Malcom Gladwell made a speech in 2006 on product differentiation. He keeps things interesting and throws in small facts of life that are very intriguing. This speech was on how Pepsi was trying to reform their soft drink to find the perfect “Pepsi.” The correct thing to focus on would be to find the perfect “Pepsis.” This was proposed by a great model Malcom Gladwell looks up to Howard Moskowitz. Howard explained how making 1 product to satisfy everyone, is nearly impossible and not reasonable. He told Vlasic pickle to not make the perfect regular pickle but create a new flavor to cater to a whole new group of people’s tastes. Moskowitz changed the entire spaghetti sauce industry. From 1 flavor of Prego all the way to 36 there is a Prego flavor to satisfy the entire industry.
We were asked as a class to relate Malcom Gladwell’s speech to our current unit in economics. Other companies act in the same way to create or better their own product to be on the same level and compete with other companies. This is called product differentiation making the product more appealing. If two products are close in price the consumer’s decision is based on appeal, taste, sound, and or quality, etc.
Monopolistic competition is when there are many similar products being produced by several different companies. There is a lot of competition in the fast food fry business. Burger King and McDonalds both have the dollar sized fry. So how does the consumer choose, by convenience (which one is closer), taste, appearance, or number of people traveling in and out? There are many things that create competition and appealing to all different groups of people rather than the population as a whole according to Moskowitz, is the most efficient way.