Factors Affect Supply and Demand of Acuvue Essay Example for Free

Factors Affect Supply and Demand of Acuvue EssayThis reports focus is on analyzing the agents that print the publish and bring of the harvest-feasts. There argon several variables that can affect the cut and quest of a yield, including consumers income, harms of substitute products, costs of inputs and so on. The product discussed for this report is Acuvue, I allow for analysis how the factors affect the supply and demand of Acuvue. Acuvue is Johnson Johnsons Vision C atomic number 18 Product. It is one of the most popular tendernessball hand lenses products for nearsighted correction and nerve centre color alteration. Acuvue has a serial of products that depend on different successor schedule, such as free-and-easy disposable, deuce weeks disposable, colors and so on. All ranges of the lenses of Johnson Johnsons atomic number 18 regarded as comfortable, convenient and good center matter health product. (Johnson Johnson, 2008 )1 In 2007, as a leader and pion eer of centre see lens producer, there was a sales step-up by 17. 6% prior to 2006.The annual expense for normal furnish is $200 dollars but the Acuvue daily disposable is somewhat $480. Take chinaware for example, the GDP of 2007 increased 11. 4% (Wiki, 2008)1, people earned to a greater extent than before. When peoples income increased, those who could not ease up to demoralise the Acuvue in the past can had enough money to afford it. Moreover, as income increased, people lam to replace their intercommunicate lenses much more frequently than before, and the demand of Acuvue increased accordingly.Also, nearsighted people whitethorn have much higher prerequisite for their life quality so, for those who are tired of wearing glasses or who seek convenience by wearing eye physical fills may try to change to subprogram eye sink in lenses, therefore, demand for the eye contact lenses will increase. Consumer Preferences Consumer preference is a significant factor which affects the demand of the Acuvue. People have different preference for lenses for nearsightedness correction, such as replacement schedule, poppycock (hard/ cushioned), and golosh.Some people prefer Acuvue Daily for its convenience, and it has no daily maintenance like opposite types of contact the theatrical roler can just throw it away after one day. (Bausch Lomb, 2008) For some people, they prefer soft contact lenses to hard lenses. In addition, many people care about the safety of eye contact lenses, and daily contact lenses are regarded as the safest and healthiest way, so those people may choose the Acuvue Daily, and thus, the demand of the Acuvue increases. On the contrary, people who are afraid of acquire keratitis (wiki, 2008)2 by wearing contacts will steal the glass, and then the demand of the Acuvue will decrease.Moreover, if the nearsightedness preference is more favorable to Acuvue, which probably means they have more obedience to the products, so the existing consumers will seldom change to alternatives and more and more people will buy Acuvue. Price of Substitutes The Substitutes of Acuvue eye contact lenses are glasses and surgery. As compared before, wearing glasses is a more economical way to correct nearsightedness, and there will be lower risk of being twisty in keratitis(wiki,2008)2 or otherwise eye problems. Moreover, in the recent years, correcting nearsightedness by taking an eye operation became more popular in many countries.The costs for the surgery are high, and the average for getting the LASIK nearsightedness correction surgery is $2105 in 2008. (All about Vision, 2008) If the price of the surgery decreases, there will be more people choosing eye surgery instead of wearing inconvenient glasses or eye contact lenses so, there will be less demand of Acuvue. Price of Complementary Goods If the complementary goods of Acuvue increase, the price of the Acuvue will increase accordingly. Complementary goods for Acuvue are the solution of the eye contact lenses or drops for eyes.For the past two years, with the rapid economic growth in China, people have more money to purchase eye contact lens, but if the average prices of the solutions increased dramatically, people who could afford to buy the lenses felt burdened to buy the solution. Advertising Promotion Advertising is a way of communication, Johnson Johnson get more advertising is to try to bow potential drop customers and consumer to purchase more Acuvue(wiki, 2008)3. Johnson Johnson has released a series of advisements and promotions for Acuvue.They provide free trial pairs of eye contact lens for the potential consumers who can just fill a Free Trial Pair security system (Vision Care Inc. , 2008) from the Acuvue official website. In addition, when the Acuvue 2 colours entered the mainland China market, they chose an unknown model to perform the publicizing first, and the sales for the Acuvue 2 was unfavourable. However, then the Johnson John son invite Chinese pop singer Angela