There are many key structures to marketing. These marketing structures are used by many major corporations and at times are taken advantage. I will be discussing four of these market structures, which are perfect competition, monopolistic competition, oligopoly, and monopoly. Understanding these marketing structures and making it work for a company to grow also produce for their customers.
Perfect competition out of the four marketing structures is generally the best for equal customer and supplier relationships. Perfect competitive market speaking in a hypothetical market is where completion is at its greatest possible level. For a society and for consumers the best possible outcomes could be produced. Perfect completion is a structure …show more content…
The firm is better off by producing, and not shutting down. When the market price is higher than the minimum average value cost, minimum revenue and minimum cost should be compared to find out the optimal level of output.The entry and exit are the only long run adjustments to consider. The firms in this industry have identical cost curves. The industry is in a constant cost to the scales. In long run, if economic profits are earned, firms enter the industry, which increases the market supply, causing the product price to go down. Until zero economic profits are earned, then the supply will be steady. If losses are incurred in the short run, firms will leave the industry, which decreases the market supply, causing the product price to rise until losses disappear.
Monopolistic you can say “in reality, the closest to perfect competition is monopolistic competition where part of productive and allocative inefficiency is traded for variety and product differentiation” (Papatheodorou, 2006, pg.224). In a monopolistic competition is firm where a market situation with a relatively large number of sellers offering similar but not identical products. Certain examples of monopolistic competition are fast food companies. Another example of monopolistic competition is clothing stores. For a lot of firms each has a small percentage of the total market.Differentiated products are a variety of the product makes monopolistic
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In summary, marketing is very important for a business to achieve success. Many businesses have a difficult time in this area. With the stiff competition, businesses struggle to stand out among others. Other companies resort in unethical and unfair schemes just to win the competition. But eventually find themselves in great loss and failure. As businesses all over the world enter into a gigantic marketplace, every business owner is faced with convoluted market competition. Nevertheless, any entrepreneur can be different and become successful in this matter. In every product sold and in every service provided, patience and hard work should take precedence to ensure quality. Products and services should be marketed honestly, planning should not be done with evil
Monopolistic competition involves many firms competing against each other, but selling products that are distinctive in some way. For instance, stores that sell different kinds of apparel; eating places or markets that sells a variety of food. You can even think about sporting goods and alcohol. These are items that may be similar to a certain extent, but totally different in terms of perception because of the brands, and how they are marketed. When merchandise is unique, firms can have a mini-monopoly on a certain style or a certain brand. However, the companies that make these products have to compete with other brand names. The term monopolistic competition captures this mixture of mini-monopoly and tough competition.
In a perfect competition substitutes are abundant and to stay competitive one will need to offer the lowest possible price. In monopolistic competition, the differentiation is based on quality and competitive advantage. Substitutes are not as readily available so a consumer will likely decide on the better value that comes with better quality.
1. Describe each market structure discussed in the course (perfect competition, monopolistic competition, oligopoly, and monopoly) and discuss two of the market characteristics of each market structure.
There are four types of market structures: Monopolistic Competition, Monopoly, Oligopoly, and Perfect Competition. Monopolistic Competition is also known as competitive market. In this market structure, there are a large number of firms that produce similar but somewhat differentiated products for the same target customers. The market share is also divided among large number of firms making it difficult for one firm to become the market leader. On the other hand, Monopoly is a type of market structure in which only one firm controls the whole industry. There are strict barriers to entry for new firms due to governmental restrictions or the monopolistic power of the firm itself. In Oligopoly, the whole industry is dominated by a few large scale firms that set prices, introduce innovative products, and use heavy campaigns to attract buyers. All other small scale firms follow the changing market patterns set by these oligopolistic firms. Lastly, perfect competition is a market structure in which there are a larger number of firms that produce similar as well as differentiated products for
Market structure is the physical characteristics of the market within which companies react. This means that there are different kinds of market structure based on how companies work together within a particular industry. Location and product have the most to do with determining the market structure. There are four defined market types. The first market structure is called the perfectly competitive market. The second market is called a monopoly market structure. The third market is called monopolistic competition market structure. The final market is called oligopoly market structure. Each market structure is different and both benefits and disadvantages
Explain the most important characteristic in perfect competition, monopolistic competition, oligopoly, and monopolies and relate the characteristic to how these firms can make profits in the short run. In your analysis, make sure to relate an example for each of the market structures listed and how it relates to the particular characteristics.
