Category: Academic Theory

Copied in its entirety from Introduction to Business

In recent years, more countries have shifted toward free-market economic systems and away from planned economies. Sometimes, as was the case of the former East Germany, the transition to capitalism was painful but fairly quick. In other countries, such as Russia, the movement has been characterized by false starts and backsliding. Capitalism, also known as the private enterprise system, is based on competition in the marketplace and private ownership of the factors of production (resources). In a competitive economic system, a large number of people and businesses buy and sell products freely in the marketplace. In pure capitalism, all the factors of production are owned privately, and the government does not try to set prices or coordinate economic activity.

A capitalist system guarantees certain economic rights: the right to own property, the right to make a profit, the right to make free choices, and the right to compete. The right to own property is central to capitalism. The main incentive in this system is profit, which encourages entrepreneurship. Profit is also necessary for producing goods and services, building manufacturing plants, paying dividends and taxes, and creating jobs. The freedom to choose whether to become an entrepreneur or to work for someone else means that people have the right to decide what they want to do on the basis of their own drive, interest, and training. The government does not create job quotas for each industry or give people tests to determine what they will do.

Competition is good for both businesses and consumers in a capitalist system. It leads to better and more diverse products, keeps prices stable, and increases the efficiency of producers. Companies try to produce their goods and services at the lowest possible cost and sell them at the highest possible price. But when profits are high, more businesses enter the market to seek a share of those profits. The resulting competition among companies tends to lower prices. Companies must then find new ways of operating more efficiently if they are to keep making a profit—and stay in business.

The starting point of this paper is the idea of brand. Its aim is to define the role of a brand with the purpose of the establishment of future contributions in the scope of this area, that is its influence on purchase stimulation and the establishment of a competitive advantage for a business entity in regard to other market actors. Furthermore, a brief theoretical explanation of the term brand is provided, i.e. the history of brand’s emergence, as well as a review of its elements. The many complexities during the establishment of brand are also explained. Brand has emerged as a consequence of market globalization, as well as the existence of numerous products that satisfy the same need. Its main purpose is the differentiation of products and the attempt to draw potential consumers’ attention in order to influence them to decide on the purchase of a brand product as quickly as possible. Business entities that realize the importance of creating a brand, its development and management will create all preconditions for successful, i.e. profitable operation. This way of deliberation and brand management represents the key to the business success of every business entity. It is generally considered that the market power of a brand can also be treated as an asset >>ClickHere>>>