Understanding the Market

It is a geographic zone where demand and supply offered , at a specific location , is expressed. • It is a place where people are likely to purchase a firm’s goods and services.

• In a computer system servicing business, a market area refers to the location from which it draws its customers. • In the analysis of the market for a computer system servicing business, market size and the level of competition must be taken into consideration.

• Market Area

• Market Threshold

• Market Range

• Demand

• It is the minimum demand (number of people) necessary to support an economic activity, such as computer system servicing. • An entrepreneur who plans to put up a computer system servicing business should consider whether the minimum demand for his services will support and sustain his business in the long run.

• Market Area

• Market Threshold

• Market Range

• Demand

• It is the maximum distance each unit of demand is willing to travel to reach a service, or the maximum distance a product can be brought to a customer. • To be profitable, a market must have a range higher than its threshold. • The number of customers seeking computer system servicing or computer products, must be higher than the minimum number of customers necessary for the business to thrive.

• Market Area

• Market Threshold

• Market Range

• Demand

• It is an economic principle referring to the goods or services that the consumers are willing to purchase or avail of at a given price. • The _____ is high if the price of the commodity is low in relation to its usefulness; it would be low if the price is high.

• Market Area

• Market Threshold

• Market Range

• Demand

• The demand for items deemed of lesser _____, such as computer units, their parts, and their servicing would vary according to income and economic cycles. • For a computer shop business to succeed, it must be located where the demand for purchasing computer units or availing systems servicing is high.

• • Utility

• • Income Level

• • Inflation

• • Taxation

• • Savings

• _____ is directly proportional with consumption. • A population with a high _____ _____ has much more purchasing power than a population with low _____. • Choose a population whose disposable _____ is easy to come by.

• • Utility

• • Income Level

• • Inflation

• • Taxation

• • Savings

• It is the increase in prices of goods and services over time. • It reduces a consumer’s purchasing power if wages do not increase accordingly.

• • Utility

• • Income Level

• • Inflation

• • Taxation

• • Savings

• Sale and value added taxes add to the production cost and claim a share of the consumer’s income. • Consequently, it affects the sales of goods and services.

• • Utility

• • Income Level

• • Inflation

• • Taxation

• • Savings

• In periods of economic crisis, people may refrain from buying computer products if saving is a priority.

• • Utility

• • Income Level

• • Inflation

• • Taxation

• • Savings

It is the total amount of specific goods or services that firms or individuals are able to produce and are available for purchase at a specified price.

• Supply

• Profit

• Competition

• Market coverage

• Range expansion