Demand analysis (1)
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  • 1. QIS College of Engg. & Technology Demand Analysis The production, distribution and consumption of counterfeit goods have been increasing at an alarming rate. Current legislation addresses the supply side of the problem, but not the demand side of the problem. The purpose of this paper is to examine, empirically, factors affecting consumer demand for counterfeit goods were analyzed. Koppula.ChandraSekher 1st-M.B.A :13491E0037 2013
  • 2. A Study on Demand Analysis Mini Project Report in Managerial Economics Submitted to JNTU, Kakinada in Partial Fulfillment for the Award of the Degree of MASTER OF BUSINESS ADMINISTRATION Submitted By Koppula.Chandra sekher (Reg. No. 13491E0037). DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION QIS COLLEGE OF ENGINEERING & TECHNOLOGY An ISO 9001: 2008 Certified Institution and Accredited by NBA (Affiliated to JNTU, Kakinada and Approved by AICTE) Vengamukkapalem, Pondur Road ONGOLE –523 272 .
  • 3. INDEX: Page No’s S. No Contents 01 Abstract 03 02 Key wards 03 03 Introduction 03 04 Definition 04 05 Need for the study 04 06 Scope of the study 04 07 Methodology 04 08 Objectives 04 09 Review of literature 04 10 Demand determines 07 11 Demand functions 08 12 Law of demand 08 13 Conclusion 09 14 References 09
  • 4. Demand Analysis Abstract: The production, distribution and consumption of counterfeit goods have been increasing at an alarming rate. Current legislation addresses the supply side of the problem, but not the demand side of the problem. The purpose of this paper is to examine, empirically, factors affecting consumer demand for counterfeit goods were analyzed. Key words: Consumer behavior, Counterfeiting, Demand model, Price of commodities, Income level of the consumer, Introduction: The production, distribution and consumption of counterfeit goods have been increasing at an alarming rate. Current legislation addresses the supply side of the problem, but not the demand side of the problem. Consumer education may be a feasible approach for addressing the demand side of the problem. Definition: Every want supported by the willingness and ability to buy constitutes demand for a particular product or service. In other words, if we want a car and I can’t pay for it, there is no demand for the car for my side. A product or service is said to have demand when three conditions are satisfied. 1. Desire on the part of the buyer to buy. 2. Willingness to pay for it. 3. Ability to pay the specified price for it. Unless all these conditions are fulfilled, the product is not said to have any demand. Need for the Study: The economic theory of consumer demand provided the theoretical framework. Data were collected from students enrolled at a major mid-western university, and logistic regression was used to estimate demand functions for counterfeit goods.
  • 5. Scope of the Study: Demand always implies at a given price how much is the quantity demanded at a given level of price? This is the volume of demand. The use and characteristics of Different products affect their demand. In other words a product with more number of uses is naturally more in demand than one with a single use. Methodology: • This data collected from electronic sources collected from the electronic sources i.e., from the Google and the related websites and also Class subject materials. • Wikipedia, M.E class Material Objectives:  To know that the results indicated that student sensitivity to the counterfeit problem did not significantly deter the purchase of counterfeit goods.  To Study Explain the demand for a particular product or service in a given region for a particular day can be viewed as short-run demand.  To Evaluate Examine the demand for a longer period for the same region can be viewed as long-run demand. The demand that can be created in the long-run by changes in the design as a result of changes in technology is long-run demand. Review of literature: Nature and types of demand Factors of demanding determines Price of commodities Expectations Demand function Law of demand Demand always implies at a given price how much is the quantity demanded at a given level of price? This is the volume of demand. The use and characteristics of Different products affect their demand. In other words a product with more number of uses is naturally more in demand than one with a single use. 1. CONSUMER GOODS VS. PRODUCER GOODS: Consumer goods means the products and services which capable of satisfactory human needs. Goods can be grouped into consumer goods and producer goods. Consumer goods are those which are available for ultimate consumption, these give direct and immediate satisfaction. Ex: - bread, apple, rice.
  • 6. Producer goods are those which are used foe further processing or production of goods or services to cash income. Ex: - machinery, tractor. 2. AUTONOMOUS DEMAND VS DERIVED DEMAND:Autonomous demand refers to the demand foe products & services directly. Ex: - The demand for the services of a super specialty hospital can be considered as autonomous, where as the demand for hotels around that hospital is called a derived demand, if there is no demand for houses, there may not be demand for steel, cement, bricks, demand for houses is autonomous whereas demand for these inputs is derived demand. 3. DURABLE VS. PERISHABLE GOODS: Here the demand for goods is classified based on their durability. Durable goods are those goods which give service relatively for a long period. The life of perishable goods is very less, may be in hours or days. Ex: - milk, vegetables, fish. Rice, wheat, sugar, these are examples for durable goods. Freezing facilities, the life of perishable goods can be extended for some time. Products such as: TV, refrigerator, and washing machines are useful for a longer period; hence they are classified as consumer durables. 4. FIRM DEMAND VS INDUSTRY DEMAND: The firm is a single business unit where as industry refers to group of firms carrying on similar activities. The quantity of goods demanded by a single firm is called firm demand and the quantity demanded by the industry as a whole is called industry demand. Ex: - one construction company may use 100 tonnes of cement during a given month. This is a firm demand. The construction industry in a particular state may have used ten million tonnes. This is industry demand. 5. SHORT-RUN DEMAND VS LONG-RUN DEMAND: Joel dean defines short-run demand as, “the demand with its immediate reaction to price changes, income fluctuations”. Long-run demand is that demand, which will ultimately exist as a result of the changes in pricing, promotion or product improvement,  The demand for a particular product or service in a given region for a particular day can be viewed as short-run demand.  The demand for a longer period for the same region can be viewed as long-run demand. The demand that can be created in the long-run by changes in the design as a result of changes in technology is long-run demand.
