Lingfield College Business

The amount that customers demand is affected by price (PED). However, it is also affect by the incomes of consumers. This leads onto another important elasticity – the income elasticity of demand (often shortened to YED). Income elasticity of demand measures the relationship between a change in quantity demanded for good X and a change in real income. The formula for calculating income elasticity is: % change in demand divided by the % change in income Most products have a positive income elasticity of demand . So as consumers' income rises more is demanded at each price. 1. Normal necessities have an income elasticity of demand of between 0 and +1 for example, if income increases by 10% and the demand for fresh fruit increases by 4% then the income elasticity is +0.4. Demand is rising less than proportionately to income. 2. Luxury goods and services have an income elasticity of demand > +1 i.e. demand rises more than proportionate to a change in income – for ex...

Understanding how demand for a product might change as price changes is essential to an effective marketing strategy.   First, a quick acronym - price elasticity of demand is often to just "PED": much quicker to write, particularly in an exam, so we'll use it here.   PED measures the responsiveness of demand for a product following a change in its own price .   The formula for calculating the co-efficient of elasticity of demand is: Percentage change in quantity demanded   divided by the percentage change in price   Since changes in price and quantity usually move in opposite directions, we usually do not bother to put in the minus sign. We are more concerned with the co-efficient of elasticity of demand [however, in the exam be precise and use the minus sign].   By calculating Ped, a business can assess how a change in price will affect the demand for its products. This is really useful information for any marketing plan, but also h...

Omnichannel Success - E-Commerce Helps Drive Growth at Ted Baker Jim Riley 8th October 2015   In our BUSS4 Section A briefings this week we've been exploring the competitive advantages enjoyed by "omnichannel retailers" who get the mix right between e-commerce, physical retail and other distribution channels. A great example hits the new this week, as lifestyle brand Ted Baker report significant growth from e-commerce sales. Ted Baker sells online, through 416 stores, outlets and concessions, including 184 in the UK. As always, the important point for students to consider is not the "what" (that e-commerce sales have risen), but the "why"? On their investor relations section, the Board at Ted Baker set out their corporate strategy: Our strategy is to develop as a leading global lifestyle brand, based on three main elements:  consid...

value of Interbrand's annual list of the 100 most valuable brands increased by 7pc compared to last year Email Lego has a brand value of $5.36bn   Photo: Warner Brothers By  Lauren Davidson 6:00AM BST 05 Oct 2015 Comment Lego was the highest new entrant on  this year’s Best Global Brands report , the annual index from the Omnicom-owned agency Interbrand of the world’s most valuable brands.  The  Danish toymaker’s brand was valued at $5.36bn , placing its 82nd on the list, ahead of Chevrolet, FedEx, Heineken, Ralph Lauren and Kleenex, following  the runaway success of The Lego Movie  and strong licensing deals with Jurassic World, Star Wars and Frozen.  The new entrants, which included Paypal, Mini, Moët & Chandon and Lenovo, knocked Pizza Hut, Nokia, Gap, Nintendo and Duracell off the list.  Pizza Hut fell out of the 10...