A GROUP PROJECT FOR MANAGERIAL ECONOMICSON DEMAND ANALYSIS OF EVEREADY PENCIL CELL                   SUBMITTED BY:  NAMES ...
SENIOR LECTURER, TIMS                                   INDEXSERIAL NO.                    CONTENT                     PAG...
INTRODUCTIONIn our home if remote control stops working or clock stops ticking and thereason for it is pencil cell then th...
the same product. The Eveready has his manufacturing units all over the India.Not only that they are manufacturing at a hi...
 Factors affecting the demand :-• Main variables:-(1) Price(2) Income of consumers(3) Price of competitive goods• Other V...
(7) Geographical area(8) Brand image(9)      Technology      TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR   Page 6
 MAIN VARIABLE :-(1)Price:-         In today’s world, price is the most important factor for the  consumer while buying a...
 Other Variables:-  (1)   Durability :-           The duration of eveready pencil cell is approximately 3 months in  the ...
works on pencil cells. During vacation period children mostly spendtheir time in playing with their toys which again works...
(8)Brand image :-           The brand image of the product plays a vital role in the demand     of the product. The brand ...
Ep:   (Q2-Q1)/[(Q2+Q1)/2]                     (P2-P1)/ [(P2+P1)/2]                Price Per Piece             Quantity Dem...
= 1.31Ep2   =        Q3 – Q2 x P3 + P2               Q3 + Q2 x P3 - P2      =        11 – 12 x 10 + 9               11 + 1...
Ey1 = Increase in income elasticity  Ey2 = Decrease in income elasticity  Ey1 = Q2 – Q1 x Y2 + Y1      Q2 + Q1 x Y2 - Y1  ...
= 0 x 28500        24 x -15000      = 0 (no effect)   C. CROSS ELASTICITY:-            Cross elasticity of demand has two ...
Q2 + Q1 x P2 – P1   = 12 – 13 x 9 + 8     12 + 13 x 9 - 8   = -1 x 17     25 x 1   = 0.68Ec2 = Qx3 - Qx2 x Pz3 + Pz2     Q...
(2) Complementary goods:- In it there is direct relation betweenprice of complementary goods and quantity of our product a...
Ec2 = Q3 – Q2 x P3 + P2      Q3 + Q2 x P3 – P2    = 15 – 20 x 150 + 100      15 + 20 x 150 - 100    = -5 x 250      35 x 5...
Suggestions:-According to our survey it is clear that the price of this product isreasonable comparative to others and com...
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Demand analysis of eveready pencil cell

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Demand analysis of eveready pencil cell

  1. 1. A GROUP PROJECT FOR MANAGERIAL ECONOMICSON DEMAND ANALYSIS OF EVEREADY PENCIL CELL SUBMITTED BY: NAMES ROLL NO. RITESH ASHAR 11002 NIKITA BALI 11004 NEETHI NAIR 11044 CHANDAN PAHELWANI 11048 HIMANI PARIHAR 11050 SUBMITTED TO: Dr. KINJAL AHIR, TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 1
  2. 2. SENIOR LECTURER, TIMS INDEXSERIAL NO. CONTENT PAGE NO. 1. Introduction 3 2. Factors affecting the demand 5 3. Elasticity 9 a. Price elasticity b. Income elasticity c. Cross competitive elasticity d. Cross complementary elasticity 4. Bandwagon effect/ Snob effect 16 5. References 17 TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 2
  3. 3. INTRODUCTIONIn our home if remote control stops working or clock stops ticking and thereason for it is pencil cell then the brand name which comes first in our mindsis “EVEREADY”.It was founded on 1896 (as the American Electrical Novelty & Manufacturingcompany). Its headquarters are in St.Louis, Missouirs, United States. The keypeople in it is Ward m. Klein, CEO.Energizer Holdings Inc, formerly known as Eveready Battery Company, Inc. isthe largest manufacturers of dry cell batteries and global leader in thedynamic business of providing portable power.Since 1913 the Union Carbide and Carbon Corporation took over eveready andthe marketing of this pencil cell was started.Eveready has a wide distribution network all over the country with 15branches 40 godowns and around 4000 distributors. The Eveready pencil cellsare available at all small and big shops right from the general stores, grocerystore, music store, stationery stores , gifts and novelty stores, photo studiosand printing centers. Not only that even a small “PAAN VALA” are also selling TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 3
