Markets Economists study trade, production and consumption decisions, such as those that occur in a traditional marketplace. Electronic trading brings together buyers and sellers through an electronic trading platform and network to create virtual market places.
It is a broad term which refers to the total assortment of different commodities marketed by a firm. It is, however, treated as a composite. It may range from one or two product lines to a combination of several product lines or groups.
There are four principal characteristics: Length of the product mix refers to the total number of items in its product mix. Depth refers to average number of items sold by a company within a single product line.
Width is judged by the number of different product lines dealt with by a company. Consistency means how many product lines are closely related in production requirements, distribution process, end use, etc. Costs of maintaining the sales force are reduced if more products are distributed through the same outlets.
Advertising of a wide range of products is likely to yield better results. Production of items with a few minor changes in the model results in lowering cost per unit of production. Factors Influencing Change in Product Mix: Product mix is affected by several factors and particularly changes in the product may be due to the following factors: The following strategies are generally employed by the producer of the product: Under expansion of product mix, a company may expand its present product mix by increasing the number of product lines or increasing the number of product items.
It is also known as product diversification.
Sometimes the company may either eliminate an entire line or simply the assortment within a line. After that, the manager should concentrate on producing the higher margin items.
Very often improving an established product can be more profitable than introducing a new one. The alterations may be introduced in the colour, design, packaging, etc. Positioning is an attempt to distinguish the particular product from its competitors along real dimensions in order to be the preferred product for certain market segments.
Positioning aims to help customers to know the real differences between competing products so that they can match themselves and thereby satisfy their needs best. Trading up refers to the adding of higher priced and more prestigious products to their existing line in the hope of increasing the sales of existing low priced products.
Trading down refers to the adding of lower priced item to its lines of prestigious products in the hope that people who cannot afford the original products will want to buy the new one, because it carries some of the status of the higher priced product.
Products are assumed to be homogeneous under perfect competition. Today the markets are no more perfect. We live in a world of monopolistic competition where there are competing monopolies. Here products are similar but not identical. Products are close substitutes for one another. The purpose of product differentiation is to make their goods look superior.
It is this product heterogeneity which provides monopoly power to the firm.
Chamberlin has mentioned two types of differentiation: This includes real and imaginary differences. They are convenience of location of the shop, courtesy, reputation for fair dealing, etc. Models of product differentiation tend to be of two types:New Product Paper Principles of Marketing Set a price for a new to the world consumer (this means a product that is not on the market) product.
Identify a new product you think could be successful on the market and set an introductory price for it. Gary Becker, a contributor to the expansion of economics into new areas, describes the approach he favours as "combin[ing the] in general, price and quantity demanded in a given market are inversely related.
That is, the higher the price of a product, the less of it people would be prepared to buy (other things unchanged).
Find the economic latest news and headlines, as well as blogs and video from iridis-photo-restoration.com and more info about about our products and services. a product that is the same no matter who produces or sells it, such as petroleum, notebook paper, or milk barrier to entry Any factor that makes it difficult for a new firm to enter a market.
New product introductions affect the market value of the introducing firms. The average impact of the announcement of a new product is an approximate percent increase in the market value of the firm. In economics terms, he observed that sooner a finished product was released in the market, it implied lesser development costs and after the introduction of the product, being the pioneers in that field, i.e.
being an innovator/the first one to release the product, would lead to greater profits.