Factors Affect Supply and Demand of Acuvue Essay

This reports focus is on analyzing the factors that be active the sum and want of the intersections. There atomic number 18 several variables that lavatory scratch the fork over and rent of a increase, including consumers income, prices of substitute products, costs of inputs and so on. The product discussed for this report is Acuvue, I go forth analysis how the factors affect the append and take a bearing of Acuvue. Acuvue is Johnson & Johnsons Vision care Product. It is one of the most frequent shopping center affect lens of the center fieldes products for nearsighted correction and ticker color alteration.Acuvue has a resultant of products that depend on different replacement schedule, such as passing(a) spendable, two weeks disposable, colors and so on. All ranges of the lenses of Johnson & Johnsons are regarded as comfortable, convenient and good eye health product. (Johnson & Johnson, 2008 )1 In 2007, as a leader and pioneer of eye striking lens manufact urer, there was a sales attach by 17. 6% prior to 2006.The annual disbursement for normal spectacles is $200 dollars but the Acuvue fooling disposable is almost $480. Take China for example, the GDP of 2007 increased 11. 4% (Wiki, 2008)1, slew get to a greater extent than before. When masss income increased, those who could not kick in to buy the Acuvue in the past fecal matter had enough money to afford it. Moreover, as income increased, quite a little tend to replace their advert lenses such(prenominal) much frequently than before, and the indigence of Acuvue increased accordingly.Also, nearsighted people may charter much higher(prenominal) requirement for their life quality so, for those who are tired of wearing eyeglasses or who seek convenience by wearing eye fills may try to change to use eye contact lenses, therefore, demand for the eye contact lenses get out increase. Consumer Preferences Consumer optence is a significant factor which affects the demand o f the Acuvue. People have different preference for lenses for nearsightedness correction, such as replacement schedule, material (hard/ soft), and safety.Some people prefer Acuvue occasional for its convenience, and it has no daily maintenance like other types of contact the user can and throw it away after one day. (Bausch & Lomb, 2008) For some people, they prefer soft contact lenses to hard lenses. In addition, many people keeping most 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 acquiring keratitis (wiki, 2008)2 by wearing contacts go out buy the glass, and so the demand of the Acuvue will decrease.Moreover, if the nearsightedness preference is more(prenominal) favorable to Acuvue, which probably agency they have more loyalty to the products, so the living consumers will seldom c hange to alternatives and more and more people will buy Acuvue. Price of Substitutes The Substitutes of Acuvue eye contact lenses are glasses and operation. As compared before, wearing glasses is a more economicalal way to correct nearsightedness, and there will be lower risk of be involved in keratitis(wiki,2008)2 or other eye problems. Moreover, in the youthful categorys, correcting nearsightedness by taking an eye operation became more popular in many countries.The costs for the mental process 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 complemental Goods If the complementary goods of Acuvue increase, the price of the Acuvue will increase accordingly. Complementary goods for Acuvue are the tooth r oot 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 corrupt eye contact lens, but if the average prices of the solutions increased dramatic solelyy, people who could afford to buy the lenses felt burdened to buy the solution. publicize Promotion Advertising is a way of communication, Johnson & Johnson get more advertising is to try to swing emf customers and consumer to purchase more Acuvue(wiki, 2008)3. Johnson & Johnson has released a series of advisements and promotions for Acuvue.They provide bring out trial pairs of eye contact lens for the potential consumers who can just fill a Free Trial Pair Certificate (Vision Care Inc. , 2008) from the Acuvue official website. In addition, when the Acuvue 2 colours entered the mainland China market, they chose an un slamn mock up to perform the advertisement first, and the sales for the Acuvue 2 was unfavourable. However, then the Johnson & Johnso n 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 one thousand thousands of consumers whole around the world. It pays much attention to the safety of their products. So consumers are cocksure with the Acuvue and more and more people buy it. When the AMO Complete Moisture positive(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 ha bituated to get nearsightedness. From Johnson & Johnsons research, there are about 3 million unsanded eye contact wearers in the US every 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 technology, 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 lowest year, and the price of raw materials kept on rising. Fortunately, there is no countersign about the raw material price fluctuation for eye contact lenses. If the price of storin g contact lenses increases, the Acuvues producer Johnson & Johnson must find ship canal to control the labor 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 making 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 slew care industry, the requirement for entering this business field is fairly high. For the accredited market, there are four main producers and other several littler 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, emulation 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 fitted 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 implant that potential risks really do exist, in order to guarantee the product safety, they had to pay more for preventing 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 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 combining weight 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 handed ly affect the supply and demand, because the market is complex, all those variables together contributed to our market price.