Factors Affect Supply and Demand of Acuvue

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This report’s focus is on analyzing the factors that affect the supply and demand of the products. There are several variables that can affect the supply and demand of a product, including consumers’ income, prices of substitute products, costs of inputs and so on. The product discussed for this report is Acuvue, I will analysis how the factors affect the supply and demand of Acuvue.

Acuvue is Johnson & Johnson’s Vision Care Product. It is one of the most popular eye contact lenses products for nearsighted correction and eye color alteration. Acuvue has a serial of products that depend on different replacement schedule, such as daily disposable, two weeks disposable, colors and so on. All ranges of the lenses of Johnson & Johnson’s are regarded as comfortable, convenient and good eye health product. (Johnson & Johnson, 2008 )1 In 2007, as a leader and pioneer of eye contact lens producer, there was a sales increase by 17.6% prior to 2006.(Johnson & Johnson, 2008) 2

Variables of Demand
Consumer Income
Eye contact lenses are more costly than wearing glasses. The annual expense for normal glasses is $200 dollars but the Acuvue daily disposable is about $480. Take China for example, the GDP of 2007 increased 11.4% (Wiki, 2008)1, people earned more than before. When people’s income increased, those who could not afford to buy the Acuvue in the past can had enough money to afford it. Moreover, as income increased, people tend to replace their contact lenses much more frequently than before, and the demand of Acuvue increased accordingly. Also, nearsighted people may have much higher requirement for their life quality; so, for those who are tired of wearing glasses or who seek convenience by wearing eye contacts may try to change to use eye contact lenses, therefore, demand for the eye contact lenses will increase.

Consumer Preferences
Consumer preference is a significant factor which affects the demand of the Acuvue. People have different preference for lenses for nearsightedness correction, such as replacement schedule, material (hard/ soft), and safety. Some people prefer Acuvue Daily for its convenience, and it has no daily maintenance like other types of contact; the user can just throw it away after one day. (Bausch & Lomb, 2008) For some people, they prefer soft contact lenses to hard lenses. In addition, many people care about 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 getting keratitis (wiki, 2008)2 by wearing contacts will buy the glass, and then the demand of the Acuvue will decrease. Moreover, if the nearsightedness’ preference is more favorable to Acuvue, which probably means they have more loyalty 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 involved in keratitis(wiki,2008)2 or other 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 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 Complementary Goods
If the complementary goods of Acuvue increase, the price of the Acuvue will increase accordingly. Complementary goods for Acuvue are the solution of the eye contact lenses or drops for eyes. For the past two years, with the rapid...
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