Factors determining demand, approaches to marketing, and economic perspective of business case

Contents
Question 1: You Are What you Buy................................................................................................1
QUESTION 2: The economic Perspective of a Business Case.......................................................2
Question3 Cross Price Elasticity of Demand...................................................................................8
Bibliography..................................................................................................................................10

Question 1: You Are What you Buy
a) Factors determining the demand
Changes in Tastes and Preferences of consumers
As baby boomers ages, their tastes and preferences change. Goods that would be required earlier
may not be required so. For example, as baby boomers age, their intake for alcohol many change
and they ay not consumer alcohol in quantities that they would have consumed previously. This
could affect every area of the market. (Mankiw 2008) A change in tastes and consumers can
work both ways. If the change in tastes and consumer reduces the demand for a brand or a
product, then the demand curve would shift towards the left.
Population Shift
As the composition of the population changes, the demand for goods and services will change
too. Thus, the demand in this case, has shifted due to a shift in population. The demand could be
a shift in the use of brands or in the products demanded themselves. For example, in Japan, adult
diapers sell in greater quantities than baby diapers. (Pasick 2013) This boom in adult diapers has
been brought about by a rapidly ageing population. This could be a reality in Australia too.
Another example of demand being determined by population is the preferred size of daily
products. It is possible that baby boomer were previously daily items in bulk because they lived
with their families. However, as baby boomers age and their children no longer live with them,
there would be a shift in the size of the products that they would buy.
a) Approaches to marketing
Out of the given approaches, I would go with the approach set by Nick Goddard and follow up
with the research on Baby Boomers. This research could be original research conducted by the
Company or the research that is already available. If the research is brand specific, then market
research will have to be conducted. If a general idea of the tastes, preferences and demographics
regarding consumers is required, then already available research would come in handy.

This is simply because, the research will not only provide a direction but also, an idea of the
underlying causes behind the purchases of consumers. This may help account for cultural
differences, age differences, gender related differences and more. (Salai and Kovač 2011)
Every human is subject to inherent biases and is subject to their perceptions of the daily
phenomenon. These biases can be responsible for taking wrong decisions, when decisions are
taken without any research. (Hochma 2013) Marketing costs are generally very high, hence,
targeted marketing improves the efficiency of capital put in for the purpose of marketing.
In the absence of research, marketing would be done on a trial and error basis. This would
increase the costs for the firm as well as increase the chances of severe consequences such as the
Company losing market share or more. Hence, the preferable approach to marketing would be to
conduct market research or make use of the available market research. (Zenger 2015)

QUESTION 2: The economic Perspective of a Business Case
Article Source: (Redrup 2018) The Australian Financial Review
Taxify claims flying start in Aussie Uber battle
He said Taxify had a long-term goal of being a minimum of 5 per cent cheaper for users than Uber.
Taxify was founded in 2013 by Estonian teenager Markus Villig, who saw a gap in the market to
introduce competition in markets where there was a ride-sharing monopoly and give drivers a higher
commission.
Globally the business has 5 million riders in 20 countries and is the leading player in a range of European
and African countries. Taxify will turn its attention to Brisbane next, where it hopes to launch in the next
four to six weeks. Meanwhile Indian Uber competitor Ola started operating in Melbourne last Thursday, a
month after its launch in Sydney.
The Softbank and Tencent-backed company claims to have doubled its drivers from 7000 to 15,000 over
the last months, putting it just behind Taxify in terms of its share of the driver market.
Crowded market
Like Taxify, it also enters new geographies by offering aggressive discounts to get customers to sign up.
Mr Raciti said he believed there was space in the Australian market for three players in the short-term.
"From what we've learned in other markets, with a market the size of Australia there is room for three players
to operate and be healthy for the next two to three years, but looking at five years is a long time in start-up
land," he said.
Ms McEncroe said the added competition would also ensure the sector was more accountable to its drivers
and riders.
"As we provide ride-sharing services to women and children, we're going after a completely different market
to other ride shares and wouldn't classify them as our competitors. Our services go beyond ride sharing by
offering an income revenue to support women as well as a safe mode of transport."
Shebah now has 890 drivers nationally and it has completed 25,000 trips since March last year.
Australian operator GoCatch also operates in the space, but has decided to target corporate clients as its main
strategy.
Despite a tumultuous few years, GoCatch is attempting to drum up support for an IPO this year.