Home > categories > Construction & Real Estate > Cement > Which of the two (cement industry or automobile industry) would most likely advertise and why?
Question:

Which of the two (cement industry or automobile industry) would most likely advertise and why?

The cement industry is an example of an undifferentiated oligopoly. The automobile industry is a differentiated oligopoly.

Answer:

In contrast to an oligopoly like the automobile industry, the cement industry has many manufacturers/providers and the barriers to entry are low (i.e., any firm can open up shop with little capital investment compared to the auto industry). However, the key to your question is what you already stated – the automobile industry offers a differentiated good. Unlike cement which is a commodity (i.e., a physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type) and doesn’t readily allow for brand or product differentiation; an automobile line can be differentiated (i.e., 4x4, sedan, luxury, etc.) thus enabling marketing and advertising to extol those unique qualities to consumers.
does it matter to you what 'brand' of cement the builder of your appt block used? Or does it matter moer what brand is your car/dream car? Certainly the auto industry is more likely to advertise to the general public. Afterall the target of the cement companies is more likely to be developers, builders... Hence they would advertise in specialised journals rather than papers for the general public. Hence, I'd say that the auto industry is mor elikely to advertise using different media, whereas the cenment industry woud probably focus on industry publications.
Well, you basically answered this question on your own. The automobile industry would most likely advertise because their products are differentiated and so advertising would be more beneficial compared to advertising an undifferentiated product.
You know it's the auto industry, as I'm sure you've seen tons of car ads but few cement ads. The deal is that you have many separate car companies vying for the business of a market with varied tastes and needs, and so will try to appeal to the part of the market that they believe they can attract. Cement companies are all offering the same product and people looking for cement therefore don't look to ads to decide anything about the quality of different kinds of cement, or who to get it from - anyone near them will do.

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