Blog Post 5: Maverik's Competitive Market and Price Strategy

Types of Competitive Markets

Like many other sellers in the market, Maverik's price is constrained by the type of market in which it competes in. Formally, the different competitive market is divided into four different divisions. Before I go into which competitive market Maverik is in, I will explain each market segment and explain the different price constraints firms in each market must abide by.

Pure Competition

Many sellers who follow the market price for identical, commodity products. Products within this competitive market are usually very similar. Also, the market sets the price for each product, so the objective of each seller's advertising is to inform consumers what they are selling

Monopolistic Competition

Many sellers who compete on non price factors. Within this competitive market, advertising's main focus is to differentiate each own firm's products from it's competitors, and the price range is usually within a small window, depending on the quality of each product.

Oligopoly

Few sellers who are sensitive to each other's prices. In this competitive market, companies attempt to avoid price competition because it can lead to disastrous price wars that result in a loss of money for all players within, and prices usually vary depending on the industry.

Pure Monopoly

One seller that sets the price for a unique product. Within this competitive market, there is no price competition and there is little to no advertising since there aren't any other unique products to compete against

So which competitive market is Maverik a part of?

After reading the description of each, it is quite easy to tell that Maverik Lacrosse is within the monopolistic competition market. Within Maverik's Market, there are numerous other players who create products who have the same use. For all the products within this competitive market, advertising must be focused on what makes your product stand out from the competition. Most recently, Maverik released a new line of Apollo Lacrosse shafts. 

As you can see from the commercial above, Maverik's focus of this advertisement is to differentiate their product from other competitors by showing the benefits of the product. This product is advertised as the lightest, yet strongest shaft on the market, and I believe this commercial (through LacrosseMonkey.com) does a great job of highlighting all the benefits that comes along with purchasing this shaft, instead of the competitions. 

Maverik's Price Strategy

Since Maverik's price for each of it's product is constrained by it's competitive market of monopolistic competition, they must create prices that justify the purchase of their products in comparison to the competition. Keeping this in mind, many top of the line products that just come out usually have prices that are very similar to each other. For example, Maverik's new Apollo shaft has a retail price of $119.99, which is just about what you will find from some of the company's main competitors like Warrior and STX's recently released shafts. Since there isn't a huge price differentiation, most advertising goes towards concrete reasons such as weight, durability, and feel for buying one product instead of the other.