Estimation of demand of orange market experimentation

1. Estimation of Demand of Orange
Market Experimentation
Presented by:-
Utkarsh Saxena

2. Introduction
Market experimentation of demand of 3 types of Oranges,
Florida Indian river, Florida interior and California
orange.
 Grand rapid had best sited demographics and conditions
for demand estimation.
 Nine super markets.
31 Consecutive days.
 Price change within 16 Cents.
 Adequate supply.

3. Price Elasticity
Elasticity is the measure of responsiveness of one variable
to another.
The greater the elasticity, greater the responsiveness.
 Price elasticity of demand is % change in quantity
demanded individual by the % change.

4. Demand Estimation
Estimation the amount of demand for a product or service.
Demand estimation for the firm’s product is essential and
continuing.
Estimation demand provide manager with accurate way
predict the future demand.

5. Cross Price Elasticity Of Demand
Cross price elasticity measured the responsiveness of
demand for good X and change in the price of good Y.
Measured to which degree of good is a substitute or
complementary.
Cross price elasticity of demand b/w two complementary
goods is negative.

6. Market Experimentation
Method of demand estimation.
Experiments conducted in market place.
Record the responses of consumer.
Select several market whit similar demographics.

7. Observations
Price elasticity for orange is fairly high. Ed for FIO of
3.07 indicate that 1% inc in price lead to 3.07% decline
in demand.
Cross price elasticity of demand b/w two type of florida
orange where large than 1 close to 0 with respect to
californian orange.

8. Learning Outcomes
For 1% change in price of florida indian orange ,there is a
considered high change in demand for florida interior and
vicevesa.
There for this suggest the consumer regard the two type of
orange of Florida as close substitute, they did not view
California orange.

9. Q 1. In light of the case define a test market? When should a
firm take help of market experiments to forecast demand?
Ans:-Test Market, in the field of business and marketing, in a
geographic region or demographics group used to gauge the viability of
a product or service in the mass market prior to a wide scale roll-out.
The criteria used to judge the acceptability of a test market region or
group includes:
A population that is demographically similar to the proposed target
market and relative isolation from densely populated media markets
so that advertising to the test audience can be efficient and
economical.

10. Thank You