Demand Analysis of Eveready Pencil Cell

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

CHANDAN PAHELWANI 11048

HIMANI PARIHAR 11050

SUBMITTED TO:

Dr. KINJAL AHIR,

TOLANI INSTITUTE OF MANAGEMENT STUDIES, ADIPUR

SENIOR LECTURER, TIMS

INDEX

SERIAL NO. CONTENT PAGE NO.

1. Introduction 3

2. Factors affecting the demand 5

3. Elasticity

a. Price elasticity

b. Income elasticity

c. Cross competitive elasticity

d. Cross complementary elasticity

9

4. Bandwagon effect/ Snob effect 16

5. References 17


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 St.Louis, Missouirs, United States. The key

people in it is Ward m. Klein, 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 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.


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

(7) Geographical area

(8) Brand image

(9) Technology


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.


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 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 product’s 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 :-

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:

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:-

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 elasticity

Ep2 = Decrease in price elasticity


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


= 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

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

= 1.62

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:-

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 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

= 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 Quanity

50(P1) 25(Q1)

100(P2) 20(Q2)

150(P3) 15(Q3)

Ec1 = Increase in complementary products

Ec2 = Decrease in complementary products

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


(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.

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


http://WWW.Google.com/

http://WWW.Fundinguniverse.com/company_histories

http://WWW.Evereadyindustries.com/

Demand Analysis of Eveready Pencil Cell

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