Understanding the Role of Public Sector in Mixed Economy: A Case Study of Nantes

This article discusses the role of public sector in mixed economy through a case study of Nantes. It covers topics like product characteristics, customer motivation, circular flow of income, and mixed economy functions.

Running head: BUSINESS MANAGEMENT
Business management
Name of the student
Name of the university
Author Note

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Table of Contents
Answer 1:...................................................................................................................................2
Answer 2:...................................................................................................................................3
Answer 3:...................................................................................................................................5
Answer 4:...................................................................................................................................6
References:.................................................................................................................................9

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Answer 1:
In marketing, the term “product” is used with a wide concept that includes both
material goods and services, which a business organization offers to their customers to fulfill
their basic requirements. As this is the chief motive of each good or service, a consumer can
easily substitute them with other product if the concerned person can get same level of
benefit or sometimes, more than that (Jin, Yang, Poe and Huang 2018). However, products
are not always sold to a customer for final consumption. Sometimes, they are sold as an
intermediate product for further production and consequently, have become the capital items.
For instance, a bus can be used as a final product that each consumer can consume or utilize,
while a computer may be used as an intermediate good for further production.
Under product, goods and services can be divided based on some basic characteristics,
which is, products are tangible by nature while services are not (Baker 2016). For instance,
cars, foods and clothes are tangible hence those all are fallen under the category of goods and
treatment of a doctor or service in a restaurant is intangible; hence, those are considered
under service.
To identify a product from the given case study, it is essential to understand about the
different aspects of this with its related benefits. Products can be achieved in the form of
service while it considers ideas of people or only the human being. For instance, various
events like festivals and other games, cities can be referred as products. By consuming a
product, a consumer can earn three types of benefits, which are core product, actual product
and augmented product benefits (Wheelen, Hunger, Hoffman and Bamford 2017). Among
these all, the chief kind of benefit is coming from the core product one, where customers can
obtain this directly from the products, while the actual product benefit states about some
characteristics and features of a product in addition with core product one. This can be

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distinguished based on brand value. Moreover, the augmented product benefits describes
about the services obtained after sales of a product.
In this specified case study, the product, which is offered to the people of Nantes, is
the free contemporary arts. After experiencing various geographical, emotional and physical
instabilities, the arts and cultures of Nantes have departed drastically (Zhu 2017). However,
after the great effort and ideas of the artistic director, Jean Blaise, also a cultural impresario,
the countrt has started to experience their ancient arts and cultures with modern thoughts.
Moreover, to provide core product benefits to their customers or citizens of Nantes, Blaise
has offered free service for their programs. Moreover, the citizens have been obtained actual
benefit of products from the Le Voyage a Nantes, a street show that can be offered a branding
identity.
Answer 2:
In this specified case study, entire citizens of Nantes are considered as customers,
who can buy the product, that is, contemporary art of the city (Souto 2015). However, a
customer’s thinking differs with the one of others and hence it is essential to understand
about the chief motivation of each customer, based on which, Blaise can attract them. As
they think that organization such arts is only the wastage of their tax, the needs to take major
steps for influencing them positively.
The decision process of a customer controls buying motivation for a particular
product (Pappas, Kourouthanassis, Giannakos and Lekakos 2017). Thus, to understand about
the motivations of Nantais to consume contemporary arts, it is essential describe about the
two chief decisions processes relating to customer’s buying decision, which can further
implement in this case study.

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In the first phase, the concept of complex buying behavior can be described, where
large numbers of customers are involved and the purchase is remained expensive or
infrequent. Sometimes customers through the product can express themselves. Hence, to
consume a product, the concerned person follows some decision-making process among
which the two most important steps are needs regarding a product and evaluation of
alternatives (Terho et al. 2017). Need recognition is the initial stage of motivation, based on
which, the customer can choose to consume a specific product. However, according to this
criterion, a consumer initially considers about the importance of the product in their daily life.
This recognition is further supported by the financial structure related to the product.
Secondly, the consumer tries to find out some alternative products that can meet their needs.
In this context, the concerned person can take information from various sources like
commercial one (So, King, Sparks and Wang 2016). After piling up information regarding
this product, a consumer can take final decision that whether the product should be consumed
or not. Hence, those two concepts under complex buying behavior, a consumer can be
motivated to consume a product or not.
According to the case study, customers are not interested to pay money for consuming
this contemporary art because initially the city has not experienced such art in their city and
for this; they need to understand about the necessity of contemporary art in their city along
with evaluation of alternatives of this art (Ismulyaty and Lestari 2017). By understanding
those processes, Nantes can enhance their customer motivation. Hence, initially, the city
offers free events for their customers in various public places to motivate them about the
understanding of arts and cultures. As the chief focus Nantes is to capture the entire citizens
as their customer, this step is essential. In the next step, for the citizens of this specified city
is to understand about the evaluation of alternatives (Robson et al. 2016). The city has earned
huge importance from this program as it helps to reduce the unemployment of this country

