we LOVE econs

k, this might be irrelavent, but here goes.

In economics, in a competition for market share, companies employ the use of demand elasticity concepts such as cross elasticity of demand. Competition strategies would normally involve lowering of price (such as in a price war) or differentiation of product (to decrease CED). However, with the development of new business strategies, wonder if its ever possible to lower price and differentiate your product at the same time?

Actually, while this may seem inplausible, such strategies have been used by many companies over the years. Yellow Tail, one of the best selling wines in the world, is a very good example. Premium wines are often used to show class and taste in dinner parties. With high aging quality and extremely reputable wineyard legacy, their prices are naturally sky high. However, the makers of Yellow Tail found out that these factors were exactly what put many people off, who felt that drinkers of such wine were vain and pretensive.

Yellow Tail eliminated all these factors, and incorporated a soft and approachable taste that was appealing to many alcohol drinkers, and its bottle had a striking, simple, and nontraditional label featuring a kangaroo in bright, vibrant colors of orange and yellow on a black background, as opposed to the confusing technical jargon found on premium wines. Through this, it succeeded in both reducing cost and thus price through removing aging and focus on reputable wineyard legacy, as well as differentiating its product to appeal to many more consumers. It has achieved much lower cross elasticity of demand with other wines, cheap or premium, and also at a lower price.

Jinyang