Consumer satisfaction is important because it provides marketers and business owners with a metric that they can use to manage and improve their businesses. Hence increase in prices damages the already established consumer satisfaction. Harris, L. and Gurel, E., (1986) If the business would go for the argument of reducing prices of its products, the good effects will include; Increased sales volume. The law of demand and supply states that demand increase as prices decrease. The business will witness higher sales volume as the reduced prices will attract more customers to its products.
Trade creation occurs when low cost producers within free trade area replace high cost domestic producers. These agreements create more opportunities for countries to trade with one another by removing the trade barriers and investment. Trade creation allows member countries for a wider selection of goods and services not previously available. They can acquire goods and services at a lower cost after trade barriers due to lowered tariffs or removal of tariffs which will encourage more trade between member countries the balance of money spend from cheaper goods and services, can be used to buy more products and services. Regional economic integration significantly contributes to the relatively high growth rates in the nation.
As a result of which cost is decreased and the productivity is increased, prompting higher rates of production. Economic Development Free Trade involves risk taking through increased sales and market share. The point is that when developed nations like the United States exploit free trade, their economies develop. This development floods into more modest nations that are financially unsteady yet are interested in exchange. The advantage for poor countries in being able to trade for capital is that the payoff is more immediate in their private sector Global Cooperation Free Trade strengthens the organizations to help the standard of law.
It is able to increase the people’s satisfaction, merchants’ profits and nations’ wealth. The people would be satisfied with an influx of new products, which may not be native to their regions. Merchant profits can potentially increase with the opportunity to buy a good where it is in surplus and sell it in a region where it is scarce and sell for a larger profit. This however could only be successful if the merchant takes into account the cost of transportation and any other costs that may come from moving goods from one region to another. A nations wealth may increase with the export of goods and resources of which are plentiful.
First of all, it is a chance for a company to expand its current market. Because of the huge population around the world, advertising products and services overseas can create and attract a larger size of consumers as well as increasing profits (Bradley, n.d.). Another benefit brought by international marketing is that firms can minimize operating costs (Bradley, n.d.). For example, cheaper costs such as labor cost and advertising cost, or even tax in some host countries are bargains for companies aiming to target the international market. As a result, costs are minimized while profits are maximized as much as possible.
With investments pouring into the economy, companies are able to make bigger profits to reward their shareholders with dividends. Although there are disadvantages of a public listed company, the advantages outweigh the disadvantages where companies are able to seek for additional funds for future expansion and growth. A public listed company also has a better reputation and credibility where it is able to contribute to the global economy.
In using this approach the initial dollar amount of a product is set lower, then overtime the items will slowly increases in price. This particular strategy helps to rapidly reach a wide fraction of the market to hopefully initiate positive word of mouth throughout our target market. This is our best option as a new business coming into the industry. Our main objective in using this method is to draw in consumers that might be unaware of what products we will be offering. In creating a new company and implementing innovative sales systems, we would like to take some of our competitors business by initially drawing customers in with offering lower prices.
Better quality goods including more variation of goods and helping maintain closer relations between countries. There is better utilization of benefits and resources in the countries. Economic growth- in free international trade the countries involved in free trade experience rising living standards, increased real incomes and higher rates of economic growth. Larger market to sell, so more potential customers for firms Encourages exports and imports so consumers have more choice so a higher standard of living Firms produce higher quality of goods due to increased competition The negative points of Free International Trade are- Facilitated commerce system works effectively if all the countries contribute with each one in turn and take after this methodology. On the off chance that a few nations choose that a couple of countries decide to expansion more by driving import constraints, the plan of encouraged business can't work.
Globalization enables worldwide access to sources of cheap raw materials, and this enables firms to be cost competitive in their own markets and in overseas markets. Seeking out the cheapest materials from around the world is called global sourcing. Because of cost reductions and increased revenue, globalization can generate increased profits for
Because this trade is cheaper in another place companies, to save money need to move their business production there and then send it back to the country of origin. “One reason that inexpensive labor is beneficial is that it allows poor nations to produce commodities more cheaply than wealthy nations where labor is expensive.”(David Harvey)This