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and also helps to become well-known to its other neighbor countries. By gather large amount
of economic profit, the city has proved that art and culture can take part to the development
process of a country. Hence, this product does not have any close alternatives, which has
helped the country to experience such economic success (Jeon and Jeong 2017). Thus, this
step can motive people to consume contemporary art. After analyzing those factors, the
people of this city can consider this product as an important one and consequently, can
motivate themselves and others to consume this, where the public sector can play an
important role too for encouraging people by providing various subsidies.
Answer 3:
The concept of circular follow of income can be described with a simple model by
assuming that a particular economy has only two sectors, for instance, a firm and a
household. Firm produces output with the help of four inputs that are land, capital labor and
organization. Household provides those inputs and earn from those factors in the form of rent,
interest, wage and profit which is called factors payments and by this income, the member of
this household can purchase product of the firm. On the opposite site, the firm, by selling its
output to the people of household, can earn revenue by which it can further hire inputs of the
production. Hence, form those statements, it can be realized that each economic activity are
interrelated with each other and those activities imply the flow of money, which is moving
from one sector to another by a circular way (Campoy-Muñoz, Cardenete and Delgado 2017).
If the complex model of the circular flow of income is taken under consideration, then it can
be seen that money are injected and withdrawn simultaneously. Money is withdrawn from the
circle in the form of net savings, net taxes and import expenditure. On the contrary, money is
injected in the economy in the form of investment, government expenditure and export
expenditure. Hence, after injection and withdrawal, the entire flow of income has remained

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same. Here, the most important characteristic of circular flow of income is that each
economic unit is linked with each other.
With the help of the concept of circular flow of money, the free public art event on
Nantes’ local economy can be described. The municipal government of this city has provided
huge financial support. The chief source of the financial support of this government is the tax,
paid by the citizens. Hence, initially, they have worried about the activities of this
contemporary art as they have though that the government have wasted those money.
However, after one year, it can be seen that those arts programs are generating revenue and
also are offering employment opportunities. Hence, on the one side, the government is
spending money or tax to promote this kind of art in the city and on the opposite, those arts
are offering huge employment and consequently, those employed people have become able to
pay tax to the government (Murray, Skene and Haynes 2017). Moreover, based on this
cultural event, the government has increased its expenditure on tourism sectors while for
those events; people are visiting this place significantly. Moreover, employment generation
has helped the economy to develop further as the country’s national income has become
stronger compare to that of before. Traders and shopkeepers are also trying to utilize quirky
and humorous signs of those artists by which their sells of products can be increased and for
this, they are offering huge amount to those artists. Hence, from those consequences, it can be
stated that the economy is facing a circular flow of money, where entire amount of flowed
money has remained almost same. Money is withdrawn from citizens in the form of tax while
the government is injecting this money within the economy in the form of investment.
Answer 4:
Under the mixed economy system, the economy has experienced the presence of both
public sectors and private sectors and interdependency between them. However, to operate

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the business activities of private sector, the government has adopted some functions to
control (Fixler, Johnson, Craig and Furlong 2017). Those functions can be explained to
understand deeply the role of public sector and its importance in the economy over the
private one. Firstly, the government has set some legal frameworks for controlling duties and
rights of each individual. Thorough implementing laws and policies and other regulations, the
government can protect the economy from labor exploitation, food safety protection of
consumer and environment (Arvidson 2017). Each private business entity is needed to follow
those rules and regulations of the government. Secondly, through providing public services,
the government can maintain economic welfare, which cannot be found in capitalist
economy. Public transport, public hospital and all other facilities provided by this entity are
fallen under this category (Musacchio, Lazzarini and Aguilera 2015). Thirdly, the
government of each country can promote any business organizations or the entire business
sector by providing financial support in the form of subsidy or by lowering the rate of interest
to take loan for investing any particular product. The government can reduce the amount of
tax on production if the product becomes essential for the country. Lastly, by purchasing
products from private sectors, the public sector has provided huge amount of revenue to
them. Public organizations maintain direct business relationship with private organizations.
Hence, by performing in business sector, the public sector under mixed economy has played a
vital role.
According to the case study, Nantes has experienced a mixed economy structure,
where public sector and private sector together have taken part in various business activities.
For instance, at the beginning, a private artistic director along with the mayor of this city has
tried to promote this contemporary art. Moreover, the municipal body has provided financial
support and the public work company of this city have started to collaborate with private
artists. Hence, the public sector has performed almost its entire role under this economic

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structure. Initially, it has provided legal protections and has provided permissions to perform
those tasks related to contemporary arts in any space of the city. As a consequent, this art has
been performed in some important places, for instance, public areas and bridge. Moreover,
the municipal government has provided financial support to promote this activity along with
tourism sectors so that the city can experience huge economic profit. In addition to this, the
public company has started to collaborate with other artists to achieve more success through
an efficient way. For instance, the government is trying to enhance the interest of common
people by offering free services at the initial stage o promotion. Hence, by adopting this
strategy, the government can increase the economic welfare of the country through offering
huge employment opportunity, which in turn has helped the city earn more national income.

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