In my opinion, the price elasticity of Barry Callebaut company is elastic. It is because there are a lots of substitute goods in the market. So, the consumer will choose the another product to buy. Elastic is a condition when a small percentage change in the price of product will lead to a larger percentage in the quantity. So, in the context of demand when the product at high price, the demand for this good will decrease because they maybe will choose another product that provide at a lower price. It is because consumer are very responsive to change in the price of product. So I think for Barry Callebaut Company, they must sold their product at affordable price to get the high profit because a decrease in price will lead to an increase in total revenue. For example, cocoa and vanilla which is a substitute goods. So, when increase in cocoa price the demand for cocoa will decrease and the demand for vanilla will increase. So we cannot get the high profit if we sold this goods with high price. Secondly, in my opinion Barry Callebaut must choose the cheapest method of production and the most efficient techniques to minimum the cost of production. So the seller can sell the good at a lower price and can get the highest profit. Next, Barry Callebaut also must to produce their product at a high quality and a greater efficiency. It is because in the market whatever the price of the product the customer will buy it as long as our product is more quality than others. Then, Barry Callebaut can also produce the goods and service for which there is a high demand from customer so as to enjoy higher profit. When we follow their needs, of course whatever product that we produce, the customer still buy it because its demand from them. Advertisement good normally have a higher demand because of awareness. This method will attract the people to the goods and services. For example, Barry Callebaut can introduce the cocoa via advertisement to get a high demand with high profit. 

 

Barry callebaut has to target the higher margin profit company so that the company wont affect if barry callebaut increase the price of cocoa as the profit of their company is high.This is because the demand that the chocolate factory get from their customer is realy high so that they need non stop supply from barry callebaut.for example if Hershey company cannot improve their selling barry callebaut should consider to find another chocolate factory that is more stable and with higher profit margin 

Barry callebaut should aim to expand their company to the country that has high population.this is because the demand there will be much more higher as the rate of people who are buying will increase .they also should consider the composition of the population proportion between children or adult because usually children tend to love chocolate more.for example India has the population of 1343239923 people there so Barry callebaut should consider to produce more there 

Barry callebaut also should consider to advertise their company to society.this is because we cannot assure all people know about their company so by choosing to advertise their company to society people will get to know about their company well and start to make research about their company.For example Barry callebaut can use social media to deliver their advertisement as in this century its all about technological information. 

From this case study we can conclude that chocolate is an elastic demand which mean people can choose whether to buy chocolate or anything else that can replace chocolate.BARRY CALLEBAUT should consider to decrease the price of chocolate that the company distribute.This is because when the demand is elastic the dcrease in price will lead o an increase in price because people will ought to buy the cheapest and the quality product.So the company also should consider to make an advertisement or promotion in order to grab customer attention.The company also should target the buyers which had a better income this is because they will be less sensitive towards the price changed.For example a shirt is RM 70 when the price increase by RM 10 wealth person wouldn’t affect by the price change however for the poor man the change in price will affect them a lot so they will find another sources to replce the original sources.Looking from proportion of the expenditure good this company can increase their price a little bit when the demand is too high because when it increase the price a little bit this wont affect people as it only a small portion of their income.The company also should provide a better services policies or terms of payment this because studied has proven that service terms of payment by credit instead cash are more profitable.They should prepared a better customer service in order to enhance the demand to the maximum limit.From the government aspect,the government should reduce the tax so that people will have a variety of choices they can make as the company also will decrease their price. 

The first thing that Barry Callebaut need is making clear understanding and get enough information about elacticity of good and service to help him making right decisions .So, he need to lower the price of the goods.It is because his company isn’t in good condition lately which is excessive capacity for production or services (overcapacity) but have a low demand . So ,if he lower the price ,the elasticity of co-effiecient will be more than 1 which is mean the term will be elastic. This is because If the price increased ,the change in quantity demanded as a result of rise in price by him, will affect the total consumer expenditure and affect the revenue of the firm.

First  of all, Barry Callebaut company must know the level of price elasticity of demand. In this case, Barry Callebaut should use the elastic demand method by decreasing the price of product and this method will lead into a larger percentage change in the quantity demanded. In my opinion, the profit is not important in business because the most important thing in business are the customers and how we serve them (total revenue). Thus, Barry Callebaut need to know where is the best place to promote his product (which is at middle class circle).  The more customer they attract, they higher the profit they gain. Since customer or demand of quantity are sensitive with price changes, the decreasing of sales price will lead an increase in total revenue. In other aspect, the government should lower the tax because the demand of cocoa is elastic. So, Barry Callebaut can offer his costumers the lower price. Otherwise the total revenue will be increased. 

 In my opinion, the knowledge of elasticity can help Barry Callebaut in its decision making. Price elasticity of demand is a measure of change in quantity demanded of a commodity relative to a change in its price. If the demand is inelastic, an increase in price results in increased revenue. If the price rise results in decreased revenue, the demand is elastic.  The law of demand states that the lower the price of product, the higher the quantity demand, ceteris paribus. From the Barry's situation he had to reduce the price of cocoa product so that the quantity demand of the cocoa product will increase. The cocoa product is an elastic demand that states in the degree of price elasticity of demand. The most important thing is Barry Callebaut should do some promotions to their customer to gain their attention especially when consumer income increase, where consumers demands for more goods and better services.  He should lower the price of the coco too because by decreasing the price of the product can lead to the increase of the quantity of demand which can increase the revenue of his company. Besides, he also must set the price of the cocoa  according to the cost of producting them. 

