Economics Essay

1571 WordsMar 25, 20097 Pages
Boise Office Solutions (Boise) is a ‘one-stop shop’ that offers products and services which aim to satisfy every customer’s needs. Exhibiting a broad range of office supplies, technology products and office furniture makes Boise a large competitor in the Australian office supplies industry. Boise is one of many firms who supply office products. Operating in a monopolistic competitive market has many implications for the firm. The following will explore ways Boise distinguishes their products and services from their competitors and how they maximise profits in the short and long term. Boise functions in a monopolistically competitive market that envelops many other office product suppliers who sell similar or close substitutes. Product differentiation is essential in non-price competitive markets especially when competing against large reputable corporations such as Corporate Express, Office Works, Vikings and National One. Firms emphasis product features, service and quality which helps build customer loyalty towards their company and brand. Firms aim to make it difficult, or near impossible for competitors to imitate the differences. Customers must be able to distinguish the brand through distinct product features and notable differences between other similar products. Consumer’s by nature are price sensitive so by promoting the distinguishing features creates customer awareness. The price differences are offset by the perceived benefits the customer will receive. As Farris and Happel assert “the more the product is differentiated, the more firms become independent.” (1988, p263). Aiming to steer their customers away from price orientation, Boise’s CEO Chris Milliken states “Boise began to re-examine and customise their products and services, by differentiating their products in ways that they can offer to their respective customers to get them

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