Coles, a major Australian grocery company, has had great success with its "Down Down" advertising campaign. The advertisement centers on several product price cuts and features the appealing rhyme "Down Down, Prices Are Down." The campaign hopes to boost Coles' reputation as a budget-friendly supermarket in an effort to win customers against rivals notably Woolworths. The impact on Market Share and Profits Market Position: Coles' "Down Down" advertising campaign has helped the company increase its market share by establishing a distinct value proposition. Coles has influenced consumers to believe that they receive greater value for their money due to the company's persistent promotion of price cuts. Coles' growing market share may be attributed in part to this strategy, which has appealed with budget-conscious consumers. As Coles' biggest rival, Woolworths faces pressure to counter their advertising efforts. They have reconsidered their pricing policies by reducing their cost of goods to keep customers and counteract Coles' low prices. Profitability: The effect on profits, however, is complicated and inconsistent. Although the "Down Down" promotion has increased Coles' consumer base, the lower pricing may have affected the retailer's earnings margins. To obtain a lead in the market and boost overall sales, it is conceivable that Coles agreed to reduced margins on certain goods. Woolworths' revenue may have been affected by the necessity to react to Coles' marketing by either matching or undercutting pricing. If the price war goes on, the firms' intense marketing and low prices will inevitably drive down their profit margins.

 

 Draw appropriate diagrams for this market showing the market outcomes for Coles and Woolworths.