Advertisement elasticity of demand on sale of two wheeler

8/14/2019 Advertisement elasticity of demand on sale of two wheeler

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Presentation onAdvertisement elasticity of demand onsale of two wheeler

Prepared by: Nidhi MaheshwariSwati S

Dhaval Modi

Vatsal PastagiyaAbdul Salot

Shreyash Doshi

Submitted to:

Mr. Vikas Singh


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Focus

Definition of Elasticity Calculating Elasticity Introduction of Advertising Advertisement Elasticity of Demand Calculation Of AED Impact of AED Value

Media Alternatives Types of promotion Advertisement Advertisement Elasticity


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Calculating Elasticity


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Calculating Elasticity cont

Arc Approach:

Elasticity={[Q2-Q1]/avgQ}/{[P2-P1]/avgP

% change in qty = (1.44-1.5)/1.47 = -4.1%

% change in price = (1.10-1)/1.05 = 9.5%

Elasticity=-4.1%/9.5%

=-0.432


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Calculating Elasticity cont

Point approach:

Elasticity={[Q2-Q1]/Q1}/{[P2-P1]/P1}

% change in qty = (1.44-1.5)/1.5= -4%

% change in price = (1.10-1)/1= 10%

Elasticity=-4%/10%=-0.4


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Introduction of advertising

Advertising is a form of communication that typically attempts to

persuade potential customers to purchase or to consume more of a

particular brand of product or service.

Advertisements are seen on the seats of shopping carts, on the walls

of an airport walkway, on the sides of buses, and are heard in

telephone hold messages and in-store public address systems.

Advertisements are often placed anywhere an audience can easily or

frequently access visual, audio and printed information.


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Advertisement Elasticity of Demand

Advertising elasticity of demand is the measure of

how advertising affects the demand of a certain

product. It is the percentage change in the sales of

the advertised product as opposed to the percentage

change in its advertising expenses.


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Calculating Elasticity

Formula

% change in demand% change in advertising expenditure

The calculation of the AED will produce avalue. This value will indicate some of the

characteristics of the goods.


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Impact of AED Value

A value over 1 implies a relatively elastic demand. In

other words, an increase in the level of advertising

will cause a greater increase in the demand for the

good.

A value less than 1 implies a relatively inelastic

demand. In other words, an increase in the level of

advertising will cause a proportionately smaller

increase in the demand for the good.


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Media Alternatives

Mass Media aimed at total markets:

NewspapersTelevision

Specific market media forms:

Radio

Magazines

Direct mail

Internet


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Advertisement

DHRU Automobiles

Free service

Discount coupon

Scheme

Place

Passport

SIDDHI Automobiles

Free service

No discount coupon

Less scheme

Place


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Advertisement elasticity

Month 2007

(Rs.)

SELL

APRJUN 150000 1459

JULYSEP 150000 1380

OCTDEC150000 1706

JANMAR 150000 1469

TOTAL 600000 6014

DHRU Automobiles


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Advertisement elasticity cont

Month 2007(Rs.)

SELL 2008(Rs.)

SELL

APRJUN 150000 1459 200000 1520

JULYSEP 150000 1380 200000 1444

OCTDEC 150000 1706 200000 1869

JANMAR 150000 1469 200000 1505

TOTAL 600000 6014 800000 6338

DHRU Automobiles


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Month 2007(Rs.)

SELL

APRJUN 100000 1032

JULYSEP 100000 1134

OCTDEC 100000 1309

JANMAR 100000 1102

TOTAL 400000 4577

SIDDHI Automobiles


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Month 2007(Rs.)

SELL 2008(Rs.)

SELL

APRJUN 100000 1032 150000 1095

JULYSEP 100000 1134 150000 1200

OCTDEC 100000 1309 150000 1500

JANMAR 100000 1102 150000 1200

TOTAL 400000 4577 600000 4995

SIDDHI Automobiles


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THANK YOU

Documents

Advertisement elasticity of demand on sale of two wheeler