Justification Of The Research Question Economics Essay

At 2006, Malaysia has been ranked as the 19th state in the universe in Male Prevalence of Smoking harmonizing to WHO one-year study and harmonizing to PenawaRacun, the bulletin published by National Poison Centre, Malaysia, less than 8 % of the national tobacco users are, in fact, adolescents and at least for every hr, there will be 50-60 emergent tobacco users[ 1 ]. This is a distressing affair so, non merely to the parents of the adolescents themselves, but to the economic itself.

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When a individual fume, he or she will be exposed to the many diseases associated with smoke such as cervical malignant neoplastic disease, lung malignant neoplastic disease, emphysema, take a breathing associated jobs and many more. When a individual, adolescents particularly, are in contact with these sorts of conditions, he or she will be considered as an unqualified merchandise in workforce country. Therefore, this may take to the loss of one cherished labor and therefore, take downing the production degree that can be achieve by a house or company. This will besides cut down the consumer disbursement because they have to provide for the medical attending that is needed for their household member that is ill due to smoking. This will take to the decreasing of gross domestic merchandise of a state and subsequently cut downing a state ‘s gross domestic per capita ( GDP ) .

Due to the grade of the earnestness of this affair, authorities has increase the run to promote the citizen of Malaysia to halt smoke. Such run is “ Tak Nak Merokok ” run, a run to promote by educating the citizen of Malaysia the danger of smoke and how to halt. The authorities besides promote the use of nicotine replacing merchandise ( NRP ) to help the tobacco users who wants to discontinue smoke so that they will be able to discontinue smoke.

For this field of research, I am interested with two trade names of NRP that is NiQuitin and Nicorette. These two trade names offer a broad scope of merchandises that are clinically effectual in assisting the tobacco users to discontinue smoke. NiQuitin work in a manner that the consumption of its lozenges will be cut down as clip passed by, by clip passed by, it is approximative to be 9 to 10 hebdomads. Nicorette besides work in a same method but in a longer period of clip. Due to the broad scope of Nicorette merchandise exist in the market, I am more interested on the Nicorette lozenges as it has same properties to NiQuitin lozenges, which are it is consume orally. Nicorette has its ain manner of consuming and takes approximately 16 hebdomads for a individual to discontinue smoking all together.

Overall, the bing of NiQuitin and Nicorette has served as one of the supporters in Malayan economic environment. It helps people salvage money by cut downing the ingestion of coffin nails, which means less passing on the “ unbeneficial ” points and more disbursement towards the field that needs more investing which is instruction and health care. By discontinuing smoke, it besides means that less people are ill, which means more work force that can function the houses and therefore, increasing the productiveness of a house. All of these will inadvertly increase the Malayan GDP and therefore, the economic growing rate is said to increase.

But one thing for certain, the NiQuitin and Nicorette are created from two different houses that is GSK ( M ) Sdn Bhd and Johnsons & A ; Johnsons ( M ) Sdn Bhd and harmonizing to the history of both NiQuitin and Nicorette, Nicorette is introduced in the Malayan market foremost compared to NiQuitin. So, based on the statements above, I will look into on to what extend does the debut of NiQuitin in the Malayan market affects the demand for Nicorette in the country of Sepang, Selangor.

1.2 Justification of the research inquiry

Trying to utilize all of the NRP exist in the Malayan market will be inefficient as it will means many informations that have to be covered and therefore, increasing the hazard of botching the information received. To extinguish these possibilities, merely two prominent and established trade names which are NiQuitin and Nicorette will be used. Besides, this will do the research more narrowed and specific.

Sepang is a township that is inaugurated at 1983. Located near KLIA and Kuala Lumpur, it is subjected under rapid development in the last 20 old ages. So, as a freshly developed town, it is suited capable coverage as it is, as we speak, exposed to the development cost such as societal decomposition, environmental jobs and exposure towards demerit goods. So, smoking jobs are bound to be found conspicuously across the township.

Other than that, the ground Sepang is used as capable coverage is because the blooming of the pharmaceutics existed in this country. As reference before, freshly formed townships will jump to hold a development cost such as environmental jobs. These factors will take towards an unhealthy life style of the occupants of the town themselves. These factors will besides take towards the population bloom of the pharmaceutics in that country.

