The main characteristics of interrelated indonesian numbers products are that their purpose, design, quality, and pricing policy are essentially equivalent, so by and large, it does not matter to the buyer which of several products to buy, for him they are practically the same. The consumer, based on his income, will choose a product where all the above parameters are combined in the best way for him.
Types of interchangeable goods
In market conditions, rigid interchangeability of goods is quite rare, relative interchangeability comes to the fore. Need completely influences the final price of the product. If goods are considered substitutes, then the final cost together with demand will change strictly proportionally. For example, when the price of tea decreases, interest in coffee and cocoa decreases.
It is quite useful to take into account and use the interchangeability of products, especially when it comes to analyzing the behavior of buyers in the market, the regularity of setting prices and assessing demand. If you want to form the right policy, according to which consumers will turn to you for goods, you need to clearly analyze the available substitutes.
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The difference between substitutes and complements
Let's try to figure out: how do interchangeable goods differ from complementary ones? It's simple: the first category satisfies a common need, that is, one product is completely replaced by another. The second goods complement each other, they must be used together.
Examples of such products are tea and sugar, dresses and shoes, a car and gasoline, etc. It is an indisputable fact that complementary goods that cannot be used without each other have a close relationship, expressed in demand and price. That is, if the cost of one product increases, then the demand for the second one falls. You cannot buy a shuttlecock without a badminton racket, a SIM card without a mobile phone or tablet.
Complementary goods, or rather their relationship with each other, can be characterized as negative: when the price of one increases, demand for the other falls sharply. It is easy to understand why this happens: the first product is sold much worse due to its increased cost. Without it, there is no particular sense in purchasing the second product, which is why demand for it falls. In economics, this is called the negative type of cross elasticity of demand.
Let's look at an example. Let's assume that the price of an iPhone has increased by 5%, which has led to a decrease in people's need for it. If a person does not buy a phone, then he does not need cases for it - the demand for accessories has also fallen. It is this fact that allows us to consider the goods as complementary.