There is a near limitless supply of snack food available at any gas station, grocery store and convenience store in America, including packages pretzel products. With this many potential competitors, Auntie Anne's Hand Rolled Soft Pretzels must compete vigorously. The competitors range from very large, well-financed competitors with rock-solid brands to mom-and-pop operators and small businesses. Some sell products at a premium, while others are cost leaders. This is one of the most competitive spaces in U.S. retail, and as such it is almost impossible to find a niche in the market that is unfilled.
3. In order to compete better in an industry characterized by a state of monopolistic competition, Auntie Anne's Hand Rolled Soft Pretzels must differentiate itself from competitors. Doing this takes advantage of the imperfect information on the part of customers that allows Auntie Anne's to be a price...
The degree to which the company can be a price maker reflects directly on its ability to create differentiation. Therefore, Auntie Anne's needs to create that differentiation. Part of this will come from the product -- being a pretzel company and not a purveyor of some other product helps to differentiate it. Marketing plays a major role, because it helps to influence the way that people perceive the company, its brands and its products, on a standalone basis of vis-a-vis competitors. The more the firm differentiates itself, the more it creates a small pocket of monopoly power -- that is to say it increases its market power by reducing the propensity to substitute the products of competitors.
Works Cited:
Market Structures or Models of Market Structures. Del Oro Social Science Department. Retrieved on December 2, 2011 from: http://www.doge.us/govecon/MarketStructures.pdf
