Professional Documents
Culture Documents
FHBM1024
MICROECONOMIC & MACROECONOMICS
SEMESTER 201410
Prepared by
Tutorial
No ID No. Name Signature
Group
14AHF01511 Ng Rui Ying T37
1
14AHF04203 Tan Yuen Qin T37
2
14AHF03181 Tey Yin Wei T37
3
Particular Page
Part 1: 3-7
- Introduction company
- Introduction product / service brand line
- Normal Product
- Complement and substitute
- Market Structure
Part 2: 8-9
- Comparison price of the product
- Reasons of the price level for both products
Part 3: 10 13
- Law of demand
- Elasticity
- Advantages of market structures belong to
- Fixed and variable cost
- Economics of scale
References 14
Appendix 15-17
The Yakult cultured milk drink in Malaysia is proudly Malaysian made, from
the finest selected ingredients. Although Yakult has enjoyed 70 years of successfully
promoting better health overseas, it is a new product to Malaysia.Yakult (Malaysia)
Sdn. Bhd. commenced production in February 2004 and is awholly owned subsidiary
of Yakult Honsha (Japan). Yakult has committed millions of ringgit to establish and
operate its Malaysian manufacturing operations in Seremban, Negeri Sembilan and
head office in ShahAlam, respectively. The product that is marketed in Malaysia is
Yakult Ace, an improved version of the standard Yakult cultured milk drink available
in other countries worldwide. Yakult Ace has a higher concentration of the probiotics
Lactobacillus casei Shirota and added nutrients: calcium, niacin and vitaminsB6, B12
and D. Yakult (M) Sdn. Bhd. currently employs over 88 people through out Malaysia.
Our employees include production workers, sales consultants, customer service officers,
administrative staff, managers and human resource personnel.
The man behind the founding of Yakult Honsha Co., Ltd was Dr.Minoru Shirota.
He began developing Yakult in 1930 while he was with the Microbiology Department
at Kyoto Imperial University's School of Medicine.Dr. Shirota believed that rather than
curing a disease, it was much better to builda strong body that was able to resist the
disease. He turned his attention to the study of micro organisms due to his strong belief
that a type of bacteria-lacticacid bacteria is capable of contributing to our health. Dr
Shirota's objective was to isolate a beneficial bacterium that would be able to survive
through our stomach and bile acids to arrive alive in our intestines. There it would assist
the functioning of our digestive system. Subsequently, he discovered that lactobacilli
could also destroy harmful bacteria that live in our intestines.Excited by this finding,
he conducted an exhaustive investigation of lactobacilli,where upon he discovered a
Introduction - Yakult
Yakult is a world pioneer in the field of probiotics which had over 75 years of
research experience. Born from the researcher of doctor call Dr. Minoru Shirota, who
was first person in the world succeed in bring up a "Lactobacillus casei Shirota",
popularly known as the "Shirota strain" bacterium were useful for maintaining human
health in Japan year 1930. With over 30 billion live Shirota strain in each bottle, Yakult
has become the highest concentrations of probiotics compared to other probiotic
products which was mostly just contain 1 to 10 billion live probiotic bacteria per serving
on the market when Yakult started to enter the market in year 1935.
Yakult is a high quality probiotics in the form of a cultured milk drink for getting
a good health to human because it is free of preservatives, stabilizers and colourless.
Yakult is a right choice for those who are looking for the high quality probiotics for
benefit for human health because of strongest bacteria.
For the Yakult original taste, Yakult Ace is a premium version of the standard
Yakult cultured milk drink available in other countries worldwide. Yakult Ace also has
a higher concentration of the beneficial bacteria Lactobacillus casei Shirota and
contains added nutrients which is calcium, niacin and vitamins B6, B12 and D. For the
latest product of Yakult which is Yakult Ace Light also is cultures milk drink and has
a same high concentration of the Shirota strain as Yakult Ace, which is 30 billion live
probiotic bacteria in each bottle, but it is with 50 percent less sugar compared to the
original Yakult Ace. Both for the Yakult product is also free of fat, cholesterol,
colourings, perservatives, conditioners and stabilizers.
