Substitute good

The cross-price elasticity of demand is defined as the percentage change in quantity demanded of one good divided by the percentage change in the price of a related good. If the two goods are substitutes, an increase in the price of one will lead to an increase in the quantity demanded of the other; if they are complements, an increase in the price of one will lead to a decrease in the quantity demanded of the other. The Law of Demand states that there is a negative relationship between a good's

demanded goes down.          2. As price goes down, quantity demanded goes up.          3. Why more is bought as price drops.              a. Income Effect: as the price of a good drops, consumers feel richer and buy more.              b. Substitution Effect: as the price of a good drops, it becomes cheaper relative to other goods and consumers buy more. DEMAND AND PRICE For virtually all products demand increases as price falls and vice versa Demand for Mars Bars in a

Supply Topic 3: Elasticities of Demand & Supply Chapter 3 Elasticities of demand and supply (Chapter 4 Begg et. al, Chapter 3, Turley et. al.) TOPIC 3 The price elasticity of demand …measures the sensitivity of the quantity demanded of a good to a change in its price It is defined as: % change in quantity demanded % change in price Sandra.kelly@itcarlow.ie Sandra.kelly@itcarlow.ie Economics Year 1 TOPIC 3 Page 1 Economics Year 1 Topic 3: Elasticities of Demand & Supply

product the company should assure that the raw materials are delivered to the factories in dietetically and legally approved condition. This is to do with the general quality of the product. Perhaps in order to skip the unnecessary stock hold it can be a good idea to export the produced product directly to the targeted markets, based on company and its local distributor’s agreements on required quantity. Operations In terms of operations it is essential to provide a smooth product distribution within

traditional retails or to use substitutes. Thus, their power of negotiation is important. Threats of Substitutes: The threat of the arrival of substitute products depends on the possibility of replacement of existing products by new products. These products have to fill the same functions as the existing products or satisfy the same needs expressed by the customers (Management Stratégique by ulrike Mayrhofer edition Breal p16). Internet has created many substitutes threats to conventional retailers

Business Plan ------------------------------------------------- Concept Développer un concept de snacking sain (ou fast good) nommé Piadinando, et spécialisé dans la production et la commercialisation de Piadinas. Histoire : Il s'agit d'un plat typique de la sous-région de Romagne (Italie), anciennement appelé pain des pauvres est actuellement très apprécié des locaux comme des touristes. Dans les années 50', le long de la côte adriatique, les gens achetaient leur piadina dans des

Wholesale Corporation Nowadays : One of the largest retail store in the industry Business model High sales volume Rapid inventory turnover Very low prices Restricted choice A differenciation low-costs STRATEGY Membership-based system Low prices & Good quality products Optimized distribution costs Limited selection of products Low level of Advertising Decentralized management Warehouse locations External analysis Main figures about the wholesales industry 120 billion $ in USA (2008) Growth 20%

complements OR Strategic substitutes 2. How a rival’s profits are affected by a firm’s action Tough OR Soft Strategic Complements • When a firm’s action induces the rival to take the same action • Examples: • Bertrand price competition • Advertising competitor’s price cut • A price cut is the profit maximizing response to • Intensive advertising is the profit maximizing response to a marketing blitz by a competitor (often) Strategic Substitutes • • When a firm’s action

Economical, Natural, Technological, Political, Cultural, Legal forces) ……………………………………………………………………………………………………………………………………………..3 1.2. The industry 4 1.2.1. Rivalry among existing competitors 4 1.2.2. Threat of new entrants 4 1.2.3. Threat of substitute products 4 1.2.4. Bargaining power of suppliers 4 1.2.5. Bargaining power of buyers 4 1.3. The firm 4 1.3.1. The company mission 4 1.3.2. The company objectives and goals 4 1.3.3. The business portfolio 5 1.4. The marketing Process for

with your competitors but you’re also in a fight for profit with an extended set of actors […] (The competition goes beyond established industry rivals to include four other competitive forces as well: customers, suppliers, potential entrants, and substitute products) The five forces are a kind of holistic way of looking at any industry, and understanding the structure underlying drivers of profitability and competition. 2 – I use these to think about my rival makes it difficult for me…: There