  4. 4. the same product. The Eveready has his manufacturing units all over the India.Not only that they are manufacturing at a high speed. The manufacturing unitsof Eveready ISO 9000 and ISO 14000 certified.Just the figure of sales are enough to know the performance of a company i.eannual sales 92,530.74 (Rs. Lakh). It has value of Rs.6.5 add in it VAT 12.5%which gives the rate of Rs.9 in the market.Eveready Battery Co. changed its name to energizer holdings Inc. and was tobecome a public co. listed on the NYSE in April 2000. TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 4
  5. 5.  Factors affecting the demand :-• Main variables:-(1) Price(2) Income of consumers(3) Price of competitive goods• Other Variables:-(1) Durability(2) Availability(3) Advertisement(4) Season(5) Brand ambassador(6) Government Policy TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 5
  6. 6. (7) Geographical area(8) Brand image(9) Technology TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 6
  7. 7.  MAIN VARIABLE :-(1)Price:- In today’s world, price is the most important factor for the consumer while buying a certain product and the price of our product is quite reasonable. If the price of increases then also there is no effect in the demand.(2)INCOME OF CONSUMER :- When the income of the consumer increases then the demand of complementary products is increased and so our product is used for the same reason. If the income decreases then there is no effect because people use it as the basic necessity in the products like wall clocks and remotes.(3)PRICE OF COMPETITIVE GOODS :- When the price of competitive goods increases then the demand of product increases. When the price of competitive goods decreases then people still continue to purchase it due to its brand image in the market. TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 7
  8. 8.  Other Variables:- (1) Durability :- The duration of eveready pencil cell is approximately 3 months in the products like wall clocks, remotes and 15 days in the products such as toys, cameras according to their regular use, as per our survey. (2)Availability :- It is easily available in all the shops whether it be a small shop or a general provision store. Its availability is one of the most important factor that affects the sales of our product. (3)Advertisement :- The advertisement of this branded product can be easily seen on most of the leading channels viewed on television. The product is being advertised on a large scale . (4)Season :- During monsoon season there is more of power cut problems due to heavy rains and it is not possible for every Indian family to have a invertor in their homes, so the best option for them is torch which TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 8
  9. 9. works on pencil cells. During vacation period children mostly spendtheir time in playing with their toys which again works on pencil cells.(5)Brand Ambassador :- The brand ambassador of this product is Mr. Akshay Kumar, thewell-known Bollywood Actor and celebrity. As he is a well-knownpersonality the product takes the advantage of his goodwill andreputation to increase the product’s sales.(6)Government Policy :- Taxes will obviously have a direct impact on the demand of theproduct. Increase in taxes result into increase in prices of the productand resulting into decrease in the demand of the product.(7)Geographical area :- The geographical area or location is a important key in demand ofthe product. As per the globalization the technology is reached in everycorner or part of the world. Now a days people are using television,music system, camera and other gadgets etc so the demand of thebatteries are also increasing there. TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 9
  10. 10. (8)Brand image :- The brand image of the product plays a vital role in the demand of the product. The brand image of the product is very good. This product is in market since many years when there had been no such competitors, so people trust this product due to its goodwill in the market owned by the product. (9)Technology :- As there is advancement in technology, that would affect the demand our product i.e. increase in quality of the product, its durability will improve.(3)ELASTICITIES: A. PRICE ELASTICITY :- The price elasticity of demand is percentage change in demand divided by percentage change in price. Price elasticity of demand measures the willingness of consumer to buy at the price available. Formula:- TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 10
