Unique and interchangeable goods

Each person at purchases not once selected from different, but equally necessary things more cheap. This is the interchangeable goods. Let us give them a scientific definition.

Interchangeable goods are substitutes characterized by the fact that an increase in the price of one of the substitutes causes an increase in demand for another substitute.

In simple terms, the product, the price of which has risen, already does not enjoy such great demand, compared to another product that has a lower price.

From all of the above, we can conclude that the price gives the main direction of demand.

So, interchangeable goods, examples:

1. Consider an average family of three people. Mother should buy a down jacket for 7 thousand rubles, and his son winter boots for 3 thousand rubles. It's not possible to buy both at once and the family, but the down jacket and boots are equally important. What thing will the family buy first? Boots, because they are cheaper.

2. Again, the average family of three people goes on a picnic. It is necessary to choose water, the question arises about which one? Water with lemon taste costs 10 rubles, and with strawberry taste costs 7 rubles. Water with a lemon flavor and water with a strawberry taste are interchangeable goods. What will the family choose? Water with a strawberry taste worth 7 rubles.

But interchangeable goods can vary in places among themselves. Let's get back to the water. In a week, producers of water with a lemon flavor will notice that sales have decreased, and when analyzing the consumer market, it becomes clear why. There will be a question about what to do? How to defeat competitors? In this case, there are two legitimate solutions to the situation:

1. Lower or equalize the price.

Water with a strawberry taste costs 7 rubles, with an equal price, the buyer will choose the goods according to taste preferences. If the price is lower, for example, 6 rubles, of course, water with a lemon flavor will enjoy greater popularity than with the taste of strawberries. But how is the price of 6 rubles reflected in the enterprise? The payback will be less, hence, the profit will decrease, which in turn will lead to a reduction in the wages of workers or a reduction in the number of employees. And that, and the other will reduce the volume of delivery of goods to stores, and hence, the volume of sales. Ultimately, a low price, but a large demand can lead to bankruptcy of the enterprise. The water with strawberry taste will no longer have a competitor, which is at the mercy of its producers. Hence, the option of lowering or equalizing the price is not suitable, since it is fraught with sad consequences.

2. Making the product unique.

You can not change the price of the goods, but go more creative and profitable way - to make the goods unique. Let the customer receive a gift with a lemon taste, a gum or a tube. You can do it differently: let the lemon water be carbonated. And in either case, the price of 10 rubles will be fully justified, and water with a lemon flavor and water with a strawberry taste will cease to be competitors.

Let's summarize our example with the conclusion: interchangeable goods, when one of them acquires uniqueness, cease to be mutually substituting each other, which is beneficial to both enterprises.

So, the acquisition of goods by uniqueness is an excellent way out with competition. Let's give unique products a scientific definition.

Unique products are products characterized by unique unique properties and not participating in competition issues.

Unfortunately all manufacturers, there is one important rule of the market: all products can not be unique. As stated above, unique products do not participate in competition, if there is no competition, there will be no incentive for renewals, therefore, there will be no progress. But the society must develop, the society demands a new one, then all enterprises of unique goods without updating their products will sooner or later come to bankruptcy.