Final answer:
Banana Republic can increase demand for its products through strategies that create a perception of exclusivity and quality, along with pricing tactics like offering occasional discounts or limited-time offers to provide a sense of value and urgency.
Step-by-step explanation:
Monopolistically competitive firms, like Banana Republic, can increase demand for their products through various non-advertising strategies. One such tactic is the creation of a perceived sense of exclusivity and quality. For instance, clothing retailer Abercrombie & Fitch utilized landscape imagery of the East Coast yacht club to create an aura of casual luxury, thereby appealing to consumers desiring a premium image. Similarly, Banana Republic may use a mix of sophisticated store decor, high-quality product displays, strategic product placement, and exceptional customer service to differentiate their products and enhance their brand image.
To encourage sales, Banana Republic and others may implement strategic pricing tactics, such as anchoring high prices with occasional discounts or sales. This creates a sense of value among consumers who perceive they are getting a high-end product at a reduced price. Promotion through limited-time offers can also spur demand by instilling a sense of urgency to purchase before the deal expires.