Major Project for ECON5541, S2 2022

Market and Product Report

You need to come up with an original business in one of the following markets:

1. A food truck
2. An electric scooter manufacturer
3. A dairy farmer
4. A shoe company

Having chosen your product, you need to do the following:

Work out what your product is going to be

- Give it a name
- Be specific about what it is, but don’t agonise over the choice
- Note: this is NOT a unit in product development or entrepreneurship. What the
product is matters less than how you go about looking at the economic
circumstances of the product, and the market that product will be operating in.

Important Dates to Remember

Part 1: Overview –
• due before midnight Sunday night, August 14
• word limit: 200 words
• give a detailed overview of your product
o what it is,
o why you have chosen it,
o what makes it different (if anything)
o Simple demand and supply analysis:
 What factors will influence consumer demand for this product?
 What factors will influence supply?

Part 2: Product and consumer report

• due before midnight Sunday, 4th September
• word limit: 1,000 words
• focuses on the characteristics of the product itself, such as:
o What kind of consumers are you aiming at? i.e. Who’s your market? Be as detailed as
possible:
 Demographics
 Geographical considerations?
 Incomes
 Do they have alternatives?
 Etc
 o Responsiveness of these consumers to changes in prices (elasticity). What factors do you
think would influence this responsiveness for this product?
o What are the revenue implications of this for your business?
o Impact of diminishing marginal returns on your production processes
 What are the major operating costs of your business? Get as much information as
you can on this.
 What are the major fixed costs? Variable costs?
o Long run versus the short run costs of your business
 Economies of scale? Of scope? What are the opportunities (if any)?

Part 3: Market and strategic considerations

• due before midnight Monday, October 2nd
• word limit: 1,500 words
• What kind of market are you in? List the characteristics in as much detail as you can. Some examples:
o How many competitors do you have? Actual and potential;
o Where are they (domestic vs international)
o How long has the product been around?
o Product differentiation? Opportunities for niche product? Or are products quite
standardised? etc
• Pricing strategy
o If using cost-plus pricing, what will be your strategy for your product. Why? (i.e. what factors
determine your mark up?)
o If not using cost plus, what are you basing it on?
• Opportunities for price discrimination
o Current examples
o Think of your own possible options for price discrimination
• Apply the five forces model to your own product, and then use that to gauge your possible growth
strategies
o That is, think of your optimal growth strategy going forwards
 Internal vs external
 Differentiation
 Vertical vs horizontal integration
 Strategies around costs (eg labour vs capital costs)
• Think of any externalities that may be present in your product (positive or negative, on either the
production or consumption side)
o Current environmental policies that arise from this?
o Implications of this for your pricing now (or in the future) – eg what is the likelihood of the
government imposing a carbon tax? Tradable permit system? Etc
o Note: there may not be any, or they may be minor. If so, focus on the issues below
• Government and competition policy
o Current competition policy in your market
o Any evidence of illegal (collusive) activity. Use game theory to discuss why this may or may
not have occurred
o Do you have an industry body? If so, what do they do? (lobbying, advertising etc). Why do
they do that?
o Impact of actual or potential taxes on the demand for your product
General comments
• Point of submission: each part will be done within Cadmus, via LMS. NOTE: you are expected
to write your assignment within Cadmus. Please do not copy and paste your assignment into
Cadmus from (for example) a Word Document.
• A rubric is available for Parts 2 and 3 to view. Part 1 is an overview that is worth 5%.
• The questions I have posed above are not to be rigidly employed/answered. These were
merely just a series of issues and questions for you to consider about your product. Because
you all have different products, some of these questions will be more (or less) relevant to
you. It is up to you to decide what the important economic issues are for your product,
based on the microeconomics topics and issues we have covered in the first 7 weeks of the
course;
• You are not expected to collect or collate specific market data for your product (it is often
difficult to obtain this information publicly anyway). However, you are free to use any
available data that you believe is important for your report, as long as it is relevant and adds
to the strength of your report;
• In a similar fashion, although formal academic research is not necessary (beyond my notes
and the textbook), you will still need to research your market to find out about issues such
as market competitors, major input/factor considerations, prices and so on. Please note that
any information obtained from any resource will still need to be cited and referenced. In
the Business School we use the APA Style of referencing;
• how you structure this report is up to you (although see the rubrics for a rough guide on
this). The idea is to develop a picture for the reader of your product, where it fits into an
existing market, and therefore some of the major economic risks and opportunities
associated with operating this business. You will be expected to use many of the major
economic models and concepts we have used in this course (which is where you can use the
questions posed each fortnight as a guide);
• it is very important that you use what you have learnt from your economic theory as much
as possible in each of the reports. This is not a marketing unit!
• Please note that you are expected to present this in a professional manner – around 20% of
the allocated marks are towards your writing and presentation of the report.