The two graphs attached explain the costs of the considered firm and the general market for the good or service. The store may want to stay open, continuing to produce goods, if the variable costs of producing additional goods can be covered by the price. Another potential option the company is to temporarily shut down operations. On the market graph, if prices for the general market were at the Q1 level and were predicted to increase to the Q2 price later, this would cause an increase profits from producing goods,then it could be beneficial to simply incur the losses in the short-run and stay in business. Either of these are viable options if the increase in cost or temporarily shrinkage of profits are temporary. The reason being that the company could possibly bounce back from the shrinkage of profits. If the increase in costs and reduction in profits is not temporary, then the best option for the company is to go out of business and sell their assets.
Since there are so many producers in a perfect competition market, consumers are able to be price makers and there is ample opportunity for firms to compete for their business. Consider the below graph depicting the natural efficient price equilibrium and the firm’s optimal output in the short run. The market may demand a quantity of a product where the usual efficient market would consume at the marginal revenue= marginal cost (MR=MC)
Using the virtual organization of Kudler Fine Foods, evaluations will be made to determine market structure and competitiveness. Kudler Fine Foods current strategic plan for 2003, marketing overview, and market surveys will provide information to evaluate how Kudler competes in its market and where its strengths and weaknesses are located. Based on the evaluation of Kudler Fine Foods an applicable market structure will be determined and the structures effects on the organization and its long-term profitability. Recommendations will be made for Kudler Fine Foods while comparing real-world organizations.
A corporations is very different from sole proprietorships and partnerships. Corporations are owned by shareholders and are considered to be an independent legal entity. Corporations have very expensive administration fees and very complex tax and legal requirements. The main advantage of corporations is that the shareholders are not responsible for the debts of the company. They are only liable for their investment into the company. Corporations can also sell stock to raise any capital that is needed for the business. Corporations file a separate taxes from that of the owners. Owners of a corporation are taxes on the profits that the receive through salaries, dividends and bonuses. One major disadvantage of a corporation is that they are very costly and time consuming to start and maintain. Sometimes corporations can be subjected to double taxes through taxes on profits and then taxes on dividends. Corporations require an increased amount of paperwork and record keeping. A final disadvantage of this kind of business structure is that the business operations are handled by the managers and the board of directors who can cheat the owners of the business (Parrino et al., 2012).
As the company is making short-run profits, new companies will enter into the market. Demand for input factors will increase. Thomas and Maurice tell us that “When a market is characterized by a large number of small producers, the demand curve facing the manager of each individual company is horizontal at the price determined by the market” (2008, p. 402). So, inputs will become costlier for increasing-cost industry. We can say that costs of production will increase. The company’s
•Monopolistic competition- When an industry contains many rival firms, each of which has a comparable but at least slightly different product. Restaurants, are an example, all serve food but of different types of food and in different sites. Manufacture costs are above what could be attained if firms sold equal products, but consumers have an advantage from the variety.
2.The most vital factors which caused change in market structure are the changes in customer tastes and customer income. These two factors are solely related with the demand and needs. When the customers start earning more, they will have a tendency to purchase more and expensive products. Their buying ability is increased in such a situation. On the other hand, when the income of the customers is not that high, they will not have that much interest on purchasing the expensive products or purchasing products in large amounts. That means the size of sales revenue for a particular company is totally dependent on the customers purchasing abilities. The other factor, the customer taste, is something that should be considered as well. If the customers like a particular product, they are more likely to purchase that particular product even if that product is a bit expensive. On the other hand they will not be interested to purchase something which they don’t like even if that product is quite cheap. The first factor can’t be controlled by the company. The second one can slightly be controlled. The company should design the products and make its pricing strategy by considering these two factors if they want to make a customer
The marketing segmentation concept allows a company to focus on a specific group of customers that it is best prepared and suited to satisfy. Rather than trying to be all things to all people, selecting a target market enables a company to tailor its offerings to more specific customer needs and preferences (Schewe & Hiam, 1998, p. 200). When a company focuses its efforts and capital (both tangible and intangible) on a more narrowly defined set of needs, it is more likely that the customers will get the product they desire. Companies that use the marketing segmentation concept typically have a more intimate knowledge of the customers they target, and customers usually relate better with companies that understand their interests. As such a relationship is built.