Sunday, May 11, 2008
5, 5 dollar, 5 dollar footlong!!!!
So im sure we have all heard the catchy commericals for Subway's 5 dollar foot longs.... Well i recently saw a 5 dollar foot long commercial for quiznos!! those copycats... I thought this was a good example of competition. I think that Subway and Quiznos are monopolistic competitors... and as Subway dropped thier price for a foot long.. quiznos was forced to drop thiers as well because the market demand dropped to 5 dollars. This is the idea of how competition is good for consumers because it raises thier consumer surplus... i now wonder if 5 dollar foot longs will become the norm...
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5 comments:
I laughed when I saw the title of this, because I've heard your amazing voice singing it at least once a day lately. I have not seen this commercial yet, but I'm kind of wishing that this would start happening in regards to other food markets as well. Or maybe even clothes!! That would be really nice if American Eagle, Hollister, Abercrombie, whatever all decided that they had to drop their prices. SHOPPING SPREE!
You got it, Morgan.
But now I'm hungry.
wow morgan, that is such a perfect example. And unlike Taylor, I have seen these commercials. They're the ones where the old chinese lady eats 5 dollars! haha I think this whole thing is probably not as good for quizno's if they put more meat in their sandwiches than subway, because won't they be making less profit than subway if they have more costs in the meat department?
by the way, if anyone hasn't seen the commercial, here's a link:
http://youtube.com/watch?v=nVK3eWjeOLk
Have you noticed that even though the original deal is over at Subway, there's still eight subs they're selling as $5 footlongs?
Smart move on their part, I think. They might be decreasing their total revenue somewhat for each sub they sell, but they're selling so much more that it has to have balanced itself out. Otherwise, I'm assuming it wouldn't make much sense for them to continue with this deal.
Another angle I see is that if they suddenly raised the prices of all their subs back to regular prices, they'd lose a lot of customers. My boyfriend and I took advantage of this deal a lot, as it made going to Subway just about as cheap as going to any other fast food place in town, with the advantage of being a little cleaner and less greasy. But if they had suddenly upped the price again, I think I'd be so put off that I'd almost be attempted to forgo the restaurant for McDonald's (ok, maybe not that desperate). Either way, I think a lot of consumers' expectations were adjusted to the idea of paying only $5 for a footlong sub, so not as many people would have been as willing to pay for a normal priced one after the deal ended, even if they had been before the deal had ever been instated.
how long is this promotional deal going to last? i would be fascinated to see the whole market strategy behind it, including the difference in revenue, short term losses/profits, etc. though wonderful for consumers, there must be some drawbacks to go with the benefits of this deal for producers.
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