View more random threads:
- Mgt301 GDB No. 1 solution fall 2010 November 6
- CS302 GDB fall january full solution 2012
- STA630 Research Methods GDB no 1 fall spring fall 14...
- MGT613 GDB National Furniture Company (NFC) is the...
- MGT502 Organizational Behaviour GDB No. 01 Solution Fall...
- MGT501 Human Resource Management GDB NO.1 Solution Fall...
- GDB MGT501 Solution 11 May 2010
- MGT111 Introduction to Public Administration GDB No.2...
- MGMT611 Human Relations GDB solution spring 2011
- MKT630 International Marketing GDB No.1 December 2014...
Eco402 – Micro Economics GDB 2
Question:
Sponsored Links
“The producer of processed foods and related consumer goods often issue coupons that let consumers buy products at discounts. These coupons are distributed as a part of advertisement and they may appear in newspapers or magazines etc. For example a coupon for a particular breakfast cereal might be worth Rs. 15 towards the purchase of a box of the cereal. Sending out coupons allows the sellers to separate market segments with different degrees of consumer brand loyalty”.
What will be the effect of issuing coupons, on market competition and profit
margin of a seller?
Solution:
Market Competition will be tough and profit margin of a seller will decrease.
Explanation (Not Required)
As such coupons will increase the advertisement cost, selling cost, this will definitely increase the cost price of product, which means that the sellers who are not issuing such coupons will have low cost and will get more benefit due to low cost. Therefore, the sellers who are issuing such coupons can not increase their cost, but this act will increase their total revenue (Because of increase in number of customers/ number of sales). As they (who are issuing such coupons) will not increase their cost due to competition, their profit margin will decrease, but their product output will increase because of advertisement. This will cause the
market competition tough/ strong among competitors/ sellers of the product
:o:o--------------------------------------------------------------------------------------:o:o
[B]The more knowledge you have, the greater will be your fear of Allah.[/B]
Please Join My [B]Group Vuhelp[/B][B], Birthday Wishing, Daily Hadees[/B] [CODE][B]http://vuhelp.net/groups/vuhelp.html[/B]
[B]http://vuhelp.net/groups/birthday-wishing.html[/B]
[B]http://vuhelp.net/groups/daily-hadees.html[/B][/CODE]
[CENTER][B][COLOR="Red"][SIZE="4"]Email: [email]viki@vuhelp.net[/email][/SIZE][/COLOR][/B][/CENTER]
There are currently 1 users browsing this thread. (0 members and 1 guests)