The Search Engine Market
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Published: Mon, 5 Dec 2016
Google Search Engine Company
Google was established in 1998 as a small entrant into the search engine market but has over the years transformed into arguably the largest search engine today with over 150 domains across the globe. Google products are distinctively differentiated to offer individuals and companies alike discretionary information search, access, disbursement, processing and storage. The main products of the search engine include Search, Ad, mobile products and Apps.
Search product basically provides consumers with information. By visiting Google’s domains one is able to find information in various languages whether its information regarding business trends, past and current events in matters relating to sports, news headlines etc. in addition the search product allows one to find books, images addresses and so many more. Google has incorporated universal search technology which avails all the sought information in a single query.
Google search engine is widely used globally with millions of queries every day. As a result of this high number of visitors to these Google domains advertising therefore became a key component of Goole forming the bulk of its source of revenue. Google is able to provide both transactional and relationship marketing due to its diverse web applications ranging from search engine to social networking utilities where one can share and store information Advertisers normally bid to have their ads displayed alongside sought specific words. With specified geographic location and display time advertisers are able to reach target population to promote their products or services.
Web applications or “Apps” provide consumers with networking capabilities with products like Gmail, YouTube, Google docs etc which enhance information disbursement whether it’s at a personalized level or target group sharing. This has enabled consumers of these products to work and interact from anywhere in the globe provided they have access to the web.
Factors That Determine Demand for Google Products
Demand for Google products is discrete. While other convectional products are to a lager extent dictated by price, most of Google products mainly the search engine is zero rated in terms of price and therefore its demand is purely driven by their effectiveness and convenience compared to other similar products. They provide very easy form of communication and exemplary service. Products like mobile products and desktop applications are ever rising in demand because of their reliability. The main factors that lead to an increase in demand of Google products includes but not limited to;
- Increased internet activity results in an increase in demand for Google products
- Free of charge/ zero rating price of most products
- Development of merit products i.e. education of the masses in information technology and corresponding government subsidizes in ICT industry.
- Advancement in information technology resulting in creation of more Google products which easily and conveniently enhance communication
The ever rising demand of advertising product in Google is driven by the influx of consumers using other products of the company who are also consumers of the products and services that are marketed in the ads. However, Google products demand is also based on access to other complimentary products like computers, lap tops web enabled phones internet etc. When more people are trained in basic information technology and have access to internet facilities the demand for such products goes up and the reverse is true. This factor of demand clearly explains why there is a high demand for Google products in the developed countries compared to the developing ones.
Factors That Determine Supply for Google Products
The supply of Google products is perhaps most unique as it is discrete. Supply of Google products and services is not profit oriented but rather based on technology and legislation regarding access and disbursement of information. In addition legislation relating to advertising to a large extent determines supply of Google products and services. Basically supply of Google products is based on
- Demand which is directly proportional to supply a good example is the ever increasing number of domains
- Internet activity which has a positive correlation with supply of Google products
- Governments registration and regulation – some countries require moderation of content
- Technological advancement more innovations result in new advanced products
- Increase in the number of suppliers as more domains are created supply goes up too
Available substitutes for Google product
Though Google can be referred one of the leading search engines in the world, there are other companies that offer similar products in the market
- Search product is offered by other such engines like yahoo and MSN
- Web applications or “Apps” are available through other search engines Yahoo mail, Hotmail (MSN) etc
- Advertising is basically all over the net with ads on blogs, search engines like Yahoo and other networking utilities like Face Book
Available complements for Google products
Google being a high quality search engine has very many compliments. Virtually every activity that occurs through the internet compliments Google’s main business. Many people and companies alike carry out activities online and therefore are likely to see more ads as they consume Google products thus making more money for the company. The compliments of Google products includes but not limited to
- Internet which is the main compliment
- Operating systems programmes and accessories like XQL severs, Linux, Microsoft
- Web browsers like Mozilla Firefox, opera mini, internet explorer and many more softwares
- Computer accessories and other ICT related gadgets and hardware
Education on ICT is also a key compliment of Google products since one needs to have basic skills in ICT to be able to consume these products.
