There are three types of world
economy:- developed, developing & under developed (Shortage economy) . In
an economy of shortages, the availability of goods & resources are shorter
or lesser than their demands.
Limitations of a shortage economy-
1. Under developed in economic
aspects.
2. Natural resources remain
untapped.
3. Restricted development of
industrial activities.
4. Lower standard of living of
people .
5. Shorter supply of Product/
Service & resources.
6. Slow growth of capital formation.
7. Limited opportunity for
employment.
Economists say that development of
economy is possible only when there is increased sale. Therefore sales
promotion is considered to be tool for stimulating the sales. Also, in a
shortage economy, seller’s market is dominant whereby seller takes the
advantage of the situation & creates situations of unfair trade practice.
Thus, sales promotion can stop this situation of unfair trade practice &
thus the economy will grow through the Product/ Service ion of new items copy
setting Product/ Services of new industries & industrial units & this
way the wheel of economy development might move faster & can create a
surplus situation in an economy of shortage.