Microeconomics: Study of Individual and Firm Behavior in Decision Making

This document provides an introduction to microeconomics and its relevance in understanding individual and firm behavior in decision making. It discusses market trends, demand generation, and different market conditions. The case of Dove is used to illustrate the concepts discussed.

Microeconomics

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 ...............................................................................................................................................1
TASK 2............................................................................................................................................2
1.2................................................................................................................................................2
TASK 3............................................................................................................................................3
1.3................................................................................................................................................3
TASK 4............................................................................................................................................4
1.4 ...............................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Microeconomics deals with the study of individual and firms behaviour in decision
making and proper allocation of resources. It is mostly associated with the marketing of products
and services or linked with the individual and other economic problems (Baumol and Blinder,
2015). There are various commodity like oil or copper and other products that are more in
demand. It covers long term forces that are driving demand and supply of products and services.
The price and current market trend impact on that products are discussed under this project.
TASK 1
1.1
In the current market trends there are variety of products available in the market with
various specific quality and features. Most of the products are manufactured according to the
demand of the people in the market. So company need to target that market were large number of
interest customers are available those are going to buy that product. On of the product of
Unilever is a Dove which is skin care, hair care and deodorant products offer by the company to
their customers. It is associated with friendly and outgoing nature of products should be offered
to the consumer. The major location captured by the company is that income group which is
going to buy the products in most economical manner. It covers a range of 18-34 years old male
and female, high income group of people and upper class all the comes under the geographical
range of Dove (Moulin, 2014).
Characteristics of Dove:
 It is available in high quality of products as compare to other products of the company.
 Another feature of this product is that can increase their health and well being in perfect
manner.
 It comes in the categories of Moisturising products which includes cleaner than soap, soft
and smooth skin etc.
 Come with affordable price range.
 Comfortable to purchase the product easily from the market.
According to the market trends behaviour of people are varies with taste and preference
of those people those are brand conscious and wants to buy at any cost. With the motive to
provide healthy and emotionally awareness about best quality products are important for the
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people so that they can avail the quality product in there life. As this product is homogeneous
that are produce as per the demand in the market. The quality and specific features of the product
makes it different from other product make it branded consumer goods. It does not have any kind
of quality issues as they are focusing on the superiority to and safety of skins that would not get
damage from this product (Hall and Lieberman, 2012). Some of the facts that are related with
Dove is the commitment to widening the concept of beauty for a women as because they believe
that originality of beauty comes in every age stage, size and shapes. Dove provides an
appropriate range of cleansing and personal care products that are influenced skin care, hair care
and that makes a complete difference to the situations and make your skin more smooth and soft.
TASK 2
1.2
It has been found that Dove has grown from a only soap bar into one of the major product
of Unilever biggest global brand. In current situation of market it is said to be one of the largest
cleansing product in the world. Dove has in recent times encompasses a huge range of products
from bar soap to facial cleansers and other shampoo or conditioners. It has attracted a wide
coverage of media in 2004 from its marketing of the products. Certainly one of the largest
group's most wide demand of this product in recent years as the outcome of a clever marketing
campaign that has regular change the views of the people regarding the product that are offered
by the company that will be of customers demand. Some of the market condition that are impact
the business according to the different market. Like as:
Perfect competition: under this market there is large number of buyer and seller of the
product and according to the customer demand of Dove soap they are offering to them. So the
supply condition in this types of market is freely as there is not any kind of restriction on the
seller and those customers who are going to buy that product. As per the price is concern it more
aggressive because of large number of product offered by the company under the market. There
is least fat margin because of variety in price of different products (Iossa and Martimort, 2015).
Monopoly market: Under this market there is a few number of buyer of the same
product as because of monopoly in price and product demand. There is complete restriction of
enter of new product so supply condition under this market is not that much favourable. The
price is being controlled by the seller as there are few number of sellers available those are
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selling similar product so price will remain constant. There is government restriction in order to
regulate market. They get favourable margin form their sale of products. There is complete
restriction for the new products in the market.
Monopolistic competition: Under this market situations large number of firms are