  • 7. 6. NEW DEMAND VS REPLACEMENT DEMAND: New demand refers to the demand for the new products and it is addition to the existing stock. In replacement demand, the item is purchased to maintain the asset in good condition. Ex: - the demand for cars is new demand and demand for spare parts is Replacement demand. 7. TOTAL MARKET AND SEGMENT MARKET DEMAND: The consumption of sugar in a given region, the total demand for sugar in the region is the total “market demand”. The demand for sugar from the sweet, making industry from this region is the segment market demand. Ex: - sugar FACTORS DETERMINING DEMAND: The demand for a particular product depends on several factors; the following factors determine the demand for a given product Price of commodities: A consumer generally purchases large amount of commodities when price declines, and vice versa. Thus we can say that for a normal good the price and demand inversely. A fall in the price increase consumer purchasing, power, and vice versa. Income level of the consumer (I). Within increase income of house hold buy increased amount of commodities. normally the income of the house hold and quantity of demand goes in same direction. Prices of related goods which may be substitutes or complimentary: When a change in price of one commodity influences the demand of other commodity. Commodities are two types. 1. Substitutes 2. Complements When price of one commodity and quantity of other commodity move in same direct are called substitutes. Ex: tea and coffee. On the other hand the price of one good increase and quantity of other commodity is also increase. Ex: pen and ink Car and petrol. Resource: Subject Material “Managerial Economics”
  • 8. Demand determinants: Factors determine demand General Factors Additional Factors related to luxury goods & durables Price of the Product Income of the consumer Advertisements consumer expectation of future income Price related goods Additional factors related to market demand. geographical area Taste & Preferences consumer expectation of future prices Resource: Subject Material “Managerial Economics” population
  • 9. DEMAND FUNCTION: Demand function is a function which describes a relationship between one variable and its determinants it describes how much quantity of goods is bought at alternative prices of goods and related goods, alternative income levels and alternative values of other variables affecting demand. Thus the demand function for a good relates the quantity of a good which consumers demand during a given period to the factors which influence the demand. If we see mathematically, the demand function for a product A can be expressed like. Qd = f (P, I, T, PR, Ep, Ei, Sp, Di, A, O) Some impacts:1. Price of the product. 2. Income of the consumer 3. Prices of substitutes or complimentaries. 4. Tastes and preferences. LAW OF DEMAND;The Law of Demand states: other things remaining the same, the amount of quantity demanded rises with every fall of in the price and vice versa. The Law of demand states the relationship between price and demand of a particular product or service it makes an assumption that all other demand determinants remain the same or do not change. CHANGE IN DEMAND: The increase or decrease in demand due to change in the factors other than prices to change in the factors other than price is called change in demand. Change in demand leads to a shift in the demand curve to the right or the left. INCREASE IN DEMAND:If the consumers are willing and able to buy more of rainbow shirts at the same price, the result will be an increase in demand. The demand curve will shift to the right.
  • 10. From the above figure, how the demand increases from D, D to D1, D1, it shows that the buyers are ready to buy more quantity of arrow shirts at the same price. DECREASE IN DEMAND:A decrease in demand occurs when buyers are ready to buy less of a product at the same price because of factors like fall in income, rise in price of complementary goods and so on. A decrease in demand will shift the demand curve to the left. From the above figure the demand curve D, D decreases to D1, D1 at the same price level OP, the quantity demanded also decreases from OQ to OQ1. Increase or decrease in demand involves a shift in the demand curve. Resource: Subject Material “Managerial Economics” Conclusion: The production, distribution and consumption of counterfeit goods have been increasing at an alarming rate. Current legislation addresses the supply side of the problem, but not the demand side of the problem. Consumer education may be a feasible approach for addressing the demand side of the problem. Resource: • http://en.wikipedia.org/wiki/Demand Analysis # References. • Subject Material “Managerial Economics”.  Author(s):Pamela S. No rum, (Department of Management, University of Missouri, and Columbia, Missouri, USA), Angela Cuneo, (North central University, and Prescott Valley, Arizona, USA) Citation: Pamela S. No rum, Angela Cuneo, (2011) "Analysis of the demand for counterfeit goods", Journal of Fashion Marketing and Management, Vol. 15 Iss: 1, pp.27 - 40