Economics concepts
used in flipkart
Economies of
scale- As flipkart
is producing higher quantity of products so that it can absorb the average cost
faster which result in lower cost. This will maximize the profit of the company
as the difference between the cost and revenue increases.
Economies
of scope- Using internet
as the only platform they are reducing their fixed cost as they are using only
internet to sell their product so, in short they are using one input to produce
variety of outputs.
Price discrimination
by self-selection- Flipkart
obeys the practice of progressive procession as it is complex, data-driven
method. The goal of progressive pricing is to adjust prices according to the response
to the demand in the market for maximizing the profits. In flipkart, we see
that the same product will be sold by multiple sellers and the price is
different based on the seller which you select while placing an order.
Product differentiation- As flipkart
and Amazon are the leaders in this sector. They form a strong brand in the eyes
of the consumers. The power of the brands creates barriers for other companies to
enter into the market.
People respond
to incentives- They
sell goods at low price nearly less than MRP, where in the offline market we
need to buy at MRP. So, automatically people respond to the incentives of
discounts which is like a reward for the consumers.
No comments:
Post a Comment