MINTEL REPORT

Batteries- UK- February 2010. Mintel Report

Batteries- UK- February 2010. Mintel Report

b) Using the data supplied for that period show how it can be calculated that the price elasticity of demand for batteries is about -0.46. Interpret this figure and explain what it implies about the behaviour of consumers.

According to the trade research, the introduction of attractive deals by the manufacturers of batteries in UK leads to an increase in the purchasing of batteries by the consumers. The price elasticity of demand for the batteries is around - 0. 46 which implies the increasing response of consumers towards the purchasing of batteries due to the change in price. It is justified by the Mintel's report of batteries that analyzes the data from 2004 - 2009. However, the price elasticity demand is calculated for the period of 2004 - 2008 in order to determine the quantitative estimate for the given period. Consumers bought the batteries more in 2008 and therefore, the price elasticity demand of the batteries increased in that period. The price elasticity demand or price elasticity is a concept used to measure the rate of response of demanded quantity by the consumers because of a change in the price of the product (Mankiw, 2011).

If we look at the previous trend, then here was a recession in the year 2007 that caused the manufacturers to increase their sales through promotional activities. Due to this reason, the manufacturers introduced promotional activities and campaigns in the UK market for selling their batteries. The attractive deals by the manufacturers impacted the market in a way that the average number of batteries increased during the time that were purchased by the consumers based on the per pack estimate. The number of batteries increases from a level of 4. 5 to 4. 7 during 2008. The consumers who used to buy fewer packs of batteries before the promotional deals, started to buy more packs of batteries in order to avail the befit of the additional purchase at low cost. The trade research also identified that the average price per pack of the batteries did not change during the time period of 2007 till 2008. This figure can be interpreted as the free purchase to the customers offered by the manufacturer.

c) Account for the increase in sales of zinc carbon batteries in 2009, following a period of decline.

According to the report of Mintel, zinc ...