Panasonic microwave Essay Example
Price, Cross & Income Elasticity
The demand for Panasonic Microwave gets affected due to the different elasticity which is seen in the market. An increase in the price of Panasonic Microwave affects the price elasticity which thereby reduces the demand for microwave. Increase in the price means that the disposable income or the purchasing power of money reduces which thereby makes less product to be purchased from the same and an increase in the price will reduce the demand and supply as Panasonic Microwave is considered as a luxurious product (Garg, 2010).
On the other hand while considering the cross elasticity of demand the demand for Panasonic Microwave gets affected when new innovation or developments results in some other products being available in the market (Garg, 2010). This shifts the focus of the customers towards the product and makes people purchase other product thereby having an impact on the demand and supply of Panasonic Microwave.
In a similar manner an increase in the income increases the disposable income in the hands of the people and brings a shift in the class of population having different income. It results in certain section of the society to spend more income on luxurious items like Panasonic Microwave thereby increasing the demand for the same which also has an impact on the demand and supply of Panasonic Microwave (Garg, 2010).
Thus, changes in the elasticity through different factors have an impact on the demand and supply of Panasonic Microwave which thereby impacts the future prospect and is an important component that has to be considered while looking to forecast the future requirements.
Market Competitors, Size & Growth
The degree of competition which Panasonic Microwave faces is very stiff due to the presence of different players like Samsung, LG, Godrej, Kelvinator, and so on. The degree of competition intensifies as the product being offered by other companies is similar and there is little difference between the offerings. This is matched by the fact that the prices are similar and each and every players focuses on advertising or brand name of some additional features to attract customers towards their products (Colell, Winston, Michael & Jerry, 2005). This has increased the level of competition to a very high extent and requires that Panasonic Microwave looks at attracting people by offering something extra.
The intensifying competition has slowed the pace at which Panasonic Microwave is growing and shows that Panasonic Microwave is growing at a pace of 10%. The growth is slow but is due to the fact that there are a large number of players in the market. Further Panasonic Microwave has around 12% market share which shows the fact that Panasonic Microwave is growing at a pace where they are able to ensure that they have the required market share and are able to maintain it (Colell, Winston, Michael & Jerry, 2005).
The marker size for Panasonic Microwave is 12% of the total market size and is constant. This highlights that despite intensifying competition Panasonic Microwave has been able to develop strategies through which they are able to ensure growth and will thereby be able to formulate strategies which will help them to improve their performance in the future and provide better opportunity of growth.
Colell, M., Winston, A., Michael, D. & Jerry, R. 2005. Microeconomic Theory. 3r Edition, New York, Oxford University Press, Pearson Education
Garg, S. 2010. Microeconomics: Introductory. 7th edition, pp 3.11-9.17, Dhanpat Rai Publication
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