Based on the factors reference above, the research inquiry, “ To what extend does the debut of NiQuitin in the Malayan market affects the market for Nicorette in the country of Sepang, Selangor ” is formed.

1.3 Aims

The chief aim for this research is to measure the effects of the debut of NiQuitin in the Malayan market towards the market of Nicorette. It can be evaluate by utilizing a few method. First, it can be evaluate by comparing the demand for NiQuitin and Nicorette from 2009 onwards. Second, it besides can be evaluate by comparing the snaps of both merchandises. Then, we can compare the demand from the pharmaceutics for the both merchandises from 2009 onwards. Finally, we can measure this by comparing the gustatory sensation and penchants of the users of one of these merchandises.

1.4 Methodology

The undermentioned method is used to obtain the informations needed:

Primary Datas: Through study and interviews research method as the method is the most common methodological analysis in research because it allows for the aggregation of important sum of informations from ample population, harmonizing to Gray ( 2004 )[ 2 ].

Secondary Datas: Through books, related articles, statistics and documents

1.5 Restrictions

A few restrictions is spotted during the research is executed. Firstly, some of the informations required for this research was unavailable due to the confidential nature of the informations that if falls on the incorrect custodies ; it will convey a immense harm to the houses on their reputes and in fiscal footings.

Second, the house are detaining in giving their information to the research worker. They are a small spot hesitating to give the information at first but after a few blarney Sessionss, I managed to pull out the information from them.

Finally, the involuntariness of the respondents to give their full cooperation during the study session. This is because non many people who want to acknowledge that they are tobacco users, allow entirely seeking to discontinue smoke.

2.0 FINDINGS AND EVALUATIONS

2.1 COMPARING THE Demand FOR NiQuitin AND Nicorette

2.1.1 Demands for NiQuitin

From the debut, we can see that Sepang has experience negative outwardnesss of ingestion, which is a signifier of market failure. Negative outwardnesss of ingestion happen when the ingestion of a good or services gives an inauspicious consequence to the 3rd party. The ingestion of coffin nails by tobacco users brings an inauspicious consequence to the society such as wellness issues and environmental issues. Because of this, the debut of NiQuitin seems important to undertake these issues therefore, increasing the demand of NiQuitin in the market.

Demand can be defined as the sum of merchandise or services that the consumers are willing and able to buy at a series of possible monetary values during a specific period of clip[ 3 ]. Harmonizing to the Law of Demand, ceteris peribus, as the monetary value degree addition, the measure of point demanded by the consumer will diminish and frailty versa. The motion along the curve will go on due to the pricing factors whereas the motion of the curve itself is due to the non-pricing factor such as external daze[ 4 ].

NiQuitin is a merchandise of GlaxoKleinSmith ( GSK ) , which is distributed by GlaxoKleinSmith ( M ) Sdn. Bhd in the Asia Pacific part, which is non tied with any understanding or jurisprudence that subjected the production of NiQuitin to be on a certain sum. So, they are free to bring forth and administer any sum of NiQuitin based on the demand of the market.

NiQuitin comes in two different doses harmonizing to the frequence of the tobacco user. If the tobacco user is a non-frequent tobacco user, the pharmaceuticss will propose the tobacco user to take 2 milligrams NiQuitin lozenges to assist the tobacco users quit smoking piece for an devouring tobacco user, the pharmaceuticss will propose them to take 4 milligrams lozenges in order to efficaciously assist them discontinue smoke. One box of 2 milligram NiQuitin lozenges will be RM 52.80 while for one box of 4 milligram NiQuitin lozenges will be RM 69.90.

Year

2009

2010

2011

DOSAGE/ milligram

2

4

2

4

2

4

DEMAND/UNIT

( BY DOSAGE )

5 690

3 490

5 111

2 441

4 105

2 322

Sum

Demand

9 180

7 552

6 427

Table 1 The demand for NiQuitin at the Sepang country for the past 3 old ages

Now, allow ‘s analyze the demand form for NiQuitin.

