What is the purpose of evaluating the attractiveness of the differing market segments identified in the second stage of the market segmentation process?
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System used by a society to resolve the basic problem of what, how much, how and for whom to produce
1. Free market economy: Where markets allocate resources through the price mechanism. An increase in demand raises price and encourages businesses to use more resources into the production of that good or service. The quantity of products consumed by people depends on their income and income itself depends on the market value of an individual's work. In a free market economy there is a limited role for the government, indeed in a pure free market system, the government limits itself to protecting property rights of people and businesses using the legal system and protecting the value of money or the value of a currency.
2.Planned or command economy: In a planned or command system associated with a socialist or communist system, scarce resources are owned by the government. The state allocates resources, and sets production targets and growth rates according to its own view of people's wants. Market prices play little or no part in informing resource allocation decisions and queuing rations scarce goods.
3.Mixed economy: In a mixed economy, some resources are owned by the public sector(government) and some are owned by the private sector. The public (or state) sector typically supplies public, quasi-public and merit goods and intervenes in markets to correct perceived market failure. Nearly all economies in the world are mixed although that mix changes over time for example as some industries are privatised (sold to the private sector) or nationalised (taken back into state ownership).
Cocoa output is dominated by Côte d'Ivoire, which accounts for more than 30% of total output, while Ghana and Indonesia combined account for a further 35%.
Supply is vulnerable to pests and extreme weather conditions such as intense rainy or dry periods. Cote d'Ivoire has been afflicted with political instability which has damaged their supply potential
Long-term cocoa production has been affected by a lack of investment in cocoa plantations and also by population shift away from farms towards urban areas.
Competition from alternative crops (such as rubber) that have become more profitable has hit cocoa production in countries such as Brazil and Indonesia
Productivity is low – as measured by yields per hectare. This is partly the result of limited capital investment spending but also due to ageing trees and limited producer uptake of selection and breeding programmes. Soil fertility levels are declining in many countries
The importance of cocoa to developing country producers cannot be overestimated - more than three million farmers depend on cocoa for a major part of their income.
It is imperative for producers to move up the value chain into manufacturing, marketing and sales, as countries can capture more income from their participation in the chocolate industry.
Typically the price that a small-scale cocoa farmer gets for their raw product is a tiny percentage of the price that consumers pay for their hot chocolates in a store or for their chocolate bars from a supermarket. Cocoa producer cooperatives seek to increase the selling power of cocoa farmers to get a better price for their output.
There are signs that multinational corporations themselves recognize the threats of unstable incomes, ageing plantations and falling productivity on cocoa supplies. Kraft's Cadbury Cocoa Partnership is engaged with nearly a quarter of a million farmers in Ghana.
Many UK retailers have committed themselves to the label of the Fair-trade Foundation
Derived demand: Most of the global demand for cocoa comes from processing-businesses who use cocoa beans to make chocolate-based products including chocolate bars, powdered drinks and powdered chocolate used in cakes
Saturation point? Global demand for cocoa in richer developed countries has grown only slowly in recent years and in some countries it has fallen because of the effects of the recession. There has been a shift towards powder-based drinks rather than cocoa-based drinks partly because of the recent steep price in world cocoa priced
Price elasticity: The demand for confectionery products has been hit by rising retail prices but cocoa is not that significant as a cost of production since it only forms 6% of the price of a bar of chocolate
Rising per capita incomes in developing countries: International demand for cocoa has been sustained by fast-growing demand in emerging market countries
Speculative demand: With cocoa being one of the leading soft-commodities traded in world markets, the price is also affected by the size and impact of speculative buying and selling for example by hedge funds. Therefore, expectations for future production/demand can have a big impact on current prices.
1. Free market economy: Where markets allocate resources through the price mechanism. An increase in demand raises price and encourages businesses to use more resources into the production of that good or service. The quantity of products consumed by people depends on their income and income itself depends on the market value of an individual's work. In a free market economy there is a limited role for the government, indeed in a pure free market system, the government limits itself to protecting property rights of people and businesses using the legal system and protecting the value of money or the value of a currency.
2.Planned or command economy: In a planned or command system associated with a socialist or communist system, scarce resources are owned by the government. The state allocates resources, and sets production targets and growth rates according to its own view of people's wants. Market prices play little or no part in informing resource allocation decisions and queuing rations scarce goods.
3.Mixed economy: In a mixed economy, some resources are owned by the public sector(government) and some are owned by the private sector. The public (or state) sector typically supplies public, quasi-public and merit goods and intervenes in markets to correct perceived market failure. Nearly all economies in the world are mixed although that mix changes over time for example as some industries are privatised (sold to the private sector) or nationalised (taken back into state ownership).
Cocoa output is dominated by Côte d'Ivoire, which accounts for more than 30% of total output, while Ghana and Indonesia combined account for a further 35%.
Supply is vulnerable to pests and extreme weather conditions such as intense rainy or dry periods. Cote d'Ivoire has been afflicted with political instability which has damaged their supply potential
Long-term cocoa production has been affected by a lack of investment in cocoa plantations and also by population shift away from farms towards urban areas.
Competition from alternative crops (such as rubber) that have become more profitable has hit cocoa production in countries such as Brazil and Indonesia
Productivity is low – as measured by yields per hectare. This is partly the result of limited capital investment spending but also due to ageing trees and limited producer uptake of selection and breeding programmes. Soil fertility levels are declining in many countries
The importance of cocoa to developing country producers cannot be overestimated - more than three million farmers depend on cocoa for a major part of their income.
It is imperative for producers to move up the value chain into manufacturing, marketing and sales, as countries can capture more income from their participation in the chocolate industry.
Typically the price that a small-scale cocoa farmer gets for their raw product is a tiny percentage of the price that consumers pay for their hot chocolates in a store or for their chocolate bars from a supermarket. Cocoa producer cooperatives seek to increase the selling power of cocoa farmers to get a better price for their output.
There are signs that multinational corporations themselves recognize the threats of unstable incomes, ageing plantations and falling productivity on cocoa supplies. Kraft's Cadbury Cocoa Partnership is engaged with nearly a quarter of a million farmers in Ghana.
Many UK retailers have committed themselves to the label of the Fair-trade Foundation
Derived demand: Most of the global demand for cocoa comes from processing-businesses who use cocoa beans to make chocolate-based products including chocolate bars, powdered drinks and powdered chocolate used in cakes
Saturation point? Global demand for cocoa in richer developed countries has grown only slowly in recent years and in some countries it has fallen because of the effects of the recession. There has been a shift towards powder-based drinks rather than cocoa-based drinks partly because of the recent steep price in world cocoa priced
Price elasticity: The demand for confectionery products has been hit by rising retail prices but cocoa is not that significant as a cost of production since it only forms 6% of the price of a bar of chocolate
Rising per capita incomes in developing countries: International demand for cocoa has been sustained by fast-growing demand in emerging market countries
Speculative demand: With cocoa being one of the leading soft-commodities traded in world markets, the price is also affected by the size and impact of speculative buying and selling for example by hedge funds. Therefore, expectations for future production/demand can have a big impact on current prices.
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