ECO 550 Assignment 2 Operations Decision

Topics: Supply and demand, Economics, Food Pages: 8 (1869 words) Published: June 7, 2015


Assignment 2 Operations Decision

ECO 555 Managerial Economics

Strayer University

August, 2014

Despite outstanding technological advancements in the industry, the quality of manufactured food products has become a major concern of the time when seen from the health and wellness perspective. In the 21st century higher income, urbanization, other demographic shifts, improved transportation, and consumer perceptions regarding quality and safety are changing the global food consumption patterns. Even though the consumption of such food products is ever increasing due to the rising population growth in the world, thanks to the advancement of information technology people has now become more and more concerned about their health and well being especially in the developed world. Some Low-fat,low-calorie food products have been there for decadesbut have gained greater acceptance when their nutritional virtues are being Recognized (Altschul). The growing social awareness and initiative regarding health and wellness is also gaining traction among food manufacturers around the world that many of them are changing their business models to satisfy the growing demand. Foods with low calories and low fat have gained vast popularity in the past few years. The companies that have emerged as the vital competitors in this line of businessare Healthy Choice and Lean Cuisine. These companies contain a very glorious history and have a very decent market grip as well as customer base.Lean Cuisine was created in 1981 to provide a healthier alternative to Stouffer's frozen mealsIn the U.S, Canada and Australian market. It began with ten items and has expanded to include 100+ different meals. The fact that it is owned by Nestle, a market leader in the food industry worldwide, has added great credibility to the company and its growing number of products. Taking a look at the other rival, Healthy Choice, the same thing can be observed. This company is a subsidiary to ConAgra, which is also a very well established organization in the industry. Market competition with such giants in the industry requires a lot of intelligence and hard work for small companies. The trend, which lies in low calorie food market, is fixed by psychographic and behavioral variables, which are shown by the company’s regression model and industrial analysis. The behavioral variables are gained from market trends which are formed by purchasing style of customers. It is quite obvious that the market of the particular product and its behavior are the things on which behavioral variable depends on. The amount of units which are sold in a limited amount of time indicates the demand of that particular product in the market. The environmental conditions which are affecting the market are seen by it as well. From these calculations, the sales volumes are determined then. On the other hand the psychographic variables mean the linkage between customer personality and purchase made by that customer. The personality and the product choices of the customers mainly depend on the lifestyles on which the customers are familiar with. Now days the customers product preferences can easily be gathered from their style of shopping. 1.Before starting the analysis for the market structure of low calorie foods, first a study has to be made on a target audience for the products.The demands and needs of the target market are considered to be major factors to drive the company sales.The companies will surely fail if they don’t give proper importance on audience analysis.Moreover, the growth trend of the target market should be analyzed too. If the company can predict the market trends, then it will become quite easier for that company to decide what type of products they should be serving on a global or domestic level. The structures are quite changeable and differ from one situation to another. The company we are talking about should take such a market structure...

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Best, R. (2000).Market-based management (1st ed.). Upper Saddle River, N.J.: Prentice Hall.
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Low Calorie Foods Hand Book:- Aron M. Altschul
http://www.wisegeek.com/what-are-discontinued-operations.htm#didyouknowout
Am J Public Health. 2010 February :-The Impact of Food Prices on Consumption: A Systematic Review of Research on the Price Elasticity of Demand for Food
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