Question

What insights would game theory offer (a) a small pizza restaurant operating in a crowded college market and (b) a detergent manufacturer seeking to bring out new products in established markets?

Answer 1

A game theory constitute a form of theory for denoting social aspects and cultures among the market players in the compeition. The theory acts as a technique used for the study of the branch of economics.

Opening a restaurant always constitute any respective kind of risks. There exist factors or elements that can provide a positive as well as a negative response to the marketers. A pizza is always an attractive food item among people especially in youngsters. This kind of restaurant working in a crowded area will provide profit to the company and if that too in a crowded college market will promote more scope to the company in which the restaurant can attract the youngsters and could serve according to their taste. By selecting such a kind of business in a college market will give more competitive advantages as well as more benefit to the business thus adding value in it. The game theory that give away kind of strategies in operating a pizza business such that attaining customer loyalty in business, developing new products that go with the taste of the customers, record the level of customer satisfaction, maintain a clear cut communication, promote offers with coupons and bonus cards, always keep in touch with customers, go for feedbacks.

If a detergent manufacturing company focus on bringing out with new products in market which is established, the customers will always focus over the name of the brand, logo, reputation, quality of the product, price, packaging and also the product availability as well. If a new product enters into a market, then the customers will make a close observation regarding the product, features, differentiating it with the competitors' product and also make a search on how the new product is different from that of the competitors and by what aspects. The game theory constitute kind of stategies to be adopted by the detergents manufacturing company in order to win a market which is already established. These include making a clean analysis of the market situation, market size and marketing strategies, a study to be carried out over the customers, competitors, suppliers etc, understanding of the political, cultural, geographical and other environmental factors and analyzing the company swot analysis