E.T. the Extra-Terrestrial

Media Type: Film Clips Topic: Game Theory, The Firm

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This clip has an interesting example of product placement. Originally, the filmmakers offered Hershey's the chance to have M&Ms used in the movie. Hershey's said, "no thanks." The filmmakers instead approached Mars, the manufacturers of Reese's Pieces -- at that time a rival product of M&Ms that was not terribly successful. The blockbuster, E.T., caused demand for Reese's pieces to double and firmly established the product in the minds of many Americans -- a huge success for Mars for agreeing to a $1M product placement deal. This is a great example of how firms' must think beyond their advertising budgets and consider the repercussions that may occur when market share is lost to a rival. In this case Hershey failed to protect its position in the market.

Check out this article for more information.

This clip idea was provided by: Dmitriy Krichevskiy

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