Elasticity of Google Products
Google is a well established ICT firm with arguably sufficient factors of production in terms of labour and capital to undertake ICT services. Google nature of business of dealing with information which is not perishable has the ability to hold and store its information in their servers allowing access upon demand thus make it have inelastic demand in the short run. In addition, Google does not operate at full capacity of resources at its disposal the firm can comfortably accommodate increased demand without having to increase their cost of production and therefore no need to increase price thus inelastic demand in the short run. To become the market leader in search engine industry, Google has always strived to broaden its operational capacity despite currently operating at excess capacity. This would ensure that Google outgrows its competitors by not only operating under an inelastic demand in both long and short runs but also providing high quality products and services at relatively stable prices.
Google Nature of Production
Google has grown rapidly because of its closed nit management system. Engineers are encouraged to work in small specialized groups The main focus for their products is the user, by accepting that a quality search engine can only better not perfect, Google has over the years strived to improve the quality of their search engine through undertaking capital intensive research to avail accurate and broad information that suits their consumers needs whilst undertaking innovations using bottom-up approach. The main drive of Google success is technology. Development of PageRank technology was the first of its kind in the market which has made Google the most popular search engine today.
Google’s Market Structure
There are a few internet search engine firms in the market. initially this market was dominated by Yahoo in the early years however in the recent past Google has emerged as a top quality search engine with similar but differentiated products interms of quality and innovations compared to its competitors it therefore operates as an oligopoly because;
- It deals with similar products to its competitors though differentiated in terms of quality
- There are a few firms in the internet search engine industry.
- Google thrives on innovation which differentiates its products thus inclined towards oligopoly
- Google is a price maker and the company’s aim is not to maximize profit but to satisfy users.
As the world is steadily turning into a global village more activities will be carried out online and a result there would be an ever rising demand for Google products, the firm has the potential to become one of the world’s most profitable companies.
The Coca-Cola Company
It is a non-alcoholic beverage company, the marketer, the promoter and owner of the same. It manufactures and distributes syrups and concentrates used for producing non-alcoholic beverages. It is a licensed company with over five hundred different non-alcoholic brands. It produces both sparkling and still beverages like bottled and enhanced waters, readymade tea and coffee drinks, readymade juices and juice drinks, energy drinks and sports beverages. Apart from manufacturing, it supervises and authorizes all bottling its partners in manufacturing fountain syrups, selling them to respective retailers like chain stores and/or restaurants where it is used to produce beverages for final consumption by consumers.
Factors that lead to demand of Coca-Cola company non-alcoholic beverages:
- Rigorous effective advertising of Coca-Cola Brand: the company has built for itself a popular, reliable and trusted brand that stands out from the rest in soft-drinks industry. As of now the brand markets and sells itself without much effort, this has made the company to be the major player in the industry with no company challenging it in the market share. It is to say that, one can be blindfolded, order a cold coke and take without a second thought; that is the level of trust the brand has built for itself in the market.
- Outstanding taste and quality of coke products: the quality for the product speaks for itself. It is evident in the market that its beverages has the highest selling rates than other drinks, even where indigenous drinks exist, it competes fairly well. This is due to the fact that, the product is manufactured in high and excellent standards with high technology that meets the taste and preference of many.
- Coke products have a wide range of complements: due to the blending nature of its products demand for coke products has always risen because its viewed as a versatile drink e.g. one of the major products, like soft drinks blends and makes concentrates with majority of liquid and related products like alcoholic drinks. This makes it a concentrate ingredient for many beverages.
- Excellent packaging: the high level of packaging technology markets the products in all sectors. The package comes in different designs and colours suited for any occasion, activity and even age.
- The demand and supply of the product: there is a high demand for the beverages due to the above mentioned factors among others and they are readily available. In almost every single geographical location on the planet earth, there is ready available stock of the beverage to be sold at the time, with virtually all types of beverages always well stocked ready for sell.
As regards to the supply, several factors among others as highlighted below contribute to the supply of the products:
- Price; the pricing level of Coca-Cola beverages affects its supply in the market, its price regulation is moderate hence affordable however, the products have a very elastic demand and consequently an elastic supply.
