Discussion Question 2

Thirty years ago, the market for chicken was perfectly competitive until Frank Perdue began marketing chicken under his name. How do you suppose Perdue created a brand name for chicken? What did he gain from doing so?

What did society gain from having brand name chicken? What did society lose?

http://www.fundinguniverse.com/company-histories/Perdue-Farms-Inc-Company-History.html

http://en.wikipedia.org/wiki/Perdue_Farms

To understand how Frank Perdue created a brand name for chicken, we can look at the process he likely followed and the strategies he employed.

1. Differentiation: Perdue most likely began by differentiating his chickens from those offered by his competitors. He may have focused on attributes such as superior quality, taste, or the way the chickens were raised. By identifying unique selling points, he aimed to distinguish his product from generic, unbranded chicken.

2. Marketing and Advertising: Perdue would have invested in marketing and advertising campaigns to promote his brand. This could include television commercials, print ads, billboards, and other forms of advertising. He wanted to build awareness and recognition among consumers.

3. Consistent Messaging: Perdue aimed to create a consistent message associated with his brand. This may have included slogans, logos, and packaging elements that were easily recognizable and reinforced the brand image.

4. Quality Control: Perdue likely prioritized maintaining a consistent level of quality in his chicken products. This helped to establish trust and reliability among consumers.

By creating a brand name, Frank Perdue gained several benefits:

1. Increased Market Share: With his distinct brand, Perdue was able to capture a larger market share by attracting customers who valued the perceived qualities of his chicken over generic alternatives.

2. Loyalty and Repeat Customers: By establishing his brand, Perdue could cultivate customer loyalty. Consumers who had positive experiences with Perdue chicken were more likely to become repeat customers, leading to a steady revenue stream.

3. Pricing Power: Building a strong brand allowed Perdue to potentially charge premium prices for his products. When customers associate a brand with superior quality or other desirable attributes, they may be willing to pay more for that brand compared to unbranded options.

In terms of what society gained from having brand name chicken:

1. Choice and Variety: The introduction of a brand name chicken provided consumers with more options. They could choose from different brands that catered to their preferences in terms of taste, quality, or production methods.

2. Quality Assurance: Branding often implies a level of quality assurance. Consumers could feel more confident about the consistency and quality of Perdue chicken, knowing that it came from a reputable brand.

3. Employment and Economic Growth: The success of Perdue and other branded poultry companies likely led to job creation and overall economic growth. These companies needed employees to meet the demand generated by their brand recognition.

However, society also experienced some negative aspects:

1. Reduced Price Competition: With the emergence of a branded chicken market, the competition among producers might have decreased. This could potentially lead to higher prices for consumers.

2. Decreased Small-Poultry Farmer Presence: The dominance of branded chicken may have marginalized smaller, independent poultry farmers, who could not compete with the marketing power and economies of scale of larger branded companies.

It's important to note that the above points are general considerations, and the specific impacts can vary depending on the market dynamics, regulations, and consumer preferences of each region or country.