Zhang for promotion on TV, then, this product became familiar with lots of youth in China, and more and more people known about the Acuvue and bought it.Consumer Expectations Johnson Johnson is a well known and trusted company by millions of consumers all around the world. It pays much attention to the safety of their products. So consumers are confident with the Acuvue and more and more people buy it. When the AMO Complete Moisture confident(p) Muti-Purpose Solution (Anapol Schwartz, 2008) was recalled in May, 2007, people were concerned about the eye safety. From that time, people tented to buy less and use less eye contact lens in order to avoid infection.Number of Buyers If there are more and more potential consumers of Acuvue, demand for Acuvue will increase. For recent years, more and more people in the world have access the computer, and they use computers much more frequently and longer than the past. People are more prone to get nearsi ghtedness. From Johnson Johnsons research, there are about 3 million juvenile eye contact wearers in the US e genuinely year (Vision Care Inc. )2, so the number of potential buyers is increasing for consuming eye contact lenses year by year.In addition, with the development of engineering, the material of contact lenses is getting better and safer, so more people will be confident with the eye-contact lenses so more potential buyers will buy the Acuvue, then the demand for buyers will increase. But if there is new technology that can take place of eye contacts lenses, the nearsighted may give up wearing contacts, so the number of potential buyers decrease which indicates the demand of Acuvue will decrease. Variables of Supply Costs of InputsThe world economy was very unstable since last year, and the price of raw materials kept on rising. Fortunately, there is no news about the raw material price fluctuation for eye contact lenses. If the price of storing contact lenses increases, the Acuvues producer Johnson Johnson must find ways to control the output signal costs. The company may choose to reduce the production volume of the product and wait for producing that good when the price goes down, therefore the supply of Acuvue will decrease.However when the materials for fashioning the eye contact lenses decreases, Johnson Johnson will have more capacity to produce more eye contact lenses to increase its supply. Number of competitors The more competitors there are, the less the supply. Due to the property of the vision care industry, the requirement for entering this business field is fairly high. For the current market, there are four main producers and other several smaller producers which produce eye contact lenses. Johnson Johnson is the largest eye contact lens producer in the world, making sales of $2. billion around the world (Johnson Johnson, 2008) 3. In China, eye contact lens manufactures are increasing in the market, competition became fierce, raw material for making the contact lenses increased, and the market share became dilute, so although sales of Acuvue increase in China very year, the growth is not as large as expected. New Technology As we know Johnson Johnson Vision Care first introduced the soft disposable eye contact lens for the world (Wiki, 2008), and this revolutionary product helped the Johnson Johnson opened a new product field and access to expand their market to over 50 countries in the world.If there is new cheaper material for producing Acuvue, Johnson and Johnson will be capable of producing more Acuvue by the same investment as in the past, which means the supply of the Acuvue will increase. However, in the future, with the development in technology, some existing materials for making eye contact lensse may have potential risks for our eyes. When the Johnson Johnson found that potential risks really do exist, in order to guarantee the product safety, they had to pay more for preventing the risks h armful to contacts wearer, or even reduce the supply of those products.Suppliers Expect that Future gross sales Prices In recently years, there is a trend that more and more reports show that wearing daily disposable eye contact lens is much more comfortable, healthier and safer, because daily replacement lenses are healthier than other replacement schedule. With the expectation, the market for the Acuvue Daily disposable has much more potential than other Acuvue disposable lenses, and Johnson Johnson will decide to produce more Acuvue Daily in according with the potential increase of the demand for Acuvue.Conclusion To sum up, those variables discussed above with the supply and demand of Acuvue finally affect the price of the Acuvue. As we know, the market price is the equivalent of the supply and demand. It is determined by an invisible hand of both supply and demand. Therefore, it is impossible for those factors discussed before to singly handedly affect the supply and demand, because the market is complex, all those variables together contributed to our market price.