  11. 11. Ep: (Q2-Q1)/[(Q2+Q1)/2] (P2-P1)/ [(P2+P1)/2] Price Per Piece Quantity Demanded (Pieces) A. Rs. 8 (P1) 14 (Q1) B. Rs. 9 (P2) 12 (Q2) C. Rs. 10 (P3) 11 (Q3)Ep1 = Increase in price elasticityEp2 = Decrease in price elasticityEp1 : Q2 – Q1 x P2 + P1 Q2 + Q1 x P2 – P1= 12 – 14 x 9 + 8 12 + 14 x 9 – 8 =-2 x -17 26 x 1 =-34 26 TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 11
  12. 12. = 1.31Ep2 = Q3 – Q2 x P3 + P2 Q3 + Q2 x P3 - P2 = 11 – 12 x 10 + 9 11 + 12 x 10 – 9 = -1 x 19 23 x 1 = -19 23 = 0.83 B. INCOME ELASTICITY: Income elasticity and demand both have direct relation between them. If income increase the demand of the quantity also increase and if income decrease also decrease and it has always positive relation in demand of income elasticity. Income Quantity of Demand A Rs.13500 12 B Rs.15000 12 C Rs.16500 14 TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 12
  13. 13. Ey1 = Increase in income elasticity Ey2 = Decrease in income elasticity Ey1 = Q2 – Q1 x Y2 + Y1 Q2 + Q1 x Y2 - Y1 = 14 – 12 x 16500 + 15000 14 + 12 x 16500 – 15000 =2 x 31500 26 x 1500 = 63000 39000 = 1.62Ey2 = Q3 – Q2 x Y3 + Y2 Q3 + Q2 x Y3 – Y2 = 12 – 12 x 13500 + 15000 12 + 12 x 13500 – 15000 TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 13
  14. 14. = 0 x 28500 24 x -15000 = 0 (no effect) C. CROSS ELASTICITY:- Cross elasticity of demand has two factors and they are competitive goods and complementary goods. (1)Competitive goods:- In it the price of competitive goods and quantity of our product has inverse relationship and it has always positive demand. Competitor Quantity price Demanded 8(P1) 13(Q1) 9(P2) 12(Q2) 10(P3) 11(Q3)Ec1 = Increase in competitive productsEc2 = Decrease in competitive productsEc1 = Q2 - Q1 x P2 + P1 TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 14
  15. 15. Q2 + Q1 x P2 – P1 = 12 – 13 x 9 + 8 12 + 13 x 9 - 8 = -1 x 17 25 x 1 = 0.68Ec2 = Qx3 - Qx2 x Pz3 + Pz2 Qx3 + Qx2 x Pz3 – Pz2 = 11 – 12 x 10 + 9 11 + 12 x 10 – 9 = -1 x 19 23 x 1 = -19 23 = 0.83 TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 15
  16. 16. (2) Complementary goods:- In it there is direct relation betweenprice of complementary goods and quantity of our product and ithas always negative demand. Price Quanity 50(P1) 25(Q1) 100(P2) 20(Q2) 150(P3) 15(Q3)Ec1 = Increase in complementary productsEc2 = Decrease in complementary productsEc1 = Q2 – Q1 x P2 + P1 Q2 + Q1 x P2 – P1 = 20 – 25 x 100 + 50 20 + 25 x 100 - 50 = -5 x 150 45 x 50 = -750 2250 = -0.33 TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 16
  17. 17. Ec2 = Q3 – Q2 x P3 + P2 Q3 + Q2 x P3 – P2 = 15 – 20 x 150 + 100 15 + 20 x 150 - 100 = -5 x 250 35 x 50 = -0.714(4) Bandwagon effect/ Snob effect:-In this case its bandwagon effect, it means the people attitudetowards the product depends upon the word of mouth.According to our group survey, the customers of our product isaffected by bandwagon effect. The word of mouth is the affectgiven by the customer. Mostly people convince themselves byother people view about the product. The reasons given by thecustomers for the use of this product is its durability, efficiency andlong life of the battery. TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 17
  18. 18. Suggestions:-According to our survey it is clear that the price of this product isreasonable comparative to others and comparing to thecompetitive product it gives a good outcome in its durability.It has also been suggested by our consumer that there should be animprovement in the packing and it should be more attractive.Consumers also suggest that the company should keep a scheme sothat the product is advertised on a large scale and it would alsoattracts other buyers to purchase the product. Like collaboratingwith the companies producing clocks, toys, cameras, etc. and allother companies who sell the products which run on pencil cells togive Eveready pencil cells to the customers who buy such products.REFERENCES :-WWW.Evereadyindustries.comWWW.Fundinguniverse.com/company_historiesWWW.Google.com TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR Page 18

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