Supply and Demand for Head and Shoulders Essay

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Marketing, Supply and Equilibrium: Head and Shoulders by Proctor and Gamble

The Head and Shoulders product of Proctor and Gamble is price inelastic for those who have brand loyalty and will buy the product no matter what the price is. For those who like the product but will go with a cheaper off-brand if the option is available, so long as the off-brand is as effective, will do so causing the product to be price elastic for this group of people.

Two non-price factors that impact the demand of Head and Shoulders are quality of the product and marketing of the product. Quality (effectiveness of the shampoo to stop dandruff) is the number one reason it is purchased, as it is a specialty shampoo that is used for this explicit purpose. If the quality is high, the demand increases. Marketing is the other factor: if it is marketed well, the quality does not have to be superior to its competitors; it merely has to achieve place within the consumer consciousness. When the consumer sees the product on the shelves, he will recognize it as the one he should be because he has been subject to an extensive marketing campaign (Head and Shoulders: The World Leaders in Dandruff and Scalp Care, 2015).

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Two non-price factors that impact supply are technology and competitors. As technology changes over time, the supply is impacted as the means of production make it easier to produce. Likewise, as competitors come into the market, the product can be supplanted by others in the industry that cultivate greater brand loyalty or offer better quality or better price.

The industry associated with Head and Shoulders is the health and grooming industry and specifically the dandruff shampoo sector of the market (though Head and Shoulders does offer a variety of shampoos and conditioners that have a broad range of appeal). The market equilibrium associated with this product can be found at the point where the supply and demand curves intersect.

The effect of changes in the supply and demand on the market equilibrium of this product depends on the direction of those changes. If supply increases without demand, the market equilibrium will fall to a lower point on the curve. If demand increases with supply, the point will remain at the same constant level. If demand increases and supply does not, the point will likely rise and the price of….....

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