Dr. Jonathon Deans writes a fascinating essay on target markets in the fountain pen retail industry, particularly in the US.
Now we increasingly see Anderson Pens, Goldspot Pens, Pen Chalet, and Vanness Pens all trying to take a chunk of Goulet’s market share for themselves. If these competitors are successful, it means Goulet will lose some of their sales volume, thereby raising their average costs and reducing profit. At the same time, the competitors’ sales will rise and increase their profit. Eventually, we’ll start to approach an equilibrium where each firm will be earning a normal profit. Any activity that yields a profitable advantage over the competition — marketing skills, superior internal organisation, etc — will be identified and duplicated. That’s why we see Vanness Pens on Instagram, Anderson Pens on Periscope, Pen Chalet sponsoring podcasts, and just about everyone sponsoring blogs.
As Deans guides readers through fundamental economic theory as it relates to fountain pen retailing, he points out that in the end, fountain pen consumers benefit.
This is a great long read.