Cheap range

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Cheap range (or cheap product , cheap goods ) are commercial products or services , with low prices offered are. The opposition is the luxury good .

General

“Cheap” means inexpensive in terms of the general price level or the price ratio to comparable goods or services. With regard to the price level and the relationship between income and demand, there are three economic classes of goods, namely inferior goods , normal goods and luxury goods . Cheap goods are among the inferior goods, for which rising incomes lead to falling demand. Cheap products form a market segment that another consumer habits of consumers has a, for example, luxury goods.

species

The cheap range includes all mass-produced goods in the low-price segment that are offered in supermarkets , but above all at discount stores ( Aldi , KiK , Kodi ) or in special items ( Schum EuroShop , TEDi ). Product piracy of branded goods ( e.g. Rolex ) or fashion labels ( Adidas ) is also one of the cheap goods. In contrast, private labels are no longer cheap products with inferior product quality , but products of the same quality as branded articles with a good price-performance ratio. For the low price segment also includes trademarks like "yes!" ( No-name ) or in the catering trade the junk food or street food . In the service sector, low-cost airlines offer a cheap range. In the housing market , social housing belongs to this market segment. If the income rises, the tenants will have to move out of the social housing, so that the demand for social housing decreases.

Low involvement products are everyday products with a low price, which hardly or not at all require explanation and do not require any service ( food , beverages , detergents ). When buying these goods, the customer hardly deals with the alternatives because he does not attach great importance to the purchase of the product ( English low-involvement , "low interest").

Legal issues

Cheap products are non-attachable if they are considered non-attachable items according to Section 811 (1) No. 1, 5 and 6 ZPO . Objects that cannot be seized according to § 811 Paragraph 1 No. 1, 5 and 6 ZPO are objects for personal use , household effects or objects used for professional or employment purposes.

economic aspects

The selection function of the price means that when the price level is low, there are usually buyers whose income or assets are low. The most important target group for cheap goods is therefore the precariat . The price-performance ratio of a cheap product can be just as favorable as that of a valuable product, namely when price and performance increase or decrease in exactly the same ratio. However, cheap goods are less sustainable than normal products.

The low product quality and high obsolescence of cheap goods are necessary so that the prime costs can be kept low for a low purchase price . Price increases of brand names lead to an increased sales volume of no-name articles, which proves that they belong to the inferior goods. Cheap products are therefore real substitutes for the comparable, more expensive variants. The demand for cheap goods decreases with increasing incomes because the consumer switches to higher-quality or more expensive substitute goods (e.g. from margarine to butter ). Cheap goods are not a property of these goods, but rather the market behavior of some market participants with certain preferences in certain income situations. For example, a student living on BAföG will satisfy his hunger with junk food , but later, as a member of the board of a large company , will dine in the "star restaurant".

Cheap products such as everyday objects or textiles often come from low-wage countries because the low personnel costs lower the purchase price. In terms of income elasticity , cheap goods are negative, i.e. inelastic:

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If incomes rise, the demand for cheap goods falls. During recessions, on the other hand, the demand for them increases; they are relatively independent of the economic cycle.

Individual evidence

  1. ↑ Susanne Wied-Nebbeling / Helmut Schott, Fundamentals of Microeconomics , 2005, p. 49
  2. ↑ KPMG AG (Ed.), Yesterday's No-Names - Tomorrow's Market Drivers? , 2003, p. 1
  3. ↑ Lothar Wildmann, Introduction to Economics, Microeconomics and Competition Policy, 2007, p. 138
  4. ↑ Uli Burchardt, exhausted! Valuable is better - The Manufactum principle , 2012, p. 159
  5. ↑ Claudia Ossola-Haring, Handbook Key Figures for Corporate Management , 2006, p. 259
  6. ↑ Steffen J. Roth, VWL für Einsteiger , 2016, p. 64 f.