The size of countries affect the economic performance since low fertility and immigration reduce the market size of a country resulting in low production, high domestic product price and lack of competition between importer and exporter competitors. There is less subject to foreign aggression and safety is a public good that arise if a country is larger. High population size allows a country achieve economies of scale in the production of goods and services especially public goods. Lower the per capita cost of public goods where more taxpayers pay for governments such as infrastructure, and public health. The per capita cost declines with the number of taxpayers (Alesina & Spolaore, 2005).
The expansion of consumption leads to the increase of investment, and the increase of investment leads to the decrease of price, higher salaries, and higher purchasing power. Only when the market is rapidly expanding can we promote and stimulate economic expansion. "The tomb of Titovs, from the current manpower in Western Europe, proposed that Western Europe falls into a category of high margins, low capital turnover, and high prices There is a vicious circle of "small market and conservative entrepreneurship." Therefore, only through the fierce competition under the common market or trade liberalization can entrepreneurs be forced to stop large-scale production by stopping the old-style small-scale production in the past and eventually there will be a virtuous cycle of positive expansion. Combining the explanations of Sitowski and De Neu, we can grasp the core of the big market theory, that is, realize economic benefits by expanding the market and acquiring economies of scale.
The brands set different prices of its product base on design, size and heritage. This is due to brand loyalty that each brand possesses by each luxury group. Particularly put extensive brand portfolio to cover different customer segments. As such, the brand is niche in the market leading to rivalry of the competitors in this industry to
However, entering a foreign market often presents difficulties. It is influenced by a number of factors, among which can be economic, social, cultural and environmental. To achieve its goals, a company must make sure that the chosen strategy allows fully exploiting
In different countries, many aspects can be studied more on why people purchasing luxury brands. A study by Shukla (2010) said that different cultures serve different type of factors that affected the purchasing intentions towards luxury products. The research took two different cultural background countries (India and
Concerns of Developed Countries Unemployment Due to Cheap Labour Companies outsource their labour to countries where wages are less than in their own. This deprives the host country’s population of labour opportunities and its economic growth. This may even extend to companies shutting down their already operational business quarters in the host country and force local people into unemployment. Economic Inequality Anti-globalists label the concentration of wealth in the minority as a frightening danger and a threat to societies and their economies. As these few dozen individuals and companies absorb wealth from across the world, they grow in such a manner that they polarise the market and suppress other emerging companies.
Besides that, there are always problems with market economy system. There are some disadvantages such as the exploitation of workers and uncomfortable working condition, investment priorities and wealth becomes distorted, goods cost will be lower due to the mass produced, prices may give false or inadequate signals to producers and consumers, high levels of unemployment due to the overproduction of goods, and produce a skewed distribution of income through large gap between the rich and the poor. Free competition is the spirit of market economy system, naturally led the group with income and wealth in order to compete with any particular group. The market economy instead of making competitive but it leads to monopoly. In this paper, the writer would like to address the reasons of market economy is a poor choice for developing country to stay
Taxes, labor laws, and international relations are the issues that most affect the aspect of this part of the analysis. Economic - This portion of the analysis focuses on supply and demand, growth, exchange rates, and the overall economy of the place the business will be taking place. Social – Targets the possible customer’s environment such as, demographics, age, lifestyle trends, and cultural attitudes. Basically the social aspect scouts the neighborhoods to mathc their client with the right
The prices of developed country products are comparatively higher compared to products of developing countries due to large scale demand and economies of scale in production of goods in developing countries. Brand Image: The products of companies with a strong brand identity such as Apple, Google, Sony etc. are comparatively higher. These companies can charge a premium price in the international market due to their higher brand image. Government Regulation: Companies exporting their goods should be familiar with the demand and supply of the concerned country so that they can fix the price of their products.
2.3.2 Sales Promotion and its Relationship with Consumer Brand Preference It has been acknowledged that consumer and trade promotions can be a very effective tool for generating short-term increases in sales, and many brand managers would rather use a promotion to produce immediate sales than invest in advertising to build the brand’s image over time (Belch & Belch, 2003). They, however, caution that overuse of sales promotion can be detrimental to a brand in several ways. The first is that a brand that is constantly promoted may lose perceived value. This is in line with Teunter (2002) and Jha-Dang’s (2004) assertion that the presence of a promotion will lead consumers to attribute lower quality to the brand owing to the fact that it is on