Price ( RM )

Supply

P1

D2

D1

Quantity ( units )

Q1

Q2

Producer ‘s excess

Graph 1 The demand-supply graph for the 2 and 4 milligram of NiQuitin from twelvemonth 2009, 2010 and 2011

Based on the graph, the gross revenues gross declined from twelvemonth 2009 to 2011, doing the demand curve to switch to the left from D1 to D2. But since GSK ( M ) SDN BHD does non be after for monetary value decrease of NiQuitin anytime in the hereafter, this has do the measure demanded to the NiQuitin merchandise is at Q1 while the consumer ‘s demand is at Q2. This has cause manufacturer ‘s excess on the NiQuitin production.

There are a few factors that lead to the lessening on the demand of NiQuitin for the past few old ages. One of it is gustatory sensation and penchants of the consumers. When NiQuitin was foremost introduced to the Malayan market, the gross revenues of the NiQuitin addition significantly due to the advertizements and many testimonies from the bing users of NiQuitin. But as clip goes by, many of the consumers of NiQuitin had stop utilizing the merchandise due to 2 chief factors deduced from the study conducted that are the side effects of utilizing NiQuitin on their wellness and the ineffectualness of NiQuitin to extinguish their dependance on nicotine[ 5 ].

Many of the respondents response stated that the use of NiQuitin bring side effects to them such as sickness, purging and terrible concern. Harmonizing to Miss Norhayati binti Yunos, the sale helper for Sia & A ; Sia Pharmacy Sdn Bhd, those side effects are normal as it is really one of the markers for nicotine backdown symptom[ 6 ]. Most of them considered those markers to be the chief factor of their decreasing degree of productiveness, therefore they will eschew off from any substances that will do them to be ill and this includes the use of NiQuitin.

Harmonizing to the study, 12 % to 13 % of the respondents had already attempts to utilize NiQuitin to control their dependence towards coffin nails. But, as clip goes on, the figure of coffin nails that they consumed in a twenty-four hours, harmonizing to the informations obtained, increase whereas the use of NiQuitin should enables them to halt smoke in 16 hebdomads[ 7 ]. To forestall misallocation of disbursement, they decided that they are no longer afford to purchase any longer NiQuitin lozenges and the money used to purchase the lozenges are so allocate to another sector such as the household ‘s health care. Although Miss Norhayati binti Yunos said that self-control are required in order to successfully discontinue smoke, but many of NiQuitin consumers are non cognizant of that fact therefore faulting it on NiQuitin.

Those factors mention above are the chief factors that contribute towards the worsening of the demand of NiQuitin. Although there are many factors that besides contributes towards the worsening in NiQuitin demand such as handiness to the merchandise and household economic system, those factors are non suffered by the bulk of the respondents. So, we are non obliged to utilize those factors as our chief factor.

2.1.2 Demands for Nicorette

Now let ‘s travel our attending to Nicorette. Nicorette is a nicotine replacing merchandise that is produced by Johnsons & A ; Johnsons. Nicorette offers an array of merchandise but our focal point for this research is about their Nicorette lozenges. Nicorette, like NiQuitin, is non subjected by any jurisprudence which required Johnsons & A ; Samuel johnsons to bring forth Nicorette in a certain sum. Therefore, they are free to bring forth any sum of Nicorette lozenges as they please. Similar to NiQuitin, Nicorette offers 2 different doses of the lozenges that are 2 milligrams and 4 milligram. They are sold at RM 25.00 for 2 milligram box and RM 75.00 for 4 milligram box.

Year

2009

2010

2011

DOSAGE/ milligram

2

4

2

4

2

4

DEMAND/UNIT

( BY DOSAGE )

5 111

3 400

5 023

2 733

4 921

2 011

Sum

Demand

8 511

7 756

6 932

Table 2 The demand for Nicorette at the Sepang country for the past 3 old ages

Let ‘s analyze the demand for Nicorette for the past 3 old ages

Price ( RM )

Second

Pe

Quantity ( units )

Q2

Q1

D2

D1

Graph 1 The demand-supply graph for the 2 and 4 milligram of Nicorette from twelvemonth 2009, 2010 and 2011

Similar to the demand-supply graph for NiQuitin, the demand-supply graph for Nicorette displacement to the left from D1 to D2, but Johnsons & A ; Johnsons does non be after for any future monetary value addition, therefore manufacturer excess said to go on due to the demand for Nicorette is at Q1 while the merchandise supply is at Q2.

