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Final Demand Analysis of Cadbury Dairy Milk
Final Demand Analysis of Cadbury Dairy Milk
ON
Submitted To :
Group Members :
1. Nikunj Malaviya
( Roll No.:86)
2. Nikhil Samani
3. Amin Pattani
4. Kapil Buddhadev
Introduction:
The first eating chocolate recipe was developed by Dr. Hans Sloane, on his
traveling to South America where he had focused on cocoa and food values. From
this recipe Cadbury had introduced the milk chocolates.
The Cadbury dairy milk was first introduced in UK in 1905 and then it was
introduced in India in 1948. Cadbury Dairy Milk has been the market leader in the
chocolate category for years and has been a part of every Indian's moments of
happiness, joy and celebration. Today, Cadbury Dairy Milk alone holds 30% value
share of the Indian chocolate market.
Income: If the income of the people increases, the demand of the product also
increases and if the income of the people decreases, the demand of the product
decreases because then people will go for lower price chocolate like clair or melody
of Rs.1 or Rs. 2. So, there is a positive relationship between income and the product
demand.
(Source: Survey Result)
Population & Age group: This product is meant for the children, adults and
also for the old people so the age groups are not much affected the demand of the
product so demand remain same and by the increase in the population, the demand
of the product also increases.
(Source: Group Discussion)
Brand Image: The brand image of the Cadbury plays an important role in the
demand of the Cadbury. This product has built such a brand image that it has much
attracted the mind of the consumers so they will not like to switch over to the other
brand.
Competition: There are many competitors like Cadbury 5-star, Nestle KitKat, parle chox, foreign chocolates (Chinese Chocolates), lotee etc. in the market so
if the price of the competitors increases, the demand of the dairy milk also increases.
But if the price of the competitors decrease, the demand of the dairy milks not much
affected by it.
(Source: Survey Result)
Price of Complementary Goods: Cadbury dairy milk is made from the milk,
sugar, cocoa bean and cocoa powder. If the price of these complementary goods
increases then there will be no change in the demand. Because Cadbury dairy milk is
a brand loyal product so there will not be any effect on the demand of the product.
(Source: Group Discussion)
PRICE ELASTICITY
Our product is a brand loyal product so if we increase our price by 20% then demand
of our product will decrease by 5% that means elasticity of price is <1. So, our
product is less elastic. (If we increase the price by Rs. 1 then demand will fall by 5
pc per 100 pc)
7
EP = Qd . P
Px
=
5 .
5
1
100
6
5
4
P 3
R 2
I
1
C
E
0 90 95 100
105
110
115
120
= 0.25
Demand
[Our Products price elasticity is <1 because our product is in monopolistic market]
INCOME ELASTICITY
If the income rises by 20% then the demand will rise by 10% the curve is positively
sloped means that elasticity of Income is >0 and <1.
(When the average income was Rs. 10,000 and demand was 100)
EI = Qd . I
Ix
=
10
. 10000
2000
100
14
13
12
I 11
N 10
C 9
O 8
M
E
= 0.50
0
120
EXY = QX . PY
PY QX
=
8 . 5
1
100
7
6
5
4
P 3
R 2
I 1
C
E
= 0.4
0 90 95 100
105 110
Demand
115
120
Py2-Py1
Qx2+Qx1
108-100 .
6+5
6-5
108+100
0.42
(Source: From consumers survey)
In the Short run period of time, the demand for the dairy milk is less
elastic because if the price of the dairy milk chocolate suddenly increases Rs.5 to
Rs.7, than the demand of the product will also decrease but in the long run the
demand may not be much affected.
There are some criteria that also affects and they are like:
In the Long run period of time, the demand for the dairy milk is more elastic
because if the price of the dairy milk in the 2005 was Rs.5 and in the 2010 it will be
Rs.10 and, the quantity and the quality will remain the same and the other products
also like Kit-Kat and Munch, if they dont change any of the things like price,
quality and quantity than it will greatly affect the demand of the dairy milk and it
will started decreasing day by day.
Assumptions:
Snob Effect:
This is a kind of totally contra effect of the band wagon effect. If a person bought
one particular product then the other person wants superior product than the person
had already bought. But in our product the demand does not affect by the snob
effect.