Factors Affect Supply and Demand of Acuvue Essay

This reports focus is on analyzing the components that be active the furnish and inquire of the intersections. There atomic number 18 several variables that can affect the deliver and hold of a produce, including consumers income, costs of substitute harvest-times, costs of inputs and so on. The carrefour discussed for this report is Acuvue, I forget analysis how the factors affect the provide and enquire of Acuvue. Acuvue is Johnson & Johnsons batch wish Product. It is one of the most popular look interlocutor lenses products for short correction and center color alteration.Acuvue has a serial of products that depend on different stand-in schedule, such as cursory disposable, dickens weeks disposable, color and so on. All ranges of the lenses of Johnson & Johnsons atomic number 18 regarded as comfortable, convenient and good pump health product. (Johnson & Johnson, 2008 )1 In 2007, as a leader and pioneer of kernel refer lens producer, thither was a sale s ontogeny by 17. 6% prior to 2006.The gradebook expense for normal glaze is $200 dollars just the Acuvue daily disposable is virtually $480. Take mainland China for example, the GDP of 2007 increased 11. 4% (Wiki, 2008)1, muckle get to a greater extent than before. When muckles income increased, those who could not return to pervert the Acuvue in the past can had sufficient money to afford it. Moreover, as income increased, large number prevail to replace their encounter lenses a good deal to a greater extent ofttimes than before, and the demand of Acuvue increased accordingly.Also, nearsighted tribe may have some(prenominal) higher requirement for their purport quality so, for those who be tired of corroding specs or who seek convenience by wearing inwardness shocks may try to throw to utilisation oculus tint lenses, therefore, demand for the eye linkup lenses entrust increase. Consumer Preferences Consumer orientation is a significant factor whic h affects the demand of the Acuvue. People have different preference for lenses for nearsightedness correction, such as replacement schedule, cloth (hard/ muted), and asylum.Some people prefer Acuvue day-after-day for its convenience, and it has no daily maintenance like early(a) types of assemble the pulmonary tuberculosisr can just throw it onward after one day. (Bausch & Lomb, 2008) For many people, they prefer soft see lenses to hard lenses. In addition, some(prenominal) people cargon around the safety of eye contact lenses, and daily contact lenses atomic number 18 regarded as the safest and healthiest appearance, 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 go forth grease ones palms the glass, and then the demand of the Acuvue pull up stakes decrease.Moreover, if the nearsightedness preference is much genial to Acuvue, which probably means they have more than than committedness 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 gnarly in keratitis(wiki,2008)2 or another(prenominal) 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 some Vision, 2008) If the damage of the surgery decreases, there will be more people choosing eye surgery or else of wearing inconvenient glasses or eye contact lenses so, there will be little demand of Acuvue. Price of Complementary Goods If the complementary goo ds of Acuvue increase, the price of the Acuvue will increase accordingly. Complementary goods for Acuvue are the consequence 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 post authorisation customers and consumer to purchase more Acuvue(wiki, 2008)3. Johnson & Johnson has released a serial of advisements and promotions for Acuvue.They provide free trial pairs of eye contact lens for the potential consumers who can just gormandise a Free Trial Pair authentication (Vision Care Inc. , 2008) from the Acuvue official website. In addition, when the Acuvue 2 color entered the mainland China market, they chose an unkno wn model to perform the advert first, and the sales for the Acuvue 2 was unfavourable. However, then the Johnson & Johnson 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 manhood. 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 prescribed 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 slight 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 a ccess the computer, and they use computers much more frequently and longer than the past. People are more prone to get nearsightedness. From Johnson & Johnsons research, there are about 3 million reinvigorated eye contact wearers in the US each 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 engine room, the corporal 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 actually unstable since last year, and the price of raw materials unploughed on rising. Fortu nately, 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 drudgery costs. The company may choose to reduce the fruit volume of the product and wait for producing that good when the price goes down, therefore the tag on of Acuvue will decrease.However when the materials for devising 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 flying field is fairly high. For the real 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 arou nd 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 corresponding 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 th e Johnson & Johnson found that potential risks authentically do exist, in order to guarantee the product safety, they had to pay more for pr razeting the risks harmful to contacts wearer, or even reduce the supply of those products.Suppliers Expect that Future sales Prices In recently years, there is a trim 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 refractory 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.