There are many factors that contribute to this status. The chief factor that is identified from the study conducted is because of the debut of NiQuitin. Miss Norhayati binti Yunos said that when NiQuitin is introduced during 2008, the demand of Nicorette started to drop as GSK ( M ) Sdn Bhd launched a national advertizement about their merchandise NiQuitin while Nicorette have less advertisement on the national mass and electronic media.

Therefore, when we compare the demand-supply curve of the two merchandises, we found that both of the merchandises experience a worsening demand. But if we look at the grade of the diminution and besides based from the statement made by Miss Norhayati binti Yunos, we can state that Nicorette is the merchandise that have a higher grade of diminution in demand compared to NiQuitin.

2.2 Comparing the snaps of NiQuitin and Nicorette

Elasticity are the step of reactivity[ 8 ]. Therefore, it shows if there is any factor that contributes the monetary value degree alteration, what the magnitude is. For this research, I will be utilizing income snap of demand ( YED ) . This is due to the fact that the monetary value of NiQuitin and Nicorette does non alter since it is foremost introduced into Malayan market while Malayan had undergo an betterment in their income from 3 old ages prior. Therefore, it is apprehensible for us to utilize the YED to mensurate how much the demand for the merchandise alteration if the incomes of consumer alteration[ 9 ]. The expression to cipher YED is given like this:

For the alteration of per centum for the demanded measure of the merchandise, we merely necessitate to happen the mean alteration across the three old ages and split it by the entire figure of difference across 2009 to 2011 before multiplying it by 100

The alteration for NiQuitin demand from 2009, 2010 and 2011:

Based on the Budget 2007, the public sectors had experience an addition in their monthly pay that is 35 %[ 10 ]and most of the respondent that used either both of the merchandises is in fact a public retainer. In concurrence to that fact, we will straight utilize the per centum addition in pay to stand for the per centum alteration of income of the consumer.

Therefore, we can cipher the YED.

The positive value of the YED of NiQuitin shows that NiQuitin is normal goods as for the normal goods, the YED will be positive and if the measure demanded is less compared to the addition in income of the consumer, so a value between 0 to 1 will be obtain and those points will be income inelastic and frailty versa. Therefore, we can state that NiQuitin is an income inelastic normal good.

Then do the same to cipher the snap of Nicorette.

From the positive value of YED above, we can state that Nicorette is income inelastic normal goods.

By looking at both of NiQuitin and Nicorette YED, we can assume that NiQuitin and Nicorette are inelastic even if the rewards of the bulk of the respondents increase up to 35 % . But if we looking at the magnitude of the snap, we can clearly see that NiQuitin has higher YED value compared to Nicorette. Therefore, we can state that the demand for Nicorette has higher snap compared to NiQuitin. Theoretically, this will do the demand for NiQuitin more resist towards any market rising prices compared to the trade name Nicorette as any alterations of income of the consumer will convey less consequence towards the demand for NiQuitin as compared to Nicorette.

2.3 Comparing the demand for NiQuitin and Nicorette by the local pharmaceutics.

Harmonizing to the interview conducted with Miss Norhayati binti Yunos, she said that NiQuitin and Nicorette are on the rack medicine, which means the consumers will hold an easy entree to those trade names. By that, we can safely reason that the manufacturer will besides hold no job to entree those pharmaceuticss. Therefore, we can safely extinguish the factor of handiness to the consumer from our rating.

