Market equilibration process and real-world free market applications

Market Equilibration Process for Computer Peripherals

That Experience High Level of Cyclicality

The demand for computer peripherals in general for the inkjet and low-end nonimpact printers specifically has continually proven to be highly inelastic, where price reductions are not as effective as a continual stream of new product innovations. Having completed internships with peripherals manufacturers, this observation became very clear as product management and marketing teams continually tested the market equilibration process with price reductions, bundling suppliers and extending the overall warranty period as well. When the law of demand is applied to computer peripherals in general and inkjet printers specifically, the inelasticity of these markets becomes more pronounced and the ancillary process workflows emerge as the primary differentiators.

Analysis of Market Equilibration Process for Computer Peripherals

In the absence of highly elastic product demand and exceptional product differentiation that leads to unitary or highly elastic demand curves for products, the supporting processes and logistics systems become the enablers of pricing elasticity. In the case of consumer electronics globally, and specifically in the areas of high technology-related inkjet printers, the supply chain execution, logistics workflows and orchestration of suppliers, distributors and dealers is more critical than the product's unique differentiating factors in contributing to market equilibration (Leijonhufvud, 2009). This same dynamic is also seen in many of the areas of high volume retailing and mass merchandising, where the products themselves are not differentiated to the point of defying the inexorable gravity of price competition in commodity goods, but rather the price and availability associated with them being part of a mass merchandiser's product set (Matsushima, 2004). The market equilibrating process is therefore more focused on how to create differentiation and value through the synchronization of suppliers, partners, distributors and all other external constituents responsible for keeping the value chain of the business continually operating. The shape of the demand curve over time is also more defined by the experience effect of ancillary and supporting subsystems first, including the impact of the logistics and supply chains' levels of on-time performance and reduction of stock-outs (Matsushima, 2004).

This has also been seen from personal experience, where new inkjet products were launched and went quickly into allocation status as sales exceeded the product forecasts. The law of supply was more defined in these situations clearly by supply chain performance as well (Matsushima, 2004). This also lead to a clearer view of the efficient markets theory in pragmatic terms, as the supply chains' efficiency and orchestration of processes was far more critical than the initial price or availability of the inkjet printer.