General Mills and PZ Cussons

General Mills is a manufacturer and seller of branded customer goods. The company has its headquarters in Golden Valley Minnesota. Its main products are vegetables, baking mixes, ice cream, pizza, snacks and cereals (General Mills, 2014). It markets these products to over 15 countries and does business in over 100 different countries (Channel et al., 2014).

Most of the products produced by the company are luxury products. It is therefore likely that the demand for these products is mostly influenced by the economy of the country. During the times when the economy is doing well and most people have a lot of disposable income, the demand for the company’s products is high (Mankiw, 2009). The demand for the goods is also high at the end of the month when employees have a lot of income in the form of just released salaries. The goods also have a high demand during the times of the year when children are out on holiday. This is especially true for goods like ice cream, cereals and snacks which have a high demand among children.

The supply of the products varies among the different products. First, the supply of raw materials is an important factor. Most of the products originate from Agricultural produce. When farmers push for higher prices, the company may be unable to meet the demand of the products. Second, it is probable that the price of raw materials fluctuates during different seasons. Thirdly, the ability of the company to store raw materials is another factor. The company’s ability to store raw materials is limited. Some companies can only be stored for limited periods of time. This considered, it is difficult to handle the market as it is throughout the year especially during those periods of the year when the production of certain products is construed (Mankiw, 2009).

Most of the products are made available to consumers in convenience stores. There are substitutes for these products in the form of ready-made foods available in restaurants. On the other hand, non-alcoholic drinks and beverages are complementary products. Consumers who buy drinks may be in a position to buy the products of the company.

The demand for the products of General Mills is elastic. When the prices of the products are changed, consumers are expected to keep off those products in the short-run. In the long-run, consumers are likely to resume the consumption of the products regardless of the price. The company’s production is mostly labor intensive. Most of the production requires some labor to be successful. Technology is also an important factor in the production of the products. The market structure of the products is monopolistic competition. Companies identify ways they can improve their advantage over other companies to win a bigger market share (Mankiw, 2009). The products of the company are favorable. The products may need to be improved but a ready market will always be available.

PZ Cussons is a manufacturer and distributor of personal care and beauty products. It is mainly dominant in the production of products that are mainly based in the production bath and shower products specifically bath and shower soaps. The company is mainly based in London UK. The company’s bath and shower products are used on a daily basis for personal care (Pz Cussons, 2014). The demand of the products is mainly dependent of the competition of the product as well as the advertisement. When the product meets with stronger and more competitors, the demand is likely to fall. The main determinant of the supply of the product is the suppliers of raw materials and international factors such as tax.

There are various substitutes for the products. Alternatives to bath products include bath gels that are provide by other companies. The company’s products are likely to be complemented by other personal care products like lotions and body perfumes as they often go together (Pz Cussons, 2014).

The demand for the product is inelastic. Changes in price unless to extreme rarely affect the demand. Most people prefer to stay with one producer for personal care products. In this regard, most customers are unlikely to change their personal care products just because the prices have changed minimally. The company’s production is labor intensive. It depends more on a labor force to produce the products than it depends on the capital. Technology is vital to help in improving the quality of the products as well as in the normal production of the product (Reuters, 2014).

The bath and shower product industry is mainly monopolistic competition. The companies compete by offering consumers better products as well as advertising and ensuring consistency (Mankiw, 2009). This way, consumers are likely to stick with them. The prices of these products also differ notably from company to company.

The bath and shower products will always be in the market. The same products have been in the market for over twenty years with only minor adjustments. This shows that the market is a reliable one and there has been no need to make major changes to the product line.

References

Channel, D., Stengel, J., Adamson, A., Field, A., Loftus, G., & Helman, C. (2014). General Mills on the Forbes World’s Most Innovative Companies List. Forbes. Retrieved 22 November 2014, from http://www.forbes.com/companies/general-mills/

General Mills,. (2014). General Mills: One of the world’s largest food companies. Retrieved 22 November 2014, from http://www.generalmills.com/

Mankiw, N. (2009). Principles of microeconomics. Mason, OH: South-Western Cengage Learning.

Pz Cussons,. (2014). Home | PZ Cussons. Retrieved 22 November 2014, from http://www.pzcussons.com/en_int/

Reuters,. (2014). PZ Cussons PLC (PZC.L) Company Profile | Reuters.com. Retrieved 22 November 2014, from http://www.reuters.com/finance/stocks/companyProfile?symbol=PZC.L