market power

Examples of market power in the following topics:

• Market Power

  • Market power is a measure of the economic strength of a firm.
  • A firm usually has market power by virtue of controlling a large portion of the market.
  • However, market size alone is not the only indicator of market power.
  • Other factors that affect a firm's market power include:
  • A firm's market power influences its behavior.

• Introduction to Firms with "Market Power"

  • The existence of market power is tied to the demand conditions the firm faces.
  • Market power is the ability to have some control over the price of the good offered for sale.
  • The conditions of entry or barriers to entry (BTE) are also important determinants of market power.
  • Monopoly is the market structure that is usually associated with the greatest market power.
  • Firms in monopolistic competition or imperfectly competitive markets are more likely to have limited market power because there are many firms with differentiated products (there are substitutes) and there is relative ease of entry and exit into the market.

• Demand Curve

  • The demand curve in a monopolistic competitive market slopes downward, which has several important implications for firms in this market.
  • This is due to the fact that firms have market power: they can raise prices without losing all of their customers.
  • The source of the market power is that there are comparatively fewer competitors than in a competitive market, so businesses focus on product differentiation, or differences unrelated to price.
  • Because the individual firm's demand curve is downward sloping, reflecting market power, the price these firms will charge will exceed their marginal costs.
  • As a result, the market will suffer deadweight loss.

• Characteristics of Pure Competition

  • The idealized purely competitive market insures that no buyer or seller has any market power or ability to influence the price.
  • The sellers in a purely competitive market are price takers.
  • The conditions that ensure no seller has any market pose are:
  • Sellers cannot charge a price above the market price because sellers see all other goods in the market as perfect substitutes.
  • They can buy those goods at the market price.

• Market Supply

  • Market supply is the summation of the individual supply curves within a specific market where the market is characterized as being perfectly competitive.
  • Market supply is the summation of the individual supply curves within a specific market.
  • In combination with market demand, the market supply curve is requisite for determining the market equilibrium price and quantity.
  • " If a firm has market power, its decision of how much output to provide to the market influences the market price, then the firm is not "faced with" any price, and the question is meaningless.
  • Therefore, production in the market is a sliding scale dependent on price.

• Calculating Market Share

  • Unit market share (%) = 100 * Unit sales(#) / Total Market Unit Sales(#)
  • However, market share is not a perfect proxy of market dominance.
  • Although there is no set relationship between dominance and market share, the following are general criteria: A company, brand, product, or service that has a combined market share exceeding 60% most probably has market power and market dominance.
  • The higher the concentration ratio, the greater the market power of the leading firms.
  • Decreases in the Herfindahl index indicate a loss of pricing power and an increase in competition, and vice versa.

• The role of marketing in the firm: a basis for classification

  • The role of marketing in the firm: a basis for classification
  • Marketing is an individualized and highly creative process.
  • Despite the availability of high-powered computers and sophisticated software capable of analyzing massive amounts of data, marketing is still more of an art rather than a science.
  • Consequently, no two marketing strategies are exactly the same.
  • This requirement of marketing to play slightly different roles, depending upon some set of situational criteria, has in turn provided us with a division of marketing into a number of different categories.

• Marketing Innovation Trends

  • Innovation trends in marketing include mobile marketing, viral marketing, and more efficient usage of branding and targeting.
  • Mobile marketing is marketing on or with a mobile device.
  • As such, they represent a very powerful tool for initiating consumer engagement at the time when the marketing piece is likely triggering its most emotional response.
  • Their potential for tracking offline sources and delivering the types of analytics previously reserved for online tracking makes another powerful reason that marketers are flocking to QR codes in droves.
  • In a world where everything is social and shared, the consumer has a lot of power.

• What Are Markets

  • Markets are a group of potential buyers with needs and wants and the purchasing power to satisfy them.
  • A basic definition of a market is a group of potential buyers with needs and wants and the purchasing power to satisfy them.
  • International markets, American markets, a shopping center, and even the site of a single retail store can be called a market.
  • The terms buyer's market and seller's market describe different conditions of bargaining strength.
  • The primary types of markets are consumer markets, industrial markets, institutional markets, and reseller markets.

• Advantages of a Marketing Plan

  • A marketing plan helps remove the fog and barriers to vision.
  • Marketing plans help organizations to:
  • Thus, a marketing plan can serve as a rallying point for employees.
  • You will grow to appreciate the power of planning because it can make your business life much more profitable.
  • The marketing plan, which is a written document, does the job.