In my opinion, the information on price elasticity of demand will be useful for the seller to adjust their selling price since it will affect the total revenue. We  learned that a  small percentage of change in the price of a good will lead to larger percentage of change in quantity demanded is the definition of elastic demand. His company’s profit drop all the way down. 

In this case, he should use the Normative Analysis that deal with the question of “what ought to be”. With this kind of analysis, he would know what the economy should be used to achieve the economic goals. Futhermore, he should know the basic economic problem on for whom to produce. He must acknowledge, when he increase the price the higher incomes might not buy their products and the lower incomes will think twice to buy the products due to other best quality products that they can buy. 

Law of demand states that the higher the price of a good, the lower is the quantity demanded for that good and the lower the price, the higher is the quantity demanded, ceteris paribus. Barry Callebaut should be taught about the determinants of demand. Before he produce the products, he should study  the customers’s income(income level), population or number of buyers, do advertisement on his products, price of realated goods and  level of taxation in the area he sale his products.Therefore, I would say that this is an elastic demand. 

In my opinion Barry Cellebaut has to decrease their price of the cocoa in order to increase the demand. This is because Barry Cellebaut has to follow the law of demand. This is because it is law of demand, the lower the price, the higher the demand for the goods. So Barry Cellebaut has the think to decrease their price in order to increase the demand. For example, Barry Cellebaut can use a better technology to save energy and to save workers in order to decrease the cocoa price. As a conclusion by using this technological tools in their factory Barry Cellebaut can decrease their cocoa price. Next, Barry Cellebaut can make an advertisement about their company because by doing an advertisement, people will get to know about their company. For example, Barry Cellebaut can put their advertisement on media such as television so that who watch the television will know about their company. As a conclusion, by doing an advertisement for their company, it will increase their profit and demand because people will get to know about their company. Furthermore, Barry Cellebaut can think to start a mass production in a country that have a higher population such as America. This is because higher population will increase their demand also because a lot of people will demand for their cocoa. For example Barry Cellebout can start to think to invest in American chocolate factory so that they can produce a lot of cocoa for chocolate factory.

 In my opinion, the knowledge of elasticity can help Barry Callebaut in its decision making. Price elasticity of demand is a measure of change in quantity demanded of a commodity relative to a change in its price. If the demand is inelastic, an increase in price results in increased revenue. If the price rise results in decreased revenue, the demand is elastic.  The law of demand states that the lower the price of product, the higher the quantity demand, ceteris paribus. From the Barry's situation he had to reduce the price of cocoa product so that the quantity demand of the cocoa product will increase. The cocoa product is an elastic demand that states in the degree of price elasticity of demand. 

First of all, if you want to help Barry Callebaut solve this problem is to provide a clearer and more detailed disclosure of the definition of elasticity. Definition of elasticity is measure of the responsiveness of demand and supply of a good or service to an increase or decrease in its price. In my opinion, Elastic demand is condition in which a small percentage change in the price of a product will lead to a larger percentage change in quantity demanded while inelastic demand is a condition in which a large percentage change in the price will only affect the quantity demanded by a small percentage. For example, if Barry Callebaut when the price of chocolate is decreases by 5%, the quantity demanded for the chocolate will increases 10% and this will increase the company's profit. To prevent Barry Callebaut from losing the company, Barry Callebaut should reduce the purchase of cocoa beans and buy cheap substitutes that could reduce production costs for storage. 

In my opinion, Barry Callebaut should decrease the price of the cocoa products to increase the demand of the cocoa products, as stated in the law of demand. With that, he would be able to avoid his loss that he’s been facing for quite some time. With the knowledge of elasticity, Barry would be able to make his decisions wisely based on the determinants of price elasticity of supply such as time dimensions and nature of the market. 

In my opinion, Barry Callbout should not  sold the cocoa with higher price because it can affect to his profit. He should have knowledge about price elasticity. This is because the law of demand , the lower the price , the higher the demand . Thus , he must set up the price according to economy today to fight with other company. 

 

The Swiss-based company, which is also the world’s biggest industrial chocolate maker, has thus

reduced its sales growth targets in an effort to try and maintain profit margins.

Additionally, the company will cut its production capacity in Port Klang, Malaysia, with

immediate effect and shut down its cocoa factory in Bangpakong, Thailand, by end January 2016

– and indication that overcapacity and falling demand in Asia are hurting profits.

According to the company’s full-year 2014/15 results report, “A challenging market environment

characterized by a historically low combined cocoa ratio triggered by grinding overcapacity and

low demand for cocoa products had a negative impact on profitability”.

Since early 2014, cocoa grinders globally have faced a dismal combined ratio – the processing

margin for both cocoa butter and powder – while cocoa bean prices soared to four-year highs. As

a consequence, many large chocolate companies have raised their retail prices, affecting

consumers and demand in the process.

The cocoa demand in Asia has been hit particularly hard, despite it being an emerging market for

chocolate. Even Hershey Co., for whom Barry Callebaut provides chocolates, has noted slowed

growth in China for the past five quarters. This was because cocoa grinding, which separates the

beans into powder and butter, has fallen in Asia.

Asian cocoa bean processing has been relocating from Malaysia, whereby global companies,

such as Olam International Ltd. and Cargill, have opened their cocoa processing facilities in

Indonesia in 2014. Meanwhile, some independent and older grinders have reportedly closed

down in recent years as they were unable to compete