Consumer surplus is a measure of the gain people incur from consuming goods and

services. It is the difference between the total amount that consumers are willing and
able to pay for a good or service and the total amount that they actually do pay (i.e.
the market price).
Producer surplus is measured as the amount a seller earns by selling minus the cost of
production. In other words, producer surplus is the difference between the market price and
the cost of production. It is the measure of benefit to sellers for participating in a market.

The sum of consumer surplus and producer surplus is total surplus. It measures the total
benefit to buyers and sellers from participating in a market. The calculation measures the
total profit to the economy due to a producer to consumer exchange. First calculate consumer
surplus which is the difference between what the consumer is disposed to pay and the market
price. Producer surplus is the difference between the lowest price a producer is willing to sell
and the actual price for which it is sold. Their sum is the total surplus.

Elasticity of a good is the measurement of how responsive an economic variable of the
good is to change in another variable.
Perfectly inelastic means no matter what the price, the same quantity of the goods will
be purchased. E.g.- Goods such as alcohol and cigarettes can be considered almost
inelastic because no matter how much the price is increased, the demand for these goods
will change by very little.
Perfectly elastic means any increase in the price of the good, no matter how small, will
cause demand for the good to drop to zero.














THREATS OF
ENTRANTS
1. FDI policy not favourable for international players
2. Legal barrier from Govt. to control the growth of departmental stores to
save small traditional shops.
3. Lack of infrastructure
4. New entrants require substantial
BARGAINING
POWER OF
SUPPLIERS
1. Because of diverse product range, there are any different suppliers
which include domestic and international manufacturers.
2. Low switching cost for retailers/wholesalers as products are more or less
standardized
BARGAINING
POWER OF
CUSTOMERS
1. Potential customers of high
2. Availability of more choice, degree of dependency will be less.
3. Consumers are price sensitive
THREATS OF
SUBSTITUTES
1. Unorganized retail/ cheap local products can harm the branded products
2. Departmental/discount stores provide stiff competition.
RIVALRY 1. Competitors like Big Bazaar, Reliance retails which sell same products
of daily use
CONCLUSION According to Porters five forces model, Walmart may not face risk in near
future from new entrants. There can be chances of losing the business due
to strong local and established retail chain





















Unwholesome demand:
a) Cigarette: Gold Flakes
b) Alcohol: Johny Walker
c) Drugs
Overfull Demand:
a) Ice cream: Cornetto
b) Chocolates: Cardbury Silk
c) Online shopping: Flipkart
Full Demand:
a) Paracetamol in Medical Stores
b) Cello Ball pens in cosmopolitan stores
c)
Strength:
--No. 1 Oil company in terms of sales turnover.
--Indian Oil and it subsidiaries account for 47%
petroeum products market shares
Weakness:
--Handling hazardous products sometimees lead
to huge accidental loss.l
--Local Govt. levies significant tax
-- Lack of application of advance technology
Opportunities:
-- Explore the market abroad.
--Increasing exploration in India reducing
dependency on import
--Explore market for importing crude oil.
Threats:
--Declining market outside India
--Unstable crude market due to volatality in dollar
--Burden due to subsidy
Indian Oil Corporation Ltd.

Irregular Demand:
a) Demand for Nescafe Coffee in Winter
b) Demand of flight service of Air India during summer vacation
c) Increase in hotel price during New Year
Declining Demand:
a) Philips radio
b) Kodak Camera
c) Maruti 800
Latent Demand:
a) Registered Software of Kaspersky anti virus in affordable prices
b) Low Calorie Cardbury
c) Solar energy car by TATA Motors
Non Existent Demand:
a) Perfumed ball pens by Parker
b) Home PC insurance by Bajaj Allianz
c) Cell phone trackers by Samsung
Negative Demand:
a) Watching movies in Inox rather than watching it in theatres
b) Travelling by flights due to delay by trains
c)

Segmentation
a) Geography: North Indians prefer coffee much over South Indians on account of weather
conditions
b) Inclination towards fast and instant drinks rather than traditional methods of roasting the
coffee beans.
c) Segmentation on the basis of behaviour for those who want to switch/willing to substitute
the deeply entrenched brand of Nescafe

Target Market: People in Upper and Middle class who are ready to shell out few rupees.
Young and Old working professional in offices, night canteens in hostels
Positioning: Famous advertisements on romantic relationship and increase in sense of care
which rejuvenates the emotions of consumer with happiness and love.
Interesting tag lines Bru se Hoti Hain Khusiyan Shuru. picturizing Shahid Kapoor and
Priyanka Chopra does attract young generation They suggest that a single cup of invigorating
Bru coffee can lead to a heightened sense of care, consideration and love for the special person
in your life. Hence the emotions invoked to capture the minds of consumers are Love,
Happiness, Rejuvenated mood, Care and provides a sensory simulation