The Network effect, Global Marketing Audit, & Economic/Political Democracy - Essay Example

Coming to the second aspect, a global marketing audit is defined as "a comprehensive, systematic examination of the marketing environment and company objectives, strategies, programs, policies, and activities.” (Keegan, 2002). However, its scope and expanse needs to be contextualized. The top management needs to be very clear about the aims and objectives, what they seek from a marketing audit of this type, and the modus operandi by which they aim to get it. Coming to the third aspect, it is seen that it is now accepted that some form of an economic market is better approach to achieve high economic growth that is widely desired.

The economic crisis that has hit in the recent years has made it necessary to refashion some of the structural aspects in most fundamental institutions of a market economy. Network effects, otherwise known as network externalities, can be defined as a special case of increasing returns. The benefit that one derives from purchasing the product depends on others who are using the product. An example for network effect is that, people who prefer to buy fax machines will consider them to be more valuable when other people prefer to buy compatible fax machines.

It is straightforward relationship to increase returns. The product will become more valuable to consumers, only when it becomes popular and thus it gives an increasing advantage over its competitors. As a result, smaller competitors disappear from the market. Network effects may also give rise to path dependence and lock-ins. Monopoly is a likely outcome of network effects. It is then shifted towards the best technology or product which is chosen. The literature says that there is a possibility of getting the wrong monopolist, producing the wrong product, rather than a monopolist charging the wrong price or producing the wrong quantity.

(Liebowitz, & Margolis, 1998). Network effect causes a goods or service to have a value to potential customers