There are about 15 pharmaceuticss runing in the country of Sepang. This pharmaceutics includes the pharmaceutics that is established by its ain or in the clinic. Out of 15, merely 3 samples managed to be taken due to assorted factors such as the handiness to the pharmaceutics, the pharmaceutics does non sell the NRP and the involuntariness of the pharmaceutics to collaborate. The 3 pharmaceuticss are Sia & A ; Sia Pharmacy, Klinik Rashidah ‘s pharmaceuticss and Klinik Siva ‘s pharmaceutics

Pharmacy

Measure demanded

2009

2010

2011

Sia & A ; Sia pharmaceutics

1 677

1 455

1 333

Klinik Rashidah

2 106

1 834

1 627

Klinik Siva

1 005

960

800

Table 3 The demand of NiQuitin and Nicorette from the pharmaceuticss from 2009 onwards

As we can see from Table 3, the measure demanded for NiQuitin and Nicorette lessening as the clip addition. By and large, the three pharmaceuticss said that they decrease their demand for those merchandises due to action of GSK ( M ) Sdn Bhd and Johnson & A ; Johnson ( M ) Sdn Bhd non to diminish the monetary value. The pharmaceuticss do hold their cost of production to be maintained. In order to make that, the least popular point bought by the consumers does non hold to be mass ordered.

To be more specific, Sia & A ; Sia pharmaceutics gave out that the ground people in their country do non purchase the merchandise anymore is the higher cost of life. Sepang is merely 30 proceedingss off from KLIA. It is besides one of the sites for Greater KL undertaking. Therefore, Sepang undergo rapid development from the last 10 to 20 old ages. As the development addition, so does the cost of life of the society. For the rich citizen, the addition cost of life will non convey much injury to them. But for the lower income citizen, the addition on cost of life agencies that the money that they ‘ve got can non be spend towards their wants any longer as they have to provide to their household ‘s demand and many of the tobacco users in this country, based on the study, are from in-between to take down category citizen. Therefore, seeing NiQuitin and Nicorette as a thing less needen by their household, they decided to non buy those goods any longer. This ground besides applies to Klinik Siva.

As for Klinik Rashidah, the chief ground for the worsening on the demand is due to the fact that at Klinik Rashidah country, people who smoke are acquiring lesser, harmonizing to the interview conducted with Miss Norhayati binti Yunos. This, harmonizing to her, is due to the consciousness of other method to halt smoke that usage less money such as the “ cold Meleagris gallopavo ” manner. Therefore, people opted for this method as it is effectual and utilize less money.

But, harmonizing to the three pharmaceuticss, the demand for Nicorette does diminish for a piece when NiQuitin is introduce largely due to advertisement in telecasting. But after a few months, the form of the NRP merchandise returns to its normal rate that is diminishing.

2.4 Evaluation & A ; Conclusion

Findingss from this research does shows that the debut of NiQuitin affect the demand for Nicorette in the country of Sepang.

First, it causes the demand for Nicorette to be more inelastic compared to NiQuitin. Prior to the debut of NiQuitin, manufacturers Nicorette do non hold to worry about increasing their monetary value as they are the exclusive NRP supplier in the country of Sepang. But, since NiQuitin is comparatively cheaper than Nicorette, they had suffered some complications out of it such as the lessening in demand. But they can non diminish the monetary value as any alteration on monetary value will hold small important towards its demand. Therefore, it has to remain at that degree to back up its cost of production. This will do Nicorette uncompetitive towards NiQuitin and other types of NRP trade name

Second, the debut of NiQuitin serves as a competition to Nicorette. Based on the interview conducted with Miss Norhayati binti Yunos, during the debut of NiQuitin, the demand for Nicorette does worsen when NiQuitin is introduced. As a consequence the demand-supply graphs of Nicorette displacement to the left. By judging the demand for NiQuitin compared to Nicorette, we can state that the debut of NiQuitin does impact the demand for Nicorette by take downing the demand for Nicorette from 2009 to 2011.

To reason this research, allow me give some suggestion on how to increase the demand for NRP, specifically for NiQuitin and Nicorette. First, the maker must take down the monetary value degree so that, theoretically, the measure demanded for those merchandises will increase.

Second, the maker of NiQuitin and Nicorette can publisized their merchandise because it is proven based on wat happened to NiQuitin when they run a national advertizement run.

Third, the authorities can give them subsidies so that their cost of production will diminish, guaranting the addition in degree of production and efficaciously diminish the monetary value degree, therefore increasing the figure of consumer.

In a nutshell, to reply the research inquiry, the debut of NiQuitin does convey effects to the demand of Nicorette by take downing the demand of Nicorette compared to NiQuitin and doing Nicorette income inelastic compared to NiQuitin.

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