Market Evaluation Project
The purpose of this assignment is to use the market models we have been studying to assess the structure of a real world market-- how that structure may effect the outcomes of the market.
You will investigate and write a paper or do a class presentation that discusses the issues below for a product market.
You may work with a partner on either project, but you must state clearly who did what parts of the project.
The paper must discuss the topics described below. I strongly suggest you organize your paper in the same way.
1. Define the market. Discuss the scope of the market.
a. How broad is the relevant definition of the good or service? (For example, is your product shoes or just sport shoes; computers or just laptops; carrots or vegetable)
b. What is the geographic scope of the market – your neighborhood, the U.S. or the world? Use a scope that would describe the suppliers accessible by a group of consumers. For example, the market for fresh pizza would be quite local (buyers only look to local suppliers) but the market for something you buy on-line (e.g. books) might be national or even global.
2. Discuss each of the attributes of market structure for the good or service selected. each of the following.
Number /concentration. Find the producers you can find in your market. Check out corporation/company names, not brand names ( Note: products must legally have the company somewhere on the packaging.) To estimate concentration, look at shelf space, ask store managers or look up in trade association publications/ web sites to find how much the major companies sell in your market.
Barriers to entry: Investigate whether new companies have entered the market lately. Look for brand loyalty, patents (listed on product), heavy advertising/marketing, or licenses. Consider the expense of capital goods, how long it takes a company to set up production, whether start-up companies have entered the market or only large, well established companies. Consider possible returns to scale or scope that could be important. Are there retail barriers? Special inputs? Franchises?
Product Differentiation. Assess how similar the products from different firms are. Are the differences real or in the minds of the consumer? Did the imagined differences arise due to advertising or other means?
Many people have done little taste tests or consumer surveys to try to establish whether differences are real/imagined. (These can also be done to test for brand loyalty. See above)
3. Discuss firm strategies:
Describe any rivalry or game strategies you see in the market; Or show how the market acts like competitive one – little rivalry behavior.
Do firms produce many products in similar or different markets or do most produce a single good or service.
Price discrimination. Are prices on very similar goods very different? Does this involve a single company or several?
4. Evaluate the structure of the market.
It may be a mixed form: e.g., some aspects may be more like monopolistic competition and some more like oligopoly.
Class Presentation : must be limited to 10 minutes-- including questions. You must use some visual aids in the presentation (powerpoint, charts, pictures – simply bringing the product to class is not particularly helpful unless you are using it to demonstrate something to the class.)
You will be graded on the clarity of the presentation and how much the class learns from it, as well as your understanding and research of the issues. It is very important that you do not just read a paper to the class (or red from your powerpoint)
The Paper: It should be about 4-5 pages (double spaced). You should footnote the sources of any information you present.
***You must pick a product by November 10. An outline of the presentation, with a brief description of each issue, is due November 15. Papers must be handed in November 22; presentations must be ready on that date.