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Marketing Dynamics

In a market like today’s, it can be challenging for businesses to gain a solid footing against the volatile changes in consumer tastes. It can be even more challenging to assimilate instantaneous data influx in a rapidly dynamic market, which is exactly why you don’t have to worry about that anymore. Here at Rightspend, we pull together real-time marketing data to present you with exceptional understanding of current market dynamics, fees, and staffing patterns. And that’s not all! Our detailed marketing analytics reports break down the essentials of prevalent marketing dynamics to help you drive down marketing costs and achieve the most cost-effective negotiations with your vendors and partnering agencies.

Our information sources span over 75 global markets, so you can be sure your dynamics data is all-inclusive and very thorough. The Rightspend marketing database is tailored exclusively to the industry, allowing you to make sense of in-practice contracts, and construct your business proposals accordingly.

 

What Are Marketing Dynamics?

They are the marketing forces that influence the economic behaviour of both producers and consumers, inevitably leading to variations in price points. How? As the supply and demand curves for a specific product or service fluctuate, the result is what is known as pricing signals. These pricing signals are not only a byproduct of a fluid supply-demand curve, but also of human emotions. Though it is not necessarily a phenomenon that is captured on marketing graphs, emotionality can dramatically influence the changeable and volatile marketplace.

These dynamics are exactly what policy-making administrations manipulate in order to reshape national economy. They stimulate questions such as whether to increase wages, or perhaps decrease taxes. Policymakers are directed towards the most effective fiscal tools to achieve the optimum economy, informed by the constant volatility of the supply-demand marketing curves. The power of these dynamics cannot be denied, as they have the ability to impact any market or industry, even governmental policies.

 

Understanding Marketing Dynamics

Dynamics are essentially valuable financial tools in the hands of policy-making bodies, as they allow greater visibility and transparency of current marketing trends, and they provide greater insight into various aspects of the economic arena. For instance, should wages be above a certain setpoint? Should taxes be raised or lowered according to the current numbers at our fingertips? The ultimate goal is to adapt the nation’s economy to the shifting nature of the supply-demand curve, to ensure that it remains buoyed over a certain threshold, based on prevalent figures.

Such dynamics are the foundation of many economic models and theories. However, there appears to be two schools of thought about the source of true economic growth. The first believes that it stems from the supply side of dynamics, while the other claims that impactful change to the market is achieved through manipulating the dynamics’ demand side.

 

Dynamics of Supply Side Economics

Supply-side dynamics, better coined as “Reaganomics” or “trickle-down economics”, were brought to fame by Ronald Reagan, the 40th president of the United States. They are built on three primary pillars that ultimately affect the supply stream pouring into the market. In brief, these consist of tax policy, regulatory policy, and monetary policy. Reagan was an advocate of tax cuts and financial incentives targeted towards business owners and companies. His perspective on these dynamics entailed reducing taxes on the one hand, and providing monetary incentives on the other, to investors and manufacturing companies, to galvanize them into pouring more products into the market, thus stimulating economic growth.

This would invoke a sort of chain reaction, such that the benefits resulting from increased supply would subsequently trickle down into other areas of the economy (such as creating more job opportunities), hence the name “trickle-down economics”. This phenomenon serves as an economic catalyst, as it leads to changes further down the production line and leaves an overall positive impact on national economy.

This lies in direct opposition to Keynesian dynamics, which dictate that even if more goods make their way into a market, demand can still decrease. In that case, the government would be forced to intercede by providing fiscal support and monetary encouragement, in order for demand to pick up once again and dynamics to restore equilibrium.

 

Dynamics of Demand Side Economics

On the other end of the spectrum lie demand side economics. Proponents of this theory contend that it is consumer purchases and their demand for a certain good or service that ultimately reflects the state of an economy. In their eyes, long-lasting and deliberate economic advancement derives from the improvement of the demand curve. The rise of demand translates into increased consumer spending, inciting a flourishing cycle of business growth and higher employment rates.

The basic premise is that the more customers spend, the larger corporations can grow, allowing them to take on a surge of new employees. This in turn increases purchasing power and cycles back into increasing total aggregate demand.

Demand side dynamics acknowledge the fact that reducing taxes can stimulate greater rates of recruitment, transforming trends of unemployment into ones of employment and productivity. However, it remains to be seen whether taxes imposed on the wealthy could dramatically influence market values or affect the economy. In fact, the previously unavailable funds could eventually be invested in the purchase of stocks, instead of upgrading the business itself,  thus creating no tangible change in the state of the economy.

Another point of discussion argued by this school is that the more governments spend, the more jobs they can generate. This is what leaves lasting economic change. The resultant economic surge, parallel to the Great Depression of the 1930’s, is greater than what would be accomplished by simply implementing tax cuts. 

 

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Dynamics of Securities Markets

Markets differ when it comes to how easy they are to quantify. Though some marketing variables are simple enough to plug into economic models, others defy quantifiability, mainly those of financial markets.

