Question

Explain two specific ways a food business can use demand elasticities (own price elasticities and cross-price elasticities) to guide their marketing efforts.

Answer 1

Answer :The core of marketing is that how consumer has been react with the change in the price of the product or there price of related goods . These factors play an utmost important for a marketer so they have to study about elasticity of demand in great detail such as :

• Own price elasticity of demand helps in analysis the consumer sensitivity towards the price of the good. If the good demand is inelastic as it means that demand does not vary with price.So marketer has choice to charged higher price for the product where as demand is elastic than price is quite sensitive and change with price reduces revenue.
• Price of related good has been measured with cross price elasticity as means in case of substitute good when. Price of substitute increase than demand decrease and vica versa. So the marketer has to kept in mind various technique . In another case as price of complemtary reduced than demand increase so marketer has to used proper technique in order to grab maximum share.So marketers should make wise action related to them.