BUEC342 Lecture Notes - Lecture 8: Theodore Levitt, Factor Endowment, Oil Refinery
11 Jan 2017
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May involve changes in how product is promoted: influence perceptions about product. Theodore levitt argued: markets are globalized, the worlds needs are homogenized, the end of local products, sell the same thing the same way everywhere. Uniform strategies are not used for all products. Firms change: product advertising, product characteristics. What gets changed depends on market demand. Standard product & advertising: coca cola, mcdonalds. Standard product adapted message: green giant corn: Adapted product standard message: pampers diapers. Adapted product & message: ford cars. Barbies: cost denoted by: wf x qf + (wf + th) x qh + kf, marginal costs of wf, trade costs of th, fixed costs of kf, preferred if: cf < ch & cf < cr. Assume there is demand for 1,000 bicycles in each market: assume that marginal costs are given by: wh = 250 & wf = 50, assume that transport costs are given by:
