Change In Quantity Demanded Elastic B example essay topic

The Pacific Sands Eco One line of spa products, formulated from select natural enzymes, is a nontoxic alternative to chlorine and bromine for use in consumer spas and hot tubs. The product is heat-activated, has a pleasant lemon scent, leaves water clean and clear, and does not need to be rinsed off the skin after spa use, unlike chlorine and bromine. Spa users are increasingly complaining of adverse reactions to toxic chemicals commonly used in the spa industry; reactions such as itching, rashes, and respiratory difficulty. The Eco One line is recommended for chemically sensitive spa users, and environmentally conscious customers, concerned with the effects of chlorine and bromine on the environment. The Eco One products are competitively priced against the wide mix of chemicals usually employed in spas, still offering healthy profit margins for retailers. Initial test marketing has shown extreme customer loyalty.

The Eco One line consists of three spa care products: ECO ONE STEP ONE is a powerful, nontoxic cleanser that removes chemical residue in spa water as well as contaminants deep inside plumbing and equipment. ECO ONE SPA TREATMENT contains organic enzymes, mineral softeners, and other natural compounds that leave skin smooth and moisturized while helping to maintain sanitary conditions in the spa. It significantly lessens the need for constant chemical manipulation of the water, such as daily pH balancing, defamers, and chlorine and bromine. ECO ONE VINYL TOP CONDITIONER cleans away mold, mildew and bacteria, and their associated odors, which often accumulate on spa covers and then transmit into the water. It also protects against aging and cracking due to sun, age, and weather conditions.

(2) Used together, these three products combine to create clean, clear, pleasant smelling water in spas and hot tubs, at a reasonable price with excellent profits for retailers. Retailers may also choose a "hands off" marketing strategy with the ability to sell Eco One on their websites through the web affiliate program while receiving a percentage of profits directly from Pacific Sands. Eco One is based on Pacific Sands proprietary "hinge pin", enzyme-based technology which has applications that are exceedingly wide, ranging from treating mine tailings to baby's diapers to the food people eat to the sewage they produce in abundance. They want customers to leave with the idea that if you use Eco One line of spa products your body and hands will posses a unique feeling of freshness. This is a positive way to market a rather boring product. Purpose of Ad They provide customers with a visual image of a woman's hand.

Inside the hand of the woman they use pastel colors to represent a sea side resort. It is a calm and sunny day, giving the consumer a feeling of luxury. This ad lets customers experience a vacation without leaving their home. Ad Description The advertisement is presented on a solid white background. At the top it says "Send your hands to the spa Below this sentence there is a silhouette of a woman's hand.

Inside of the hand there is a beautiful blue pool surrounded by people and shrubs. The pool is crystal clear with a kid dy pool in the middle. In the background you can see the ocean over the top of the shrubs, and along the horizon is a blue sky with fluffy white clouds. At the bottom of the page they give customers a verbal statement that sums up the ideas that they wish for them to take from the ad. It says You don't have to go further than your house to treat your body and hands to a little something special.

All you need is new Eco One line of spa products. The unique skin vitalizing proteins actually improve the look and feel of your body and hands. And that's the beauty of it". Target Audience The ad is directed to get the attention of anyone who uses spas and hot tubs. Nevertheless, it is mainly focused towards the consumers who care about their skin. Ad's Strategies They used a solid white background; this was to bring all of the attention on the focal point of the advertisement.

This was the silhouette of a woman's hand with long finger nails. Inside the hand they express a feeling of freshness. They also express this idea in written context at the bottom of the page; this helps the ad appeal to two groups of consumers. The overall strategies are to give the consumer a feeling of freshness without ever leaving the house. The overall marketing technique used in this ad is rather effective.

It is interesting to think about the potential improvements for that product, the only ideas that come up are not about the product itself, but the advertising strategies. More specific target audience should be selected, since advertising to such a general audience might prove to be inefficient. Besides, the company might want to consider the outdoor promotions and exhibitions, since those who are interested in this type of products definitely would like to see it in reality, not in the ads. The conception for the advertising strategy can also be improved by putting more emphasis on the fact that the product is eco friendly, and thus by using that very product consumers not only enjoy the superior quality guaranteed by the producer, but also help in the really hard field of environment protection. That conception might appeal to those who want to ensure clean environment and ready to pay their money for it.

