Choosing Between Mexico and Canada for MekTech's New Home Theatre System

Purchasing Power as a Determining Factor

Purchasing power describes the ability of consumers in a specific market to buy goods and services. It is a crucial parameter for companies like MekTech to consider when evaluating the growth potential of foreign markets. In this case, comparing the purchasing power of potential markets like Mexico and Canada can provide valuable insights.

As mentioned in the answer, the average GDP per capita in Canada is significantly higher than in Mexico. With an average GDP per capita of US $46,233 in Canada compared to US $9,673 in Mexico, Canadians generally have a higher purchasing power.

For a product like a home theatre system, which can be considered a luxury item rather than a basic necessity, targeting a market with higher purchasing power can be beneficial. Consumers in Canada may be more willing to invest in such luxury goods, leading to potentially higher sales volumes and revenues for MekTech.

Therefore, by considering purchasing power as a parameter, MekTech can make a more informed decision on which market—Mexico or Canada—to launch its new home theatre system.