- Changing seasons and events; advertising has popularised coke drinks as the most refreshing and cooling drinks ever whether it’s an up upcoming major sports event e.g. world cup in south Africa or an approaching hot summer, coke products are conventionally accepted as the ideal complements to such events or seasons thus increased demand which triggers an increase in supply.
- High degree of customer loyalty; a huge junk of customers in the market have a loyal attachment to the Coca-cola brand, this increases demand hence supply
However, it is important to note that, factors that affect supply are intertwined with those of demand. That is to say, all factors described under demand are also applicable in supply.
Available substitutes for the product
Coca-cola Company produces many products in today’s market, ranging from refreshments to energy drinks. As a result there exist many substitutes in the market key among them Pepsi company products and other soft drinks like juices, beverages like coffee and tea, energy drinks like red bull and shark and so many more. The main threats are the substitutes mentioned above since the consumers are not totally loyal to the brand in the soft drink industry. Also in the limelight is the varying health consciousness in the market, this allows other substitutes to take share in the market. In addition, the purchasing power is another important threat in the industry; this is evident from the raw between Pepsi and Coke in price control which makes the market to move slowly. This does not quickly respond to changing consumer demands and attitudes, this will eventually give room for other beverages because consumers can easily switch to them
Compliments for Coca-Cola Products
Coca-cola through the years has managed to produce very many products tailored for consumption both in isolation and with various compliments in the market today. The company deals in the production, packaging and distribution of differentiated products ideal for refreshment, energy boost, blending and social appeal. Coke products can be consumed with various compliments. In fast food joints and other eateries they are served with many food staffs, at dinner tables coke products are traditionally accompanied with meals. In addition coca cola has produced various sports drinks used to boost energy for athletes on and off the pitch thereby complementing various sporting events. As refreshment coke products are used as social drinks in bars, hotels and so many places often accompanied by other drinks like alcohol as favourite mixers and with snacks like pop corns in cinemas, sports arenas etc. In a nut shell coke products complements both tangible goods and activities or events like meetings and games.
Elasticity of coca-cola products
Coca-cola deals in products that arguably can be described as comforts rather than basics. It therefore follows that the popularity of its products accrue from intensive advertising and personalizing of end products to attract and maintain demand. With very many substitutes in the market, these products thrive on popularity and distinct quality. A small change in their price would therefore result in a commensurate change in demand it thus follows that coca – cola products have an elastic demand both in the short run and in the long run as long as the world economy remains stable.
Coca-Cola Nature of Production
Coca-cola has existed in the market for almost a century with a sparkling taste its products are distinct from its competitors. Producing millions of products a day in over five hundred countries with the latest technology known to mankind from processing, standardizing to packaging nearly every aspect is mechanized the company therefore relies heavily on technology to be able to produce in bulk whilst maintaining the quality and taste of its products. In addition the production process is capital intensive and labour intensive in terms of distribution and marketing.
Coca Cola Market Structure
Coca-cola is a well established company that produces more than five hundred products in today’s market. It’s difficult to attach a similar market behaviour in all its products thus convincingly place the company in a similar market structure. However, looking at the company’s products in isolation shows that it operates at different market structures. While it’s soda products make it operate as an oligopoly because only Pepsi is a close rival and as a result the company is a price maker, thrives in differentiating its products through innovation most recently ‘light coke’ other products like bottled water make it operate as a perfect competition where its forced to be a price taker, deals in homogeneous product and compete with many firms.
Coca-Cola Company Prospects
A variety of substitutes for the product exists in the market, like Pepsi, tea, coffee, juices, hot chocolate, milk; however, a SWOT analysis reveals that the brand product stands out from the crowd. The product is laden with a strong sentimental value taken to heart by many people. It stands out as a powerful symbol, simple but with a sign of quality and enjoyment. The product enjoys a strong bottling system, which allows them to do their businesses on a worldwide scale while maintaining a local based approach. However in the recent past, the company has reported some declines in its volume for example in Indonesia and Thailand, and increase in other regions like in Latin America. This shows that as much the markets in other regions are thriving, in others it is declining probably due to availability of other beverages. In some cases, it is linked to the purchasing power of citizens. In a nut shell, the product has got several opportunities like its well recognized brand and packaging which are very significant. It is a well known brand globally (90% as of now), and this enables it to compete well in market.
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