This website uses cookies to ensure you have the best experience. Learn more

Business Proposal Essay

1757 words - 8 pages

Business Proposal
ECO/561
August 18, 2014
Karen Yancey

Business Proposal
Existing industries bring new products into the market regularly. Sometimes there are already similar products from other industries in the market and sometimes industries bring in a completely new product. One such industry is Tresemme. Tresemme is a professional hair products company that sells everything from shampoo and conditioner to hair products that renew a hair’s health. If Tresemme decided to bring in a product that would cause curly and/or frizzy hair to dry straight, the company would have to consider the market structure, elasticity of the product, the pricing in relation to elasticity, pricing ...view middle of the document...

This means that consumers pay attention to the price they are paying because there are several companies selling hair care products and the consumer can choose a different product if the price is raised. Individuals who consider a product that straightens their hair a necessity may not pay a lot of attention to the price of the product if it changes, but an individual that may not consider a product that straightens their hair a necessity will pay more attention to the prices. If Tresemme introduced a new straightening product it would be elastic because there are several companies that sell hair care products and consumers could choose a different company if the price was too high.
Marginal Cost and Marginal Revenue
Marginal cost is “…the added cost of producing one more unit of output” (McConnell, Brue, & Flynn, 2009, p. 51). In the case of Tresemme’s new product for straightening hair, it may be best to start with a lower number of unit output. This is because it is a new product and it is unknown how the consumers are going to react to the product. There is potential that the product sells very well, but there is also potential for the product not to sell well and then money will be wasted as a result.
“Marginal revenue is the change in total revenue (or the extra revenue) that results from selling one more unit of output” (McConnell, Brue, & Flynn, 2009, p. 178). The marginal revenue is going to be based on the marginal cost. However, as stated before, if Tresemme starts with a smaller marginal cost because the product is new that is also going to lead to a smaller marginal revenue. It may be important to start by introducing the product to see how consumers are going to react before mass producing the product.
The best way to maximize pricing for Tresemme is to increase revenue while decreasing cost. In order to increase cost the quantity of sales will need to be increased, up sell products to existing customers, sell more diverse products, and revise price in order to produce a balance between price and cost. In order to decrease cost overhead needs to be analyzed, buy in bulk and negotiate for cheaper prices, make manufacturing more efficient, and buy equipment instead of leasing. Outsourcing is another great way to cut costs (Philips, 2014).
Nonpricing Strategies
Nonpricing strategies are strategies that can be used to increase barriers to entry. Barriers to entry are “The factors that prohibit firms from entering an industry…” (McConnell, Brue, & Flynn, 2009, p. 202). The best way to identify market barriers to entrants is to review the company’s history at start up and then identify which barriers presented themselves to the business as it grew. Then figure out which barriers are still in place now for new entrants. Tresemme could purchase a patent for its new product making it more difficult for other industries to enter the market.
Next, the company should check its business plan. “Barriers to entry can exist...

Other Essays Like Business Proposal

Business Proposal Essay

5258 words - 22 pages Business Proposal Professional Development II Prepared by: Casey Foo Don Lin Karen Lim Kim Hong Lawrence Lim 1 Executive Summary The airline industry is not young, and if it is not because of budget airlines who revolutionized how the industry works in terms of pricing strategies and marketing, it is honestly quite boring to fly! Since the September 11 attacks, airports around the world, including Australia has stepped up security

Business Proposal Essay

4234 words - 17 pages Business Proposal Objectives: You will apply economic principles presented in Weeks One through Three in this week's assignment. Your assignment will be reviewed by your peers and by your facilitator in week five and should be revised as necessary based on feedback as the first part of the final assignment in week six.    Select a new, realistic good or service for an existing industry.   Write the economic analysis section of a business

Business Proposal

2592 words - 11 pages Business Proposal Thesis Statement: A musical daycare center is profitable venture for it serves as an avenue through which busy working parents can allow their children to listen to music-- as supported by studies, it plays an important role not only in springing up musical inclination but also in cultivating mental functions of a young child – while interacting with other kids and doing other recreational activities. Title: Musical

