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: Research Proposal - Assignment Example

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The market forces of supply and demand The market forces of supply and demand What is the market? A market can be defined as an arena or nominal place that facilitates exchange of goods and services in return for money or money’s worth (Thompson, 2007)…
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Download file to see previous pages The market consists of actual and potential customers who require certain goods and services, and possess the willingness and cability to pay for them. Markets are never of fixed sizes. The size of a market can either be increased by decreasing the product's price, or idecreased by adding the product price due to more salient feature (Thompson, 2007). All this depend on the marketing orientation, as the former implies mass marketing whereas the latter is referred to as niche marketing. The market may also expand through altering some legislation which reduces restrictions and taxes on certain products (Thompson, 2007). What is demand? Demand is the economic expression of desire to purhase goods and services (Thompson, 2007). The essence of demand depends on the willingness to exchange value, not just the desire. Demand also consists of the ability to pay. Value can be in terms of labor, goods, or money (Thompson, 2007). Demand results to subsequent purchase of a good or aquiring a service. Demand varies from negative demand that results to avoidance of certain products to excessive demand which makes supply not sufficient enough to meet the extra demand. Different marketing techniques are utilized to counter both positive and negative demand. Among these marketing techniques are conversional marketing, stimulation marketing, and developmental marketing (Thompson, 2007). The relationship between price and quantity demanded This research is aimed at determining what relationship exists between price and quantity demanded. Price and quantity demanded exibits an inverse relationship (Thompson, 2007). This is so because any rise in prices causes a fall in demand of the product. Consumers will hence opt for substitute goods that are able to mmet their utility but whose price has not risen.The relationship is however different for Giffen goods. For such goods, the relationship is positive (Thompson, 2007). As already stipulated, Inverse Relation means an increase in one Valiable will result to a decrease in another Variable, ceteris paribus. if other factors remain constant, and the price of a commodity rises, then people will prefer buying lesser units of that commodity. The reverse is also true, since decrease in prices will increase the demand of the products (Thompson, 2007). Due to limited resources duch as income, people will opt for different products that have the ability to fulfill their needs, hence they wont spend extra in one commodity. Increase in price, therefore, is most likely to lead to lesser quantity demanded (Thompson, 2007). Market demand and individual demand The ressearch also intends to determine the variations that exist between market demand and individual demand. Marketing demand can be defined as the combined demand of everyone who are both willing and able to buy a good in a market (Frisch, 2003). Individual demand is the demand of a single consumer in the market for a particular good or service. Individual demand is the demand of one firm or individual. It represents the amount that a single consumer would purchase at a specific price (Frisch, 2003). Individual demand can be represented by a single person, a single family, or a single firm. The movement of the Demand curve The demand curve is a vital component of this research. The movement of ...Download file to see next pagesRead More
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