ECONOMICS IN ACTION

HOW COMPANIES APPLY THEM

In Partial Fulfillment of the Requirements

of the Course MBA 205 – Economics for Decision Making

University of St. La Salle

Submitted by

MARILOU G. GABAYA

October 2, 2020
 RED LOGO LIFESTYLE, INC.

Introduction

RED LOGO LIFESTYLE, INC. (REDLOGO), the most exciting player to enter the direct selling arena, is all
about providing a well crafted and meaningful earnings opportunity for people with entrepreneurial
spirits while offering choice selection of quality fashion and lifestyle products and competitive
pricing.

RED LOGO aims to provide good fashion with gentle price points. It reflects the sense of style and
taste of smart, stylish and confident individual.

RED LOGO is backed by a strong management team with extensive years in the fashion industry and
direct selling. RED LOGO is an affiliate of GOLDEN ABC, Inc., the company responsible for developing
five (5) well recognized brands in the Philippine fashion retail: PENSHOPPE, MEMO, OXYGEN,
REGATTA AND FORME.

Vision Statement

To become the most preferred fashion and beauty lifestyle direct selling brand in the Philippines.

Mission Statement

To be the company and brand to be aspire for in the direct selling market by providing driven and
entrepreneurial individuals to have the opportunity of unlimited earnings while offering a wide
range of quality fashion products specifically chosen to suit the growing needs of its consumers.

Services or Products
Economic Tools of Analysis Used

 Elasticity of Demand and Supply - The company is doing promotional discounts on its
catalogue every month which is creating a demand for their specific products for their consumers.
They tend to purchase more if they got bigger discounts so the demand increases. They company is
doing this for their low movement inventory to push up sales or if they have over production of new
products and the turn out of sales is not of what is expected.

 Demand Analysis (Consumer Behavior) - The company is considering the consumption

possiblities of its customers. Whenever there is a new products launch the customers are entitled to
avail of a demo price in which much lower than the catalogue price. Since its a new product and its
not on the budget of the customer, tendency is they will not purchase it. But considering the demo
price given to them its an opportunity to try out the product.

 Marginal Utility Theory - The company is observing of what products are they going to
produce more compared to other products. It is based upon the most consumed products or the
most saleable items every quarter reported. The increased in production means a decrease in their
marginal utility.

 Price Elasticity of Demand - The company increases its price of certain products knowing
that the demand will somehow decrease. But on the larger scale in order to cover the cost of the
opex they need to increase its revenue, in which is very important for the sustainability of the
company.

 Cross Elasticity - the company are producing lipstick and lip tint as part of their beauty
products. Lip tint are substitutes for lipstick. In order to push the sales and increase its quantity
demanded of the lip tint they need to decrease its price. Hence, the quantity demanded for the
lipstick decreases.