Market Power Dynamics: The Customer as Sovereign

It is common sense that companies involved in production are, to a certain extent, held to ransom by the consumer. Perhaps that is too harsh a way to put it; however, we are all aware of the fact that it is the power of consumers to decide what gets produced. If consumers aren't buying a product, then there is indeed no longer a need for its production. Consumer sovereignty asserts the rule of purchasers in markets as to the production of stock. It can surely be said that a business that does not acknowledge and respect the end purpose of what they work to achieve, that is, to have the consumer purchase their product, then their company will not find itself succeeding in the market place.

It is often the trend that a product will be initially quite popular, but has later on decreased in said popularity. We can all name at least one or two commodities that were once the ultimate must-have items but are now practically extinct. To name but one instance, the recent increase in environmentally conscious individuals has meant that more people are refraining from buying big, gas-guzzling vehicles and opting for smaller more environmentally friendly cars. The Toyota Prius has indeed been the car to be driving in the last year or two. Similarly, people have become more aware of what is being put into their food, thus, the organic food market is now worth billions every year.

And to be sure, there will come a time when the sales of these popular markets will decrease. Organic food sales are already on the decrease due to the global recession as families attempt to save on their grocery bills. Company formation must take into account how fickle consumerism can be. Such companies might consider what products are not subject to this kind of popularity contest and endeavour to aim their production at goods that will not be susceptible to disposal.



Lorraine McInerney is currently working as a Freelance Web Content Article Writer. She has an Arts Degree in English Literature and Ancient Classics, and she is currently a post-graduate student of English, specializing in Post-Colonial Literatures. She will be writing her thesis this summer on "Liminality in Post-Colonial Women's Writing".