Free Market Essay

1257 words - 5 pages

Free-market Capitalism means that businesses are able to sell their product at whatever price they feel the market can sustain, allowing customers to buy products at a price they are willing to accept. The key to this market is price fluctuation; where pricing goes up or down to reflect supply and demand. The healthiest markets are those in which there are many producers competing for business and many consumers competing for the available products. This type of market minimizes the involvement of government, lessening regulations, unions, and trade barriers, allowing the businesses and the customers to decide which business will be successful. This in turn creates more jobs and competition (TheFreeDictionary, 2009).
Creative capitalism is centered around companies’ spending money on projects that are seen as socially desirable. To Bill Gates (2008), it is "market-based social change [that adds up to] doing work that eases the world's inequities “(Gates, 2008). This constitutes companies supporting causes that are important to the customers in their neighborhoods. Many companies are jumping on aboard what some are calling the RED campaign, which started as a fight to end AIDS in Africa but has now expanded to a worldwide fight to end AIDS and to have an AIDS free generation. While this is just one of many community campaigns, the result of the community work done by companies has some economic advantages to the business.
Some corporations have identified brand-new markets among the poor. The use of tier pricing has allowed them to provide life-changing technologies at cost, while increasing the cost to those who can afford to pay more. For example, Vodafone bought a stake in Kenyan Cell Phone Company, thinking that the market would top out at around 400,000 users; today they service more than 10 million users. The company has done well by finding creative ways to offer service to low income customers in their market. One way they have done this is by charging by the second rather than by the minute which has allowed them to keep their costs down (Gates, 2009).
Another advantage to companies using creative capitalism is the increase in customers. By offering to donate a portion of sales to a good cause, some companies have gained new customers that are concerned with the social and economic issues around the world. This not only creates a new customer, but also creates loyalty to the brand which helps build the brand through the use of social media outlets. An example of this is Whole Foods Market. By donating to the local communities and helping to fight hunger in their neighborhoods, the organic market has increased its market share and has created a loyal customer base (Whole Foods, 2011).
Finally, every business out there today is in the business to make a profit. Beyond finding new markets and developing new products, companies sometimes can benefit by providing the poor with discounted products. A company offering a...

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