Micropolis Case Study

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Recommended: Market Structures(economics)

2. The best-suited market structure for the movie market in Micropolis is of an Oligopoly. Since there are only a few suppliers or theaters in the market it makes the market concentrated, making it suitable for an oligopoly. In addition to this, the barriers to entry of the movie market are high as well, the startup costs and the long hauling process of starting a movie theater helps limit the number of firms entering the market. These high barriers to entry also help the movie market to fit into the oligopoly market structure. However, the only limiting factor is the product itself. A movie theater’s product is a movies combined with the experience of watching a movie. Since the IMAX screens would provide a slightly more unique product, this …show more content…

The term product differentiation refers to the process of distinguishing a product or service from the competitor’s product, to make it more attractive to a particular target market. A firm uses marketing to differentiate its product, which refers to all necessary activities for a firm to sell a product to a consumer. A firm uses brand management to build a brand and unique identity of a product for the long run; this helps the firm to have an independent identity and to differentiate its products from the competitor’s product. So its uses brand management to maintain product differentiation over time. Firms use advertising as a tool to try to shift the demand curve to the right and make consumer demand for their product inelastic. This creates consumer loyalty of brand loyalty for the product. Since my movie theater doesn’t have IMAX screens, one way to advertise it could be by advertising it as affordable neighborhood theater. This way it would create brand recognition of a comfortable, homey and affordable theater for families and teens to be entertained on a budget. Product differentiation helps firms to create a unique identity of their product, which helps people become more attracted and loyal to the product even though substitutes are available, making the demand more

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