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Anita’s First Three Months at BEEPL: Elasticity Experiences?

CASELET, MANAGERIAL ECONOMICS
ET Cases, 6 pages
AUTHOR(S) : Vandana Jayakumar and Dr. Nagendra V. Chowdary

Case Preview

Anita’s First Three Months at BEEPL: Elasticity Experiences?

 

Anita Chauhan (Anita) was an ambitious girl from a remote village, 15 kilometers from Gorakhpur, in Uttar Pradesh. Anita’s village was sparsely populated and was underdeveloped. For instance, it was not connected by a pucca road, lacked electricity and had just one primary school. Anita completed her schooling from Gorakhpur and graduation (engineering) from Lucknow. Thereafter, she pursued her MBA from the New Delhi Management College (NDMC).

In the fourth semester of her MBA, Anita was placed as a management trainee in the corporate office of Blue Earth Engineering Products Ltd. (BEEPL), located in Udyog Vihar, Sector-18, Gurgaon. BEEPL being one of the leading engineering and manufacturing companies of India, it was a dream company for Anita. She was one of the five students who were offered final placement by the engineering giant. The job profile too was exciting with equally encouraging pay package. The first three months of her work life reminded her of what her Economics Professor had taught in the elasticity session of Business Economics course.........

Residence Selection

The fourth semester exams were over in May 2014 and the students still had around 3 months’ time on hand before they could start working. BEEPL had conveyed to the students that the joining date would be in the end of August 2014 or beginning of September 2014 and they would be informed about the exact joining date over e-mail, sometime in August 2014.

Of the five students who were offered campus placement by BEEPL, Aakash and Surendra were residents of Delhi, Anita was from Gorakhpur and Meera and Sonal were from Pune. Before leaving for their hometowns, on May 24th 2014, Anita, Meera and Sonal went to Gurgaon to look out for accommodation and get details of the same............

New Job, New Clothes and Online Fashion Apparel Retailer

Although Anita had settled for an expensive PG accommodation for `18,000, she was happy in her new found residence. At the end of 1st week at work, Anita was looking forward to spend the weekend with friends at her room. On Saturday (September 6th 2014) morning, as she picked up the day’s newspaper, she saw a full page advertisement by one of the leading online lifestyle stores announcing flat 50% off on most of the apparel and footwear labels from 9:00 am to 3:00 pm on Sunday............

First Salary and First Signs of Brand Preferences

The first month at work was very exciting for Anita, Meera and Sonal. Not only were they learning the ways of professional life, they also got a chance to participate in several events. On one such occasion, tickets were offered to BEEPL employees for a rock concert being held in Gurgaon. Each ticket was available at a subsidized rate of 1,500. However, Anita, Meera and Sonal decided not to go for the concert as they found the tickets to be expensive and they had not even received their first salary............

Travel Travails and the Honda Activa

To travel to office each day, the girls walked up to the main road, where they could hire shared auto rickshaws which plied till the office campus. Similarly, to go back home in the evening, the girls followed the same routine. They paid 25 for each trip (per head)............

Assignment Questions

I. Explain Anita’s residence selection and shopping for fashion apparel online with the help of concept and types of price elasticity of demand.

II. Anita’s first salary undoubtedly changed her brand preferences. How do you categorize the new found demand for preferred brands of shampoo and lipstick? Explain with the help of the concept and types of Income Elasticity.

III..............

Teaching Note Preview

Anita’s First Three Months at BEEPL: Elasticity Experiences?

 

Synopsis

This caselet helps understand concepts in elasticity of demand through the experiences of Anita Chauhan (Anita), the protagonist of the caselet. As Anita embarks on a new phase in her life where she joins Blue Earth Engineering Products Ltd. (BEEPL) as a management trainee, she experiences episodes of elasticity of demand. As she takes decisions related to elasticity of demand, the students/participants get an opportunity to understand the concepts of price elasticity of demand, income elasticity of demand and cross elasticity of demand.

Prerequisite Conceptual Understanding

  • • Paul A Samuelson, et al., “Supply and Demand: Elasticity and Applications”, Economics, 19th Edition, McGraw Hill Education (India) Private Limited, 2010 – To have an understanding of the concepts in elasticity of demand

 

Case Positioning and Setting

This caselet can be used for:

  • • MBA Program in Managerial Economics course – To understand the concept of elasticities of demand and its various types and applications

 

Suggested Viewing

  • • Confessions of a Shopaholic, directed by P.J. Hogan, Touchstone Pictures and Jerry Bruckheimer Films, February 13th 2009

 

Assignment Questions

  • I. Explain Anita’s residence selection and shopping for fashion apparel online with the help of concept and types of price elasticity of demand.
  • II. Anita’s first salary undoubtedly changed her brand preferences. How do you categorize the new found demand for preferred brands of shampoo and lipstick? Explain with the help of the concept and types of Income Elasticity.
  • III. ...................


Preamble to this Caselet Analysis

This caselet provides ample scope to learn the three types of elasticity of demand along with the sub-types in each of the three types of elasticity of demand [Exhibit (TN)-I].......

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Abstract


This caselet is meant to understand three types of elasticity of demand - Price, Income and Cross Elasticity of Demand. Presented through a management trainee, Anita's first three months at her new job, this caselet presents several of her elasticity-related experiences. While her residence selection explains the price elasticity of demand, her changed brand preferences reflect the income elasticity of demand and her decision to purchase a two-wheeler highlights the cross elasticity of demand. Each of these episodes can be used to discuss and debate on the concept and contours of each of the three types of elasticity of demand. While each of the three types of elasticity of demand has sub-types, this caselet can also be used to examine the revenue relationships based on the elasticity type.



Pedagogical Objectives

  • To understand the concept and types of Price Elasticity of Demand and discuss on the implications of price elasticity for marketers, consumers and the government
  • To examine three types of Income Elasticity of Demand and discuss on the implications of those from the standpoint of marketers
  • To discuss and debate on the concept of Cross Elasticity of Demand and analyze the relationship between substitutes and complements

Case Positioning and Setting

This caselet can be used for:

  • MBA Program in Managerial Economics course – To understand the concept of elasticity of demand and its various types and applications




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