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Shifts in Gdp

In: Business and Management

Submitted By cinetube
Words 470
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Question: Shifts in G.D.P

Is it possible for an economy to experience economic growth as measured by total G.D.P. without a commensurate rise in the standard of living? How might this affect a marketing strategy in an emerging market?

Answer:

Gross domestic product is the total of economic output of a country. But GDP figure does not indicate the distribution of wealth. It may happen that very small percentage of the population may control significant share of wealth, which actually depicts the prevailing condition of most underdeveloped and developing countries. GDP of economies increase due to inputs from so many sectors of the economy while per capita GDP is based on certain consumer sector and inclusive monetary policy, employment and savings and real income generation .Though the GDP has been increasing it may not be the same for per capita because there could be less disposable income in the hands of people, unless people have income to spend. Thus, though the economy may expand and the GDP increase greatly, the largest percentage of the population may not experience a commensurate rise in their standard of living. There is also the problem of population growth. Though total domestic income may greatly increase, the average per capita GDP will decline if population growth is extremely high. Marketing strategy must be tailored to suit a particular emerging market. A marketer cannot take initiatives and introduce a state-of-the-art marketing system on a developing country or economy. Marketing efforts must match to each situation and made for each set of circumstances. A sales promotion campaign for a population that is 50 per cent illiterate is vastly different from a program for a population that is 95 per cent literate. Pricing in a market where goods produced are insufficient poses different problems from pricing in a surplus situation. An efficient...

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