INSTRUCTOR DISCUSSION NOTES:
Guess what? People donít like direct mail the way they used toÖ

1. By creating more targeted direct mail campaigns, how do companies hope to affect to elasticity of demand for their products?

Elasticity should decrease, because the targeted consumers should have more interest in the product.

2. Why isnít the market for financial services and credit cards perfectly competitive?

Because the products offered by the financial services companies, while similar, are not perfect substitutes. Small differences exist between each firmís products, which makes the industry monopolistically competitive.

3. What impact do you think the Internet has on direct mail campaigns? Why?

Answers may vary here; emphasis on potential reduction of response rate, increase in direct e-mail, ability of consumers to do their own research on products.

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