crime rates.

However, specifically in the Bay Area, this topic has become an important and controversial point of discussion in politics and urban planning. The argument is that gentrification benefits incoming residents at the expense of current, and normally lower-income, residents. Increases in rent costs push those with low, fixed incomes, out of their homes, forcing them to relocate. As newer residents take over the area, they push out existing cultures that have cemented themselves there over longer periods of time. These culture-clashes increase racial and class tensions, generating resentment and community conflict.

The Bay Area attributes its character with the large tech industries that are rooted in Silicon Valley and San Francisco. Unfortunately, this means that gentrification has been increasing at an alarming rate. Tech companies are in a sense taking over many neighborhoods across the Bay Area. This has resulted in a vast displacement of lower-income residents.

It just so happens that these lower-income residents tend to be of African-American or Hispanic descent. The Bay Area prides itself on its culturally and racially diverse environment, however, these displacements have slowly been unwinding the diverse microcosms of individual districts.

The question is whether or not we should be supporting the economic growth that comes from gentrification, despite it being at the expense of lower-income residents. From the economist's point of view, the answer is yes. But from the moral and ethical standpoint of a human being, many will argue otherwise.



https://www.mercurynews.com/2019/08/06/bay-area-gentrification-displacing-communities-of-color/

Why The War on Drugs Failed Part 1

In 1971, President Nixon declared a "war on drugs," a government initiative that aimed to reduce drug use in America.  Over the decades, it became apparent that many of the problems facing America today can be attributed to Nixon's brainchild, such as the world's largest incarceration rate due to non-violent drug law offenses, or the increasing prominence of Mexican cartels in the US.  This was the result of politicians failing to recognize the fundamental rules of supply and demand.

Supporters of the War on Drugs believe that drugs are regulated by elastic demand, or the belief that by increasing the price of drugs for consumers, there will be a proportional decrease in demand and consumption.  In order to increase the price, the government banned precursor chemicals in the US and increased the severity of prison sentences to decrease the supply, which in their mind would ramp up the price and make drugs an unappealing choice for consumers.  What politicians didn't realize is that drugs are regulated by inelastic demand, where increases in price have virtually no effect on demand and consumption.  Addicts don't care about the price of the drug; their addiction has altered their brains on a molecular level, and for them, drugs are more important for survival than food.  Increasing the cost through prison sentences for local producers or decreasing supply has no effect on the demand for drugs, and has only drawn in bigger players like the Mexican cartels to fill the vacant market.




















https://www.huffpost.com/entry/demand-powerlessness-and-the-war-on-drugs_b_59a6b596e4b084581a14997b
https://www.insightcrime.org/news/analysis/the-struggle-to-ban-precursor-chemicals/

Gentrification in Silicon Valley

 Gentrification is the process of renovating and improving a house or district so that it conforms to middle-class taste. This inherently requires the lower class to be forced out as they can not afford the "middle-class taste[s]." A striking example of this is occurring all over Silicon Valley.

In the documentary, San Fransisco 2.0 that we have been watching in class has discussed the changing of neighborhoods of San Fransisco do to the tech invasion. An ongoing study by UC Berkeley found that in 2015 alone 62% of low-income households across this thirteen-county region live in neighborhoods were at risk of or already experiencing displacement– totaling over 900,000 low-income households and nearly half of those households live in neighborhood were at risk.

A neighborhood that is often talked about is the Mission. Ethnic communities that have made up the culture of the Mission are being pushed out due to the rise of house and rent prices. Rents are being raised from an established price of 900$ a month for a one-bedroom to $1800-2300 a month. Additionally, other residents are receiving eviction notices. The large effect is the diminishing numbers of the Latino population. The strong culture of food music and language is becoming less prevalent. This is discussed in the documentary when they talk about murals being painted over. Which symbolizes the previous culture being glossed over and covered by the new population moving in.

Closer to home gentrification can be seen in the form of

 the San Antonio Village. What once was a collection of strip malls home to local business such as Milk Pail and Dittmers has turned into a Post Modernism multi-use mall and housing complex. While in this case, the local businesses were either able to move or sell out it is undebatable that more expensive businesses have moved in and housing prices have risen.

Should we view this as bad? Or is change inevitable so we should do nothing? If we should try to slow this process what measures should be put in place?

https://www.urbandisplacement.org/map/sf

https://www.smartcitiesdive.com/ex/sustainablecitiescollective/san-francisco-s-mission-district-controversial-gentrification/332586/

http://www.foundsf.org/index.php?title=Mission_Anti-Displacement_Coalition