Yakult also is a convenience product because it can get it at all major shopping
center, hypermarkets and stores in everywhere. Beside of the Yakult can get it anywhere
easily, Yakult has also home delivery service by Yakult Ladies to promote to the
customer. This service was free of charge, but it only available in certain areas.
Normal product
Yakult is a normal product. Normal products are goods which quantity
demanded increases when income increases. When income decreases, quantity
demanded for Yakult decreases. It has a positive relationship in elasticity of demand.
B
P2
P1 A
D1 D2
Q2 Q1 Quantity Quantity
Market Structure
Yakult is practising the market structure of monopolistic competition. Based
on the characteristics of monopolistic competition market, Yakult has product
differentiation. For example, Yakult has different style and packaging in market so
that consumer can easily distinguish Yakult products from others.
Moreover, Yakult has also many sellers and buyers in the market. For
example, Yakult has the competitors as Vitagen, Nutrigen, Solivite and others. Yakult
cultured milk are also available and suitable for everyone, such as kids, teenagers, adults
and old folks. It sells in several of markets, such as hypermarket, minimarket,
supermarket, shopping complex, and others.
Yakult can also be considered as a price maker because it can freely fix the
prices of its product in order to get more profit. It sets the same price for every market
and the prices of its products are not set by government.
From the table as above, we can see that price of Yakult with the original taste,
Yakult Ace is RM 4.29 and the less sugar taste, Yakult Ace Light is RM4.65. From
the above has also shown the price of Vitagen with the original taste, many flavor is
RM 4.50 and also the less sugar is RM 4.69. To make the comparison with this both
of product, although price of Vitagen with the original taste was higher than price of
Yakult with the original taste, but the different of price was just more than RM 0.21.
Besides of that, taste of less sugar between the price of Vitagen and price of Yakult,
price of Vitagen was also higher than price of Yakult which is just different RM 0.04
only. In the comparison of the price at RM 0.21 and RM 0.04, we can say that,
compare the price of Yakult and price of Vitagen is almost the same because they are
selling the same cultured milk drinks.
iii. Advertisement
Vitagen can sell in a higher price than Yakult because Vitagen spend too much on ads
causing the high cost price that leads to the higher selling price. There are a lot of
advertisement promoting Vitagen, we can reach in our daily life, such as television ads
and newspapers. In this case, the selling and advertisement cost consequently become
higher, causing the higher selling price. On the contrary, Yakult has been gaining a
strong brand image and product quality for years. They actually spend lesser in
advertisement cost, as we seldom see Yakult be advertised in televisions and periodicals.
Therefore, Yakult can be sold in lower price.
Elasticity
In concept of Elasticity, goods with a availability of close substitutes are have
elastic demand. For our product, Yakult is an elastic product. This is because Yakult
has a close substitution and has a powerful opponent like Vitagen. This will cause easier
for the consumers to switch from one good to the other brand of good. For example, if
the price of Yakult was change to higher price than a close substitutes price of Vitagen,
consumer will willing to buy the Vitagen rather than buy the Yakult because Vitagen
was in lower price than Yakult.
Furthermore, goods that are luxuries which is usually have more elastic demand
than goods that are necessities. So, Yakult is a goods that are luxuries product, this is
because Yakult is not a necessary product for all the consumers demand. For example,
milk is a necessities product because it is inelastic demand and consumers will not so
dependent about the price of milk. But for the Yakult, Yakult is a luxuries product
because of it is elastic demand and consumers will very sensitives about the price of
Yakult.
Besides, demand tends have to be inelastic which is less sensitives about the
price in the short run than in the long run which to be elastic and sensitives about the
price. For the reason, short run may cause the consumers difficult to find out the
available substitutes when the product is in the price change. But for the long run, it
have enough time to let the consumers find out the available substitutes and can also
The firms that under the monopolistic competition is more easily to entry and exit
compare to others. The number of firms in the market will increase until the economic
profits are driven to zero. In this competition, there are not many barriers to entry such
as legal barriers, franchising, licensing and patents. For example, Yakult have been