Final answer:
Sales associates should study competitors' products and marketing materials to understand how to differentiate their offerings and anticipate market trends. This knowledge can make advertising more effective by impacting the firm's demand curve, potentially selling more or at higher prices. Equipped with competitive insights, a business can maintain a strategic advantage and improve profitability.
Step-by-step explanation:
It is important for sales associates to study the products or services of their store's competitors, as well as their marketing materials, to gain a comprehensive understanding of the competitive landscape. This includes analyzing advertisements, fliers, television commercials, and websites. By doing so, sales associates can effectively communicate to customers how their store's offerings are differentiated from competitors' products, which is crucial in a marketplace characterized by monopolistic competition. Furthermore, understanding competitors' marketing strategies, like the use of associative learning in advertisements, enables sales associates to anticipate market trends and adapt their own strategies accordingly. For instance, if competitors are highlighting specific features in their marketing materials, a sales associate can emphasize how their store's products have superior or additional benefits.
From the perspective of the demand curve in monopolistic competition, effective competitive analysis could help a firm's advertising make its perceived demand curve more inelastic or shift the demand curve to the right. This translates to the ability to potentially sell a greater quantity of products or to charge higher prices, thus increasing the firm's profits. Additionally, by being knowledgeable about what attracts customers, such as unique features or added value, a business can maintain a competitive edge. This is essential because the influx of new competitors with different or improved offerings is a constant threat.