International Marketing : “A Low Per Capita Income will render the Market Useless”

International Marketing

“A Low Per Capita Income will render the Market Useless”

Introduction

The low per-capita incomes are the meaning for the people who don’t have lots of money in spending for the goods and services which are not essential. This implies that the market of the luxury goods and services are seen for having the falling demand and have the cut of supply also which can lead to the declination of the market. Nevertheless, there are still analyst that says that even most of the low per capita income countries can still have to afford the goods and tools on agricultural tools (Boone and Kurtz, 2005, p.227). This is the never ended debate that international marketing is facing regarding the low per capita income places.

 

The Low Per Capita Income will Render the Market Useless

            The nation which has the low per capita income will be have the poor market in the expensive and industrialized machinery whereas they cannot afford to have the technical equipment which can powers the industrialized society. This can reflect to the reality that the low per capita income simple means of having the lower purchasing power or the power consumer spending. This can also limits the market size in every market and in every product which is generally low price and the goods have low value additions. This low price market which has the limited product absorption and low market size is known to be unattractive in the international market procedure in location of the plants in the countries which has the low per capita income by selling the product there. This can presumably sell their products and manufactured elsewhere on the mass scale elsewhere and to the part of the products which can be sold into the pricing basis of marginal cost to the countries having low per capita income. In addition, the low per capita countries cannot have the potential market for the goods and services of air conditioners and automobiles wherein these are basic necessities for the developed countries due to the fact that luxuries to the other countries (Ajami, R et. al, 2006, p. 157).

For international companies, the markets having the low per capita income are unattractive in general and therefore close to useless. Nevertheless, this needs to explore these markets and to the enter in them if they can find that the growth rate for the income to some of the low per capita income countries can be rising more steadily. The other international producers are also starting to enter in the markets in the smaller ways in gathering for the ideas so that they cam be ready to benefit faster in that said growth of the market (Pasinetti, 1993, p. 157).

            The other reason behind the statement is the fact that the low per capita income cannot be useless because the market can operate and can still exist regardless of the income of the consumers. Furthermore, the job market can also improve the companies which can realize the affordability of the areas in retaining and hiring the employees due to its lower labor costs (Albaum, et. al., 2004, p. 103).

Since, majority of the consumer goods, the per capital income of the country is a good indicator for the ability of the market in paying indirectly for the elasticity demand of the product. On the contrary, some of the stylish products can have the strong demand whereas the low per capita income is not a hindrance and cannot discourage the business. Taking the example of Levi’s 501 jeans wherein it had recorded the international worldwide success which indicates that the high price of goods can also succeed in the countries of having the low per capita income. This in fact can have the possibility for the products for higher prices can push forward for the rise of the demand (Onkvisit and Shaw, 2004, p. 477).

Generally, despite the fact that wealthier countries can have to offer the prime markets for the industries of US as in the industrial products of consumer’s goods and services. It is still presume that the useless for the group of consumers can convinced to buy the wanted or usable products due to the people are using the entire income in buying the necessities of life which seems they are useless when the basis as customer. Therefore, this statement can only be true for the low income people wherein they cannot afford to buy luxuries. Nevertheless, even the poorest countries can still have the ability in flourishing the market for the purpose of life’s basic necessities.

 

 

 Bibliography

Albaum, G et. al 2004, International Marketing and Export Management, Prentice Hall, United States.

Ajami, R et. al., 2006, International Business: Theory and Practice, Sharpe, Europe.

Boone, L and Kurtz, D 2005, Contemporary Marketing, Thomson South-Western, United Kingdom.

Onkvisit, S and Shaw, J 2004, International Marketing: Analysis and Strategy, Routledge, London.

Pasinetti, L 1993, Structural Economics Dynamics: A Theory of Economic Consequences of Human Learning, Cambridge University Press, United Kingdom.