Bus 410 - Customer Relationship Management

Lecturer:Mary March

Population  and  fresh water  are  most valuable gift  of this planet and it is also increasing tense among the countries  which are  struggling for  controlling population growth  and  economic development. A  result of the research conducted by Sun Diego state university (2014)suggest that  by 2050  almost 1.3 billion  population of the world will be stressed for water. Despite of  consequence of water scarcity  this series of question   explains price elasticity, stakeholder theory, carroll’s pyramids of (corporate  social  responsibility )CSR and  which business use scarce resources in a more effective  manner in terms of consumption of water.

 Q 1.

According to the Anglian water (2014) states that standing charge is the cost of supplying, collecting and treating dirty water. Saltwater (2014) represents that  charges are very every year and it is related to identifying low water pressure, reduce leakage, manage more than one source  and protect treatment water from floods. Therefore, standing charge bearing more others charge than real water consumption.

In economic concepts, Arnold (2010, p.56) cites that  law of demand is when  the price of goods rises quantities on demand fall And as a price fall, Quantities of demand  rise. Law of demand states that lower quantity of demand leads to higher price when others factors are constant. Such as limited water supply increases the water price and according to the Arnold ‘law of supply is price of good rises the quantity supplied with the goods rises and as the price of a good falls the quantity of supply of the goods falls’ (2010, p.68).other hand low of supply demonstrates that the amount of service or product that suppliers are willingly able to supply in market price, supply can clarified as a total amount of product or service that the market can offer. In other word, It is the inverse of the law of demand. For example, when iPhone demand increase iPhone prices rise and demand for the iPhone, increases demand of iPhone supply. Therefore iPhone prices retain iPhone supply.

However, the supply and demand policy involved on meter and monitor charges and it is really impacting on business policy in terms of water consumption. As reported by Ofwat water (2014) states that the water meter is  an equipment that calculate how much of water uses. Supplier use reading from the device to calculate how much they can charge for uses water and Monitor is a device that provides an approximate amount of water using in real time. Charges are relay on some factors like production cost of water management, company profit margin, market demand, business standards and strategy. Stated by the Departments of agriculture and resource economics, university of California (2014) states that water is a private good when it is at home, factory and farm, but it is a public good when it is used irrigation or recreation. Analysing above factors and implementing Demand and supply law, it is unclear that whether charges impact on business policy or not, also It is not found that charges could be a burden for the customer and it will rise customer expenses, and reduce customer saving. But Coliaion Eau Seours (2014) claims it is  not established that water meter charges reduce water consumption. However, Department of enterprise trad and organisation in UK (2014) mention that charges  positively impact on business policy, such as establishing new technology, managing water systems effectively in the future ,providing new information and service for customer.

Price elasticity of demand measures the responsiveness of demand after a change in price. Mankiw and Tylor (2006) state that, Price elasticity of demand is  a calculation  of how much the amount claimed of a good react to change in customer income .Providing evidence  A case study published Ageconsearch.umn.edu website by Klaiber et al. (2010) state that  ‘water present surprising riddle we can neither make it or destroy it  so our supply is fixed yet it is exhaustible ‘.In this scenario  two Block of price structure and rate  for water demand fixed by the municipality, it is changing across the year such as a low, Medium and high usages session. Consumption of water demand in winter in law and summer is high. This analysis based on recorded data provided by municipalities. According to the Unesco (2014) state that water is essential, scare, fugitive, systems, bulky also it is remarked that the water is not substitutable, water is not free trade able, water is complex. Moreover, water is public goods, it is an economic good, but not  normal economic goods, as well water is not homogenous and has a higher merit value. Analysis above factors, it is found that the water is Relatively Unelastic.