Use the principles of economics why famous brands don t cut prices

Famous brands are luxury goods, and the elasticity of demand is greater than 1, that is, when consumers' income increases, they will increase their consumption. The power of consumer consumption comes from the utility that the goods bring to consumers, and the utility satisfaction brought by famous brands to consumers is different, which represents the quality, taste and status of the brand, so that the consumers have a strong sense of satisfaction. This kind of satisfaction is incomparable to the utility brought by the commodity itself, and this satisfaction that marks the status is extremely high, if it declines, the pursuit of luxury consumers will reduce this satisfaction, and then reduce consumption.

Because for consumers of luxury goods, the propensity to spend is very high, and the utility of money for them is lower than the utility brought by satisfaction.

1. It has built the brand into a famous brand, and in view of its popularity among consumers and the grade of its own brand, it will not easily reduce the price.

2. The reason why famous brands are famous should be related to many factors such as high quality, thoughtful service, and good reputation, and their own value determines that there will be no large fluctuations.

3. The audience of famous brands is also better than the audience of ordinary goods, and the consumption level, purchasing power level, and consumption tendency of those people are not elastic compared with ordinary people, even if there is a financial crisis, they will not lose their original purchasing power.

Branding. As the name suggests: the effect brought by the brand for the enterprise, he is the continuation of the value of the enterprise in the business society, in the current brand-led business model, the brand means the product positioning, business model, consumer groups and profit returns.

Establishing a corporate brand requires an enterprise to have a strong ability to integrate resources and show the essential side of the enterprise to the world through the brand. Establishment methods: Advertising, public relations, daily marketing, and after-sales pre-sales services all have a direct impact on brand building.

Brand effect is the use of the brand on the product, the benefits and influence brought to the users of the brand, is the role of the brand use. Brand is the product of the development of commodity economy to a certain class, the initial use of the brand is to make the product easy to identify, the rapid development of the brand, is produced under the highly developed conditions of modern and modern commodity economy, and its rapid development lies in the fact that the use of the brand has brought huge economic and social benefits to the producers of the goods. It is in this context that the brand effect is valued by enterprises all over the world.

First, the brand can protect the interests of producers and operators.

Second, brand is an effective means of promotion.

Third, brands can help consumers identify and choose products.

Fourth, brand effect is an effective way to establish corporate image.

Fifth, the brand effect is the benefit enjoyed by the product operator due to the use of the brand.

Commodities are the unity of use value and value, due to the famous brand of goods, high reputation, large use value, so it is convenient to realize the value. The value determines **, ** is the monetary expression of the value of the commodity, so brand-name goods have a higher **. At the same time, the relationship between supply and demand affects the best brand-name goods for consumer recognition, and has a greater competitive advantage in similar products, making it high.

On a micro level, a decline in product ** indicates that the product is in excess of demand. The reason for this is the increase in supply (for example, the main reason for the sharp decline in the number of mobile phones compared to ten years ago is the increase in the supply of mobile phones due to the development of technology) or the decrease in demand (such as down jackets discounted in the spring).

On the macro level, a decline in all commodities indicates a decline in the level of the product market. The reason for this is the adoption of contractionary monetary policy or contractionary fiscal policy. Contractionary monetary policy will reduce the money supply and reduce the level.

Contractionary fiscal policy will lead to a decline in aggregate social demand, leading to a decline in the level of **.

If the price of goods is not reduced from the perspective of economic principles, it is necessary to consider the profit of the manufacturer, under the premise of regardless of the cost, that is, the main consideration of the product of ** and the number of sales represents the income, whether the merchant chooses to reduce the price or not to reduce the price is to improve the income, at this time is to consider the elasticity of demand, when the elasticity is greater than one, the price reduction can gain, and when the elasticity is less than one, the price reduction will reduce the total income.

This is a ......... of questions

Let's talk about one of the principles: rational people face trade-offs.

Commodity storage requires costs, and the price of goods that have not yet been sold can be accelerated as soon as possible. The costs (including opportunity costs) that would otherwise be spent on storage are reduced. That is, if the loss of the markdown is less than your storage cost (including opportunity cost), then the markdown is okay.

That's simple enough.

