Question

When the advertising of Brandmoor’s, a regional department store, is created to encourage and maintain brand loyalty, it supports successful price increases. Economists would call this department store’s strategy an example of

a. direct response advertising.
b. selective demand stimulation.
c. primary demand stimulation.
d. inelasticity of demand.

Answer 1

The correct answer is B: selective demand stimulation

Step-by-step explanation:

Selective demand happens when companies deliver messages that portray their brand as the best match for the needs and desires of the target market. Selective demand features the advertiser trying to influence the target audience to select its brand over alternatives. Selective demand advertising is for businesses competing in well-established industries and markets.

Companies use a variety of strategies to depict selective demand. Some use benefit positioning, where they showcase the specific benefits of their products that are unique in the market. Others use competitive positioning, where they state how their products are better or distinct from those offered by competitors. Another positioning alternative is user positioning. This is where the brand focuses on matching its benefits to the needs of a particular type of user.

Price elasticity of demand (PED) is an economic measurement of how quantity demanded of a good will be affected by changes in its price. When demand for a good or service is static when its price or other factor changes, it is said to be inelastic (inelasticity of demand). It can be influenced by marketing actions, but it is not a marketing strategy in itself. A strategy that influences inelastic demand is to differentiate a product or a brand. If a brand is perceived as unique, consumers will be less impacted by price change.