by Pops » Wed 13 May 2015, 09:07:03
When I was a kid, maybe 7 or 8, I remember riding in my father's Ford Falcon.
I asked where we were going and he said,
"we're going downtown to get gas, they're having a price war and regular is only 25¢"
I can't remember what I thought about that but it must have made an impression.
In marketing, the product cycle describes introduction, growth, maturity & decline of a product. In the maturity phase, the product typically has achieved its greatest penetration into the market (growth) and competition turns to maintaining market share. Eventually the market goes into decline as demand falls or the product is replaced but during the maturity phase there is lots of consolidation, M&As, price wars.
I'm not sure how that relates to a commodity, especially one like oil. I can't see how keeping the price low helps KSA or OPEC. Oil is not like a refrigerator that you buy once and then are out of the market for a decade, it gets used up right away. OK, so they keep their market share, maybe even increase it a spec, but to what benefit if their income is lower?
I guess I just don't get it.
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The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)