These factors, along with heavy emphasis on promotion, tend to help the product make significant inroads into the market. The high price also helps segment the market. Only nonprice-conscious customers will buy a new product during its initial stage. Later on, the mass market can be tapped by lowering the price. If there are doubts about the shape of the demand curve for a given product and the initial price is found to be too high, price may be slashed.
One major advantage associated with trading globally comes from an increase in profits. Typically, the reasons behind purchasing raw materials from a foreign country involve the fact that the materials are cheaper to buy and ship. In turn, this reduces overall expenses and as a result, companies can sell products for less. Supply and demand dictate that when products sell for less than the product of the competition and are of equal quality, the volume sold will rise. Increase in sales, along with the decrease in price of production will ultimately increase profits.
The importance of stock market The primary importance of the stock market is to increase the country’s economy as well as the global economy. When investors invest their money in stocks, they are contributing to the growth and development of the economy. Most companies choose to get listed in order to be able to issue shares to the public to generate funds for their growth and expansion. Besides that, issuing shares to the public is less risky compared to taking loans from financial institutions where there are higher charges for interest. If the company is developing well with these inv... ... middle of paper ... ... earn their profit.
In the growth stage, a few similar products might have entered the market, so there may be some competition present. Profits will improve in the growth stage as the sales revenues will rise also leading to inherent economies of scale. The company would still experience high advertising costs in order to attract a larger pool of customers, and in order to promote the superiority of their product over potential competitors (if any). Due to increasing sales volume, production volume will also be raised to keep up with the demand. When this happens, economies of scales will arise.
2. Merger activity is greater during economic expansions than during contractions, and mergers are more likely in bull markets – markets in which share prices are rising and lots of buying is going on. However, unless we believe that companies purchase other companies just because they are in a position to do so, this alone cannot explain the phenomenon. I believe that merger waves occur as the result of industry shocks (regulatory changes, technological developments, etc.). However, mergers can only happen if there is liquidity in markets and capital is easily available, so this is the reason we see mergers primarily during times of economic prosperity.
Thus, increased investment and productivity would lead to increased output in the economy. With this increased output the economy grows and unemployment goes down. Yet, this would not be the only policy to bring the economy out of a recession. A monetary policy must be implemented in order to compliment the supply-side policies that stimulate the economy to bring it out of recession. The monetary policy that would best work with the supply-side policies would the easy money policy.
If he decides to decrease his ownership, there will be more shares actively traded and the liquidity of the market will go up. Wit... ... middle of paper ... ... And they investigate that the liquidity of financial markets affect the choice of capital production technology, per capita income and per capita capital stock, the level of financial market activity, the real return on saving, and welfare of steady state equilibrium. By pooling and diversifying risks, by increasing liquidity or by reducing monitoring costs, financial markets and institutions are believed to have a positive impact on growth because they divert investments towards more productive activities or increase the flow of savings (Blacburn and Hung, 1998). Levine (1997) illustrates the role of finance in the growth by comparing between German bank-based system and United States securities market-based system. Which is called the “Functional Approach “.
PLC analysis is very important, if done properly it could warn the company about a products position in relation to its market. PLC forces companies to continuously focus on the market and take any quick, necessary and corrective actions faster, however the process is not as easy as it seems. To see how much influence Ferrero Rocher’s products have in the market, there are different phases in their life cycle, as shown in figure 7. Let’s take a look at the four stages of a PLC and where some Ferrero Rocher products stand: Introduction: At this stage of the PLC, the product is introduced and there is heavy marketing and promotions. Sales take off slowly as the product grows slowly or fails miserably.
Using the capabilities strategically will make a core competency, which brings the significance or a valuable asset also referred as core competency for a firm. Depending on the industry, competitor environment, general environment such as demographic, socio cultural, economic, political/legal would vary. Any firms that find their signature activity would make the strong stand in the market for its firm. This combination and harmonization of multiple abilities make competencies difficult to imitate. Once the company establishes the core competencies that can be well differentiated over other firms, and uses them well they are likely to enjoy profit and eventually finding themselves in significant market place.
Marketing managers use marketing mix as a business tool in marketing. Marketing mix synonymous with the 4Ps which were amended and listed by Eugene McCarthy as Product, Place , Price and Promotion. First of all, Product refers to the product should fit the task the target consumers want it for, it should work , and it should be what the consumers expected to get. For instance, its packaging, labeling and offering. Therefore, this always remind marketing managers need to do careful research on how long the life cycle of the product is likely to be and focus their attention on different challenges that they are facing when they are developing the product.