BONIA GROUP Market Demand
The calculation above shows that Bonia Group practice elastic demand for the previous 10 years. This is mainly due to strong competition among competitors. Bonia Group, which target the mid-high price range market encounter a few international branding competitor like Calvin Klein, DKNY, Paris Hilton, Armani Exchange and Lacoste in the market and were highly competitive for years.
Bonia Group was advised to avoid price increase for the coming years as sales figures for the past 10 years show that Bonia Group were in elastic demand. In order to increase yearly sales amount, the Group could actually remain or decrease price as in elasticity demand, sales growth is oppositely proportional to price. They are always encourage to remain or decrease the price, and at the same time remain the quality and material of goods to boost up the sales quickly and to show immediate results.
Besides that, the mid-high price range in Bonia Group show that their products are actually inferior goods. In order to overcome the coming economic crisis and recession, lower down the price range to normal goods is another way to avoid for profit losing. Economists predict that beginning from this year, it would be another recession coming ahead. During recession, the average salary for population will decrease and unemployment increase. People will try to find out substitute for expensive goods. Thus, Bonia as an inferior goods brand will encounter sales decrease during recession. It is good to change from inferior goods to normal goods so that they can still gaining profit during recession.
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