A GROUP PROJECT FOR MANAGERIAL ECONOMICS ON DEMAND ANALYSIS OF EVEREADY PENCIL CELL

SUBMITTED BY: NAMES ROLL NO. RITESH ASHAR 11002 NIKITA BALI 11004 NEETHI NAIR 11044

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CHANDAN PAHELWANI 11048 HIMANI PARIHAR 11050 SUBMITTED TO: Dr. KINJAL AHIR, SENIOR LECTURER, TIMS

INDEX SERIAL NO. 1. 2. 3.

Introduction Factors affecting the demand 3 5 9

CONTENT

PAGE NO.

Elasticity
a. Price elasticity b. Income elasticity
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c. Cross competitive elasticity d. Cross elasticity complementary

4. 5.

Bandwagon effect/ Snob effect References

16 17

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INTRODUCTION

In our home if remote control stops working or clock stops ticking and the reason for it is pencil cell then the brand name which comes first in our minds is EVEREADY. It was founded on 1896 (as the American Electrical Novelty & Manufacturing company). Its headquarters are in CEO. Energizer Holdings Inc, formerly known as Eveready Battery Company, Inc. is the largest manufacturers of dry cell batteries and global leader in the dynamic business of providing portable power. Since 1913 the Union Carbide and Carbon Corporation took over eveready and the marketing of this pencil cell was started. Eveready has a wide distribution network all over the country with 15 branches 40 godowns and around 4000 distributors. The Eveready pencil cells are available at all small and big
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St.Louis,

Missouirs, United States. The key people in it is Ward m. Klein,

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shops right from the general stores, grocery store, music store, stationery stores , gifts and novelty stores, photo studios and printing centers. Not only that even a small PAAN VALA are also selling 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 units of Eveready ISO 9000 and ISO 14000 certified. Just the figure of sales are enough to know the performance of a company i.e annual 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 to become a public co. listed on the NYSE in April 2000.

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 Factors affecting the demand : Main variables:(1) (2) (3) Price Income of consumers Price of competitive goods

Other Variables:(1)

Durability Availability Advertisement

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(2) (3)

(4) (5) (6) (7) (8) (9)

Season Brand ambassador Government Policy Geographical area Brand image Technology

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 MAIN VARIABLE :(1) Price:In todays 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.

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 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 :-

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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 works on pencil cells. During vacation period children mostly spend their 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, the well-known Bollywood Actor and celebrity. As he is a well-known personality the product takes the advantage of his goodwill and reputation to increase the products sales.

(6) Government Policy :Taxes will obviously have a direct impact on the demand of the product. Increase in taxes result into increase in prices of the product and resulting into decrease in the demand of the product.

(7) Geographical area :-

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The geographical area or location is a important key in demand of the product. As per the globalization the technology is reached in every corner or part of the world. Now a days people are using television, music system, camera and other gadgets etc so the demand of the batteries are also increasing there.

(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:

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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:E p: (Q2-Q1)/[(Q2+Q1)/2] (P2-P1)/ [(P2+P1)/2]

Price Per Piece

Quantity (Pieces)

Demanded

A Rs. 8 (P1) . B Rs. 9 (P2) . C Rs. 10 (P3) .

14 (Q1) 12 (Q2)

11 (Q3)

Ep1 = Increase in price elasticity Ep2 = Decrease in price elasticity

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Ep1 :

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 = 1.31

Ep2 =

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
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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 A B C Rs.135 00 Rs.150 00 Rs.165 00 Quantity of Demand 12 12 14

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

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=2 x 31500 26 x 1500 = 63000 39000 = 1.62 Ey2 = Q3 Q2 x Y3 + Y2 Q3 + Q2 x Y3 Y2 = 12 12 x 13500 + 15000 12 + 12 x 13500 15000 = 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:-

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In it the price of competitive goods and quantity of our product has inverse relationship and it has always positive demand. Competit or price 8(P1) 9(P2) 10(P3) Quantity Demanded 13(Q1) 12(Q2) 11(Q3)

Ec1 = Increase in competitive products Ec2 = Decrease in competitive products

Ec1 = Q2 - Q1 x P2 + P1 Q2 + Q1 x P2 P1 = 12 13 x 9 + 8 12 + 13 x 9 - 8 = -1 x 17 25 x 1 = 0.68 Ec2 = Qx3 - Qx2 x Pz3 + Pz2 Qx3 + Qx2 x Pz3 Pz2
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= 11 12 x 10 + 9 11 + 12 x 10 9 = -1 x 19 23 x 1 = -19 23 = 0.83 (2) Complementary goods:- In it there is direct relation between price of complementary goods and quantity of our product and it has always negative demand. Price 50(P1) 100(P 2) 150(P 3) Quani ty 25(Q1 ) 20(Q2 ) 15(Q3 )

Ec1 = Increase in complementary products Ec2 = Decrease in complementary products

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Ec1 = 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 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

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(4) Bandwagon effect/ Snob effect:In this case its bandwagon effect, it means the people attitude towards the product depends upon the word of mouth. According to our group survey, the customers of our product is affected by bandwagon effect. The word of mouth is the affect given by the customer. Mostly people convince themselves by other people view about the product. The reasons given by the customers for the use of this product is its durability, efficiency and long life of the battery.

Suggestions:According to our survey it is clear that the price of

this product is reasonable comparative to others and comparing to the competitive product it gives a good outcome in its durability. It has also been suggested by our consumer that there should be an improvement in the packing and it should be more attractive.

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Consumers also suggest that the company should keep a scheme so that the product is advertised on a large scale and it would also attracts other buyers to purchase the product. Like collaborating with the companies producing clocks, toys, cameras, etc. and all other companies who sell the products which run on pencil cells to give Eveready pencil cells to the customers who buy such products.

REFERENCES :WWW.Evereadyindustries.com WWW.Fundinguniverse.com/company_histories WWW.Google.com

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