Transcript Kasper Pearl - Marie Kuyumgyan`s Blog

Kasper Pearl
Marie Kuyumgyan
What is Kasper pearl ?
 Monopolistic competition
 A pearl wholesale company
What are pearls and who
buys them?
 Pearls are formed within a shell of a pearl
oyster
 Scarce
 homogeneous goods
 Demand for pearls are inelastic
 Only rich people buy pearls
 Veblen good
 ‘Show off’ good
 Luxury item
Demand and supply of pearls
Competitors
 A LOT of similar wholesale market
 Especially in Japan where 50% + of the pearls are
cultivated
 Pearl farmers
Currently
 At it’s break-even price
 No profit as total revenue is equal to total cost
 Large surplus
 Earns normal profit
Next step
Plan: open different
branch in Hong Kong
and China
Cons
Pros
Product differentiation
 Appearance
 Shape, color, material, packaging
 Service
 Home delivery, guarantees, assistant, parking
 Quality
 Increase or decrease quality
 Change in market size and consumer taste and preferences
 Brand reputation/image
 Advertise by spending money and persuade customers
Does not successfully
differentiate its goods
Successfully differentiate its
goods
Short run/ long run
 Short run
 Start up cost
 Wage for labor
 Largest amount allocated
 Staff efficiency
 Long run
 Colossal PR work
 Target audience is different
 Have to increase market size
 Gain the consumers trust so they can choose Kasper pearl over
the other companies
Stakeholders
 Benefit
 Potential employees
 Construction workers
 China/Hong Kong Government
 Loss
 Chinese importer (Middleman)
 Japanese government
 Airplane transportation
All in all…
 Ceteris paribus, company should consider opening
branches in Hong Kong and China, differentiate
their goods so the company can lower average cost
and profit + revenue will increase.