available and there is a free entry and exit of the products (Rader, 2014). Dove has the chance to
control the price and heavy expenditure is made on advertisement and at this stage product
differentiation is also occurs. Supply of most Dove products are available to the company those
are offer to the customers. Price is aggressive but less as compare to monopoly competition.
Entry mode are restriction as people are brand conscious to increase large economic of scale.
large part is being controlled by the government.
Oligopoly Market: It refer to be that market condition in which few number of seller in a
market, selling differentiated product that are more in demand. There is no variety of goods that
price control are also under the hands of seller. In this procedures price is more aggressive but
controlled by the seller with branded product availability and less government control is there in
the market.
TASK 3
1.3
Market demand generation is done in order to make product simply before releasing it
into the market. A company need to create a proper market research and also to identified
consumer needs and make company a leading position in the global market. Industry would
determine the requirement of the products in the market before, during and after a company
introduce it as new product in the market. There are various aspects that are available in market
which impact the demand of that product. It all done because of quality, price and demand in the
market. Price is that which change the complete scenario of that particular product. The size of
income group are divided into three major categories upper class, middle class and lower class.
The demand of product varies according to income group (Lee, Courtney and Balassi,
2010). Likewise, price elasticity of will be fluctuating at the same time. In case of upper class the
price elasticity of demand for a Dove soap is relatively elastic then, E=< 1, the percentage
change in quantity is higher than the price. It means if price increase the demand fall and vice
versa. In case of middle class group price if the price elasticity of demand for Dove is Elastic
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E= -1 it means percentage change in quantity demanded is equivalent to that in price. In
case of lower segment price elastic is relatively inelastic as E= <0 in which with the change in
price demand of Dove can not varies so much. Dove is the most important product of Unilever
that is made in on the basis to provided a perfect skin to the consumer. It consist of valuable
quality and feature that would provided a perfect product the customers. It is said to be that kind
of product which are mostly favourable to each and every people those are using the product.
The suppliers need to provided some short of discount and advertisement that would help to
attract more customers towards there product. Some changes are to be need in designing of Dove
soap that would draw the attention of the people.
TASK 4
1.4
From above mentioned all the information those are related with microeconomics aspect
are summaries in order to get desire outcome. As it has been observed that according to the
market demand of Dove has made there marketing strategies that would benefit them in coming
future in attracting more customers toward there brands. Unilever is trying different methods and
plan to delivered most attractive product to the customers (Varian, 2014). The company need to
design that products which are made according to the demand of customer or that would satisfied
the needs and wants of the customers. Demand of a product is need not create it varies as per the
demand of people.
On the regular basis changes should be made in current product likewise, Dove is making
so many improvisation in there product that make them valuable in the market in relation to other
product of Unilever. It is always seen that most of the people are waiting for the opportunities to
bring a new product by make some short of innovation in design or price in order to create
opportunities in coming future it will be helpful in achieving growth and maximise profitability
for the company (Dove: Brand Profile. 2017.). Dove is that kind of product which is introduce by
Unilever in order to make personal care more attractive so that most number of people can get
the advantage of using the products. Every business is come with the intention is to earn
maximum profit from their product and services. So it is the market in which the target is to get
maximum profits that can come out from how the company is using its resources in the
manufacturing of products.
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Under the monopolistic competition the chance of entry is easy as there is large number
of buyer available in order to buy the products of company. So it has the great opportunities to
entered into the market with new businesses plan. After analysis of each and every market
monopoly competition market is the one which will provide maximum profit for the businesses
in coming time.
CONCLUSION
From the above project report it has been concluded that microeconomics is that process
that deal with human and other group toward development of product and services which are
manufactured by the company. There are different product with its characteristics that make is
different from other products. All those market competition in which it affect and how price
elastic will affect the demand of a product.
REFERENCES
Books and journals:
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Baumol, W.J. and Blinder, A.S., 2015. Microeconomics: Principles and policy. Cengage
Learning.
Moulin, H., 2014. Cooperative microeconomics: a game-theoretic introduction. Princeton
University Press.
Hall, R.E. and Lieberman, M., 2012. Microeconomics: Principles and applications. Cengage
Learning.
Iossa, E. and Martimort, D., 2015. The simple microeconomics of public‐private partnerships.
Journal of Public Economic Theory.17(1). pp.4-48.
Rader, T., 2014. Theory of microeconomics. Academic Press.
Lee, W., Courtney, R.H. and Balassi, S.J., 2010. Do online homework tools improve student
results in principles of microeconomics courses?. The American Economic Review.
100(2). pp.283-286.
Varian, H.R., 2014. Intermediate Microeconomics: A Modern Approach: Ninth International
Student Edition. WW Norton & Company.
Online
Dove: Brand Profile. 2017. [Online]. Available through:
<https://www.adbrands.net/us/dove_us.htm>. [Accessed on 24th August 2017].
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