Markets bartering material goods are often clear-cut, since almost all the variables can be accounted for. Contenders in this market can be forecasted to carry out rational decisions for themselves and their customers. This is not the case for financial markets, that have to factor in the changeability of human sentiment. This element is a major player in the fluctuation of price signals, and usually makes financial markets all the more turbulent. For the most part, professionals in these markets can likewise utilize rationality in their decision-making, as they base their operations on experience, tried-and-tested methods, and detailed analysis reporting. However, this cannot be said for all of them. There are many individuals with insufficient knowledge in their field who are fuelled by greed or ambitions to make quick cash. Consequently, dynamics are modified and market volatility goes up.

Market-savvy traders develop very strategic systems of operation. They evaluate every risk associated with a single investment, and consider different channels of exit, should the investment go awry. They base their decision-making on already substantiated techniques and carry out their trade activities as planned. They rarely digress from this business scheme once they have begun, and do not allow emotion to dictate their choices. Rigorous tracking of funds naturally occurs with every step. On the other end of the professional spectrum are the novice investors and unseasoned traders, whose preliminary successes usually give rise to an unpleasant emotion: greed.

Once profits are made, these amateurs usually let greed steer their decision making. Even when presented with otherwise negative signs, they may recklessly turn a blind eye to these signals, causing them to lose profits, or stubbornly stick to a bad investment. Here, another emotion enters the playing field: fear. It is important to draw attention to the fact that these emotional variables cannot be translated into numerical characters, thus rendering it difficult to incorporate them into traditional economic models. Nevertheless, their presence is very powerful and reflects on the dynamics of the market.

 

Market Dynamics in Economic Models

Marketing dynamics are an umbrella for foundational economic concepts: customer, manufacturer, supply-demand, and price. This is exactly why these dynamics have come to lay the groundwork for many renowned economic models and theories attempting to quantify today’s markets. The two primary models in the spotlight today are the supply-side model and the demand-side model.

 

How Does It Work?

The constantly shifting relationship between supply and demand is the foundation for modern macroeconomics. The basic principle is that as one changes, a corresponding shift takes place in the other. Their constant interplay is what decides the final price of a product or service, via pricing signals.

Take the following example: If there is a sudden increase in demand for product (A), manufacturers would be obliged to hike up production to meet consumer demand, thus displacing the price upwards. Over time, demand would decrease, and the price would eventually return to its initial value, as the two curves regain stability.

Why is it important to learn how to navigate the dynamics of these changing marketing curves? Well, marketing research shows that customers today are willing to spend more and more money on products. As a result, brands are constructing exclusive corners of the market as they cleverly interpret demographics and tastes of prospective shoppers.

In brief, competition is growing exponentially, and the industry is becoming increasingly more cut-throat. Moreover, this information is the gatekeeper to potentially raising prices that elevate overall economic health. As demand increases, especially for more niche or coveted items, companies have the rare opportunity to charge more for their goods. Simply put, analyzing these dynamics correctly can translate into big earnings for your brand, if executed the right way.

 

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Causes of Market Dynamics

As customers, businesses, and policymakers interact, they give rise to what is ultimately known as market dynamics. The give-and-take that occurs among these three marketing parties introduces changes to the supply and demand curves of any economy. As mentioned previously, emotionality of the human participants is also a decider of resultant price signals and marketing changeability. In total, there are 6 main dynamics pillars.

The first is the customer, who has a certain need that needs to be fulfilled by a product or service. Brands must be able to provide a satisfactory solution to this need and compete with other brands for the customer’s attention. The second is the product, naturally. It has to be of good quality to draw the potential customer’s eye, and it has to be capable of meeting their desire. Here, it is crucial to understand that each product leaves a lasting impression in the customer’s mind, thus influencing their future purchasing decisions.

Next is timing. The market is a variable landscape of customer needs; what is possible at what time may not adapt so well at another. Then comes competition, where brands have to establish themselves in an already saturated marketplace. Fifth is finance, i.e. the capital resources required to run businesses and produce goods, plus the revenue from sales. And finally is the team, a cohesive unit that produces results effective enough to permit competition with similar brands.

 

Effects of Market Dynamics

As manufacturers gain insight into how consumers react to products on a dynamic market, they begin to identify the effectiveness of certain marketing techniques, versus the futility of others. Suddenly, they can know what product to put on the market, at what time, and at what price point to make it available.

All this is certainly valuable knowledge for a corporation whose ultimate goal is profit with simultaneous reduction of costs. Comprehensive understanding of these potent dynamics is also a requirement of effective government policy: policymakers can pinpoint which marketing areas need correction, in order to stabilize an economy or even end a recession.

 

Contact the Marketing Dynamics Specialists

No matter your business scheme, having a good grasp of the principles of marketing dynamics is an absolute must, in order to determine what points of production you can improve, and eventually engineer your marketing operations to achieve the highest levels of growth. Rightspend’s state-of-the-art software presents your team with actionable dynamics data on a silver platter, allowing you to zero in on the variables creating the most impact on your production.

Don’t hesitate to get in touch right now and request a demo for our leading marketing services. Feel free to leave your personal information by completing the contact form on our webpage, and our team of marketing experts will get back to you as soon as they can. Don’t miss out on the chance to refine your marketing plan and take your business to new heights! Join Rightspend, and fall in love with our easy-to-use, all-in-one platform!