As for why some goods are rarely reduced in price.........To see what kind of product it is, tap water and soft drink are two different products......It's a bit hard to put into words. If it is a general product......I recommend you to watch "Grotesque Behavior", and you will naturally understand.

Hope it helps, I'm just a noob to economics, haha.

The study of economics must be quantified, otherwise it will not be possible to verify whether it is right or wrong. And then you're not economists who pay special attention to it, but consumers who care most about it. It will be found that it is both quantified and universal, and can be compared horizontally, only ** is an economic phenomenon, **contains almost all information such as technology, demand, competition, etc., and the most important thing is to explain the trend of resource allocation, and resource allocation is the core content of economic celestial trace Acquisition factors to compete, ** is the best competition rules.

**Reflect the value, comprehensively reflect the value of products and elements to the demander. **More differences between products than other attributes can explain. To make a PCA for all products in a market, the first vector should be about the same as **.

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Goal Optimization! The goal of our decision-making is optimization, i.e., how to achieve the set goal at the least cost (or, when the given cost, how to maximize the goal), in other words, how to allocate resources effectively. The role of **.

In the neoclassical economic environment of pure exchange, the market mechanism is the least information-required and the only one of all the mechanisms that can achieve Pareto optimality, and information is cost-effective. Therefore, it can be said that under a series of assumptions, the market mechanism is the optimal mechanism for achieving Pareto. It is the core of the market mechanism and reflects all the information of the market.

In reality, there is no such thing as an absolute market economy or an absolute planned economy, and the economic systems of all countries are a combination of the two. The world's major economies use the market as the main means of allocating resource allocation. In this realistic environment, it is determined that the theory related to the market economy has strong practicability.

Theoretical level. The classical theory of economic manuscript is the theoretical framework of economic research. The assumptions of classical economics have been relaxed, and the follow-up economic research that has been initiated has relied heavily on classical economic theories.

In classical economic theory, it is the core of the market mechanism, which reflects all the information in the market. Therefore, the study of economics also attaches great importance to **.

Commodities have a variety of attributes and can be used to meet a variety of specific consumer or production needs. This is the use value of the commodity. The use value of commodities is naturally worth studying, and has a particularly important position in specific production and operation, which is usually the work of engineers, entrepreneurs, etc.

But this is not the main concern of economics. This is partly because the use value of commodities involves almost everything from the natural sciences to psychology, and economists often do not have the expertise to do so. The more important reason, however, is that economists are granted the right to study another, equally important issue.

That is, the exchange of commodities, and the division of labor and cooperation between people based on the exchange of commodities. Therefore, economics is, first and foremost, a social science. As already analysed, commodities have very different use values and are therefore heterogeneous.

But how can undesirable commodities be exchanged in a certain proportion? This is because these disparate commodities are the same in one thing that they all consume a certain amount of human labor. Therefore, in a competitive market, the proportion of exchange of commodities is detached from the contingency and subjectivity of its individual level, and is determined by the socially necessary labor time implied by it.

Thus when I exchange the commodities I produce with the commodities you produce, I have a division of labor and cooperation with you in production: I have exchanged a part of my productive labour with a part of your productive labour, and thus I and you have jointly produced the necessities of my life and yours. Therefore, it is precisely because of the extensive division of labor and cooperation that the commodity economy has prospered.

We have found that behind every commodity is the labor time of others, and if we admit that people are essentially equal, then what is represented behind the commodity is the crystallization of human undifferentiated labor, that is, the value of the commodity.

The study of economics must be quantified, otherwise it will not be possible to verify whether it is right or wrong. And then you're not the economists who pay special attention to **, but the consumers who care the most**. It will be found that it is both quantitative and universal, and can be compared horizontally, only ** is an economic phenomenon, **contains almost all information such as technology, demand, competition, etc., and the most important thing is to explain the trend of resource allocation, resource allocation is the core content of economics to obtain elements to compete, ** is the best competition Xi Pai Chang rule.

** The value of the body is realized, and the value of products and factors to the demanders is comprehensively reflected. **There are more differences between the congratulations and the destruction of the product than other attributes can explain. To make a PCA for all products in a market, the first vector should be about the same as **.