Assignment 4 1) Market demand is best defined as each consumers demand for a particular product, or each firms demand for a particular factor. The law of demand specifies that the amount demanded varies inversely with price. The following table can best demonstrate this. The table shows the maximum rate of purchase. That is, where the price is 40, consumers will buy 200 units and no more, where the price is 60, consumers will buy 160 and no more, etc. Price Quantity Demanded 20 240 40 200 60 160 80 120 100 80 120 40 Movement along the demand curve is caused only by a change in price.

An Increase in price results in a move upward in the demand curve. This is known a contraction in demand (or a decrease in the quantity demanded). Conversely, if the price falls, then there is an expansion in demand (or an increase in the quantity demanded). Some conditions result in a shift of the curve itself (or in this case line). It is important to understand that unlike a movement along the demand curve, this change as nothing to do with price, and in fact has a number of contributing factors. A shift to the right of the original curve represents an increase in demand, and a shift to the left, represents a decrease in demand.

An increase in demand means that consumers are more willing and able to purchase a given quantity of the product in question at the same price. Possible reasons for increase in demand Increased income levels Higher price of substitutes (e.g. Chocolate and Carob) Expected future price rises (consumer expectation causes increase) Changes in fashion, preference and taste Increase in population A decrease in demand means that consumers are less willing and less able to purchase a given quantity of the good at the original price. It also means that consumers are able to buy a given quantity at a lower price than before. Possible reasons for a decrease in demand Decreased income levels Lower price of substitutes Expected future price falls (consumer expectation causes decrease) Changes in fashion, preference and taste Decrease in population 2) A. a famous TV chef demonstrated a new way to cook potatoes which became very popular.

In that case, the demand for potatoes would certainly rise, since one of the reasons for the increase in demand is present here - changes in fashion, preference and taste. A lot of people nowadays watch Television, and it can be said that TV forms and shapes peoples perception. Thus, if in some sort of the TV show, chef demonstrates a new way to cook potatoes, it means that a lot of people are likely to follow his advise, and the demand for potatoes would rise, if not significantly, than to at least some extent. It is not that easy to predict whether the price will go up significantly, since the other factors that can affect demand for potatoes might change in the less favorable way. B. poor weather in the growing season led to a reduced crop of potatoes.

That certainly means an increase in demand for potatoes, since there will be less potatoes available at the market, and the quality might also go down because of the rain that influenced the crop. The price will go up, and the increase in price would be more significant than in the first case discussed above. 3) Elasticity of demand is the sensitivity of the customers to the change in price of a product. The degree of elasticity of demand is measured by the coefficient Ed which is Percentage Change in Quantity Demanded / Percentage Change in Price Percentage Change in Price = Change in Price / Original Price 100 Types of Elasticity a. If %change in Price is %change in Quantity Demanded = Elastic b. If %change in Price is = infinite change in Quantity demanded = Perfectly Elastic c.

If %change in Price is %change in Quantity Demanded = Inelastic d. If %change in Price is = 0 Change in Quantity Demanded = Perfectly Inelastic e. If %change in Price is = %change in Quantity Demanded = Unit Elasticity Total Revenue Test for Elasticity: Total Revenue = Unit Price Quantity Sold. 1. If Price and Total Revenue Change inversely = Elastic 2. If Price and Total Revenue Change Directly = Inelastic Determinants of Elasticity: 1.

Necessary Goods e.g. Medicines 2. Availability of Substitutes 3. In the long run more Elastic 4. Inexpensive Goods The price elasticity of potatoes is approximately 0.16. There are a number of factors that explain that fact.

First of all, potatoes is one of those products that are needed by most of the households, however supplies of that product are mostly abundant, and there is not that much diversity in quality if we try various suppliers. The potato market is thus rather calm, since only some really devastating events can ruin the crop completely, thus making the companies that sell potatoes import and raise their prices due to the additional expenses they have to bear. Those who harvest potatoes in the first place then have to sell it to the retailers, large companies that have potatoes as one of the commodities in their price lists. Before potatoes reaches the final customer, it has to go through a couple of stages, however the mechanism works quite smoothly by now, and usually there is little or no fluctuation in potato price.