Read the caselet and answer the question :
The perfume industry, as fragrant as it may seem, is a multi-billion dollar industry, where many firms spend a sizeable amount of money to create awareness. This market has gained significance and become bigger with each passing day, as developing markets opened their economies to global players. They sponsored a lot of beauty pageants, and in turn, many were won by women from these economies. The concept of being beautiful and appealing was promoted through huge celebrity endorsements. The advertisement tag-lines “Fragrance has a character”, “fragrance has an identity”, and “fragrance has an appeal”, flourished, Marquee names like Yardley, Fragonard, Davidoff , Calvin Klein , Titan, Chanel, The Body Shop, Burberry, United Colors of Benetton, Elizebeth Arden, Hugo Boss used these tag-lines to enter the perfume business. They spent huge amounts on creating their brand presence and niche. Many others lined up to capture a small market share targeting a different segment of customers, because of easy entry. As more and more firms entered, the fragrance of higher profits started getting lost. Some brands perished, and some survived. This market will see huge unutilized capacity.
Based on the above caselet, explain the following -
A. What kind of market structure is Perfume industry ?
B. Explain how this market behaves in the long run and what are the implications of that.
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