How understanding market efficiency can help you grow your business in Malawi

Have you ever wondered why we pay the price we pay for products and services? And why certain things are more expensive in certain areas or time of year?

Well there are of course many influencing factors but one of them is demand and supply.

The price of all goods and services in a market is determined by the laws of demand and supply. Buyers and sellers interact, and a price automatically gets set. Let’s use PEP stores as an example. When setting the prices of their products they need to consider what similar stores are charging for the same products. If they charge too much, they shall lose customers and if they charge too little, they shall have all the customers but make a loss. So, they have to match the prices of other stores. This is what we call the market price.

Demand and Supply

Now just imagine that PEP stores have a product that no one else in Malawi has, let’s say rocket shoes.

These shoes shall be on high demand so PEP stores shall be able to increase the price and charge what ever they like for them.

However, if another company came along with similar rocket shoes, this company would be able to sell at a lower price than PEP stores to steal PEP’s customers. Therefore, PEP would have to lower their prices too to retain their customers. This would go on until the market would reach equilibrium, meaning the stores would not be able to lower their prices anymore without making a loss and customers would not be willing to pay any more than the market price.

This is the power of demand and supply. With high demand and low supply come high prices and with low demand and high supply come low prices.

So why are mangoes cheap in November?  because they are in season so there are mangoes everywhere creating high supply and inturn low demand; and why are apples  expensive in Malawi? because apples don’t grow well in Malawi so they are in short supply creating high demand.

So as a business you will want to create high demand for your products and services, and you will want to reach people who are in short supply of your goods and services

How Can You Increase Demand for Your Products and Services?

One word ‘ADVERTISE’. You need to advertise to reach more customers and grow your business.

Online advertising is particularly advantageous for these three reasons

  • You reach people that you otherwise would not be able to reach.
  • It is cheaper than most forms of advertising.
  • You benefit from indirect advertisement when the website you are advertising on is promoting itself.

Grow your business in Malawi with free advertising

Even big brands like Coca Cola, advertise regularly to keep the demand for their product stable. Small Malawian businesses can benefit the most from advertising as they can easily increase demand. 

Final tips to get the most out of advertising:

  • Don’t just advertise in one place, put your business out there on as many platforms as you can find, let people know what you have to offer. Then as demand for your business increases you can charge a higher price that your customers will be willing to pay!
  • Take advantage of free advertising. Here on we provide free advertising in Malawi. This is a platform where you can reach more customers and grow your market to earn more money.

If the topic of demand and supply interests you,  you can read more about it here.


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