Business Proposal - 1926 words

1926 words - 8 pages Proposal for Online Business Expansion Titan Towing Company has been growing slow since it has launched its business in 2000. The towing market is competitive as there are already established towing companies within the city. Currently Titan Towing makes the majority of its business with direct calls for vehicle tows or roadside assistance. Titan Towing does not hold any city

business proposal

2023 words - 9 pages  Business Proposal Chris Chenoweth ECO/561 Dr. Ray Wooden May 02, 2016 Introduction This economic analysis will focus SaniTea (Sanity), a high end specialty tea company. SaniTEA operates within the retail and wholesale ready to drink tea industry. The company is a subsidiary of Bozeman Holdings Incorporated. SaniTea headquarters is located in Newark, New Jersey. We operate an online website where customers can

Business Information Systems Proposal

931 words - 4 pages Business Information Systems Proposal Timothy Frost BIS220 August 14, 2012 Rob Fisher Table of Contents Table of Contents 2 Introduction 3-4 Information Systems Overview 5 * Information Systems 5-6

A Business Proposal

1020 words - 5 pages A Business Proposal Introduction Alexandra Palace is owned and controlled by the Haringey Local Authority. Over the years Alexandra Palace has had two devastating fires and as a result, has had to spend a large sum of money to rebuild certain structures. It is a fact that Alexandra Palace is losing a lot of capital each year. The cost

Business Comm Proposal

1559 words - 7 pages experience every morning, I must arrive early enough to beat the rest of the members to the pool, or I risk sitting around waiting for a lane to open up. The issue not having a pool large enough to accommodate all of the members is not only a problem of member satisfaction, but also a financial issue. Fortunately, I have a proposal to build a full sized Olympic pool that can not only guarantee the satisfaction of the current members of Community Health

The Keebler Company Business Proposal

1319 words - 6 pages Keebler Business Proposal Denise Isaac ECO/561 July 2, 2014 Dr. Kochaqryan The Keebler Company was founded in 1853 and is the largest cookie and cracker manufacturer in the United States (Keebler 2014). Keebler has marketed its brands such as E.L. Fudge Cookies, Famous Amos, Fudge Shoppe Cookies, Chips Deluxe, Animals, 100 Calorie Right, and many more (Keebler 2014). This proposal will introduce a new product to Keebler that will increase

Ecn 561 Wk 4 Fgi Business Proposal

1467 words - 6 pages FGI Business Proposal Economics 561 March 18, 2013 Instructor Mostafa Baladi, PhD FGI Business Proposal Thomas Money Service Incorporated is manufacturers and finance building and forestry equipment under a subsidiary Future Growth Incorporated (FGI). After over 60 years of consistent

Business Proposal - 669 words

669 words - 3 pages And what actually appealed to me the most about this game was that you could build houses. But of course started playing the game I did enjoy making a family. Both my brother and my sister played this game, I do have couple of friends that the also the sims and something that I find quite interesting when I talk about the sims is that we all have our own way of enjoying the game. Which is quite contrast to the way that I play the sims. I

Related Papers

Business Proposal Essay 551 Words

551 words - 3 pages website. 4. Individual Assignment: Business Proposal This week, you may choose from two different assignment options. Each option requires you to apply economic principles presented in Weeks One through Three. Your assignment will be reviewed by your peers and by your facilitator. Option 1: New Good or Service Business Proposal • Select a new good or service for an existing business or a business that you want to develop. • Write

Business Proposal Essay 996 Words

996 words - 4 pages Wilbur’s Organic Bacon Company: Business Proposal Wilbur’s Organic Bacon Company (Wilbur’s) has been in the hearts of Southwestern Pennsylvanians since 1978. It is through their demand that Wilbur’s is proposing to expand its market share with one of the largest grocers in the tri-state area. Giant Eagle Inc, mother company of The Market District, has been in business with local farmers for decades to bring area fresh

Business Proposal Essay 1258 Words

1258 words - 6 pages Business Proposal Simran Kaur ECO/561 October 20, 2015 Dr. Jerry King Business Proposal – Part I With the number of overweight and obese children growing over the past decades, the need to support healthy eating in children has never been greater. Poor eating habits, including inadequate intake of vegetables, fruit, and milk, and eating too many high-calorie snacks, play a role in childhood obesity. There are too many unhealthy food

Business Proposal Essay 1568 Words

1568 words - 7 pages Business Proposal Joseph Hunt ECO 561 Feb-24-2014 Warren Mathews Business Proposal In today’s economic society creating and investing time and money into a new business is very risky to say the least. A couple of things to look at are market structure and elasticity of the product or service. In this business plan I have decided to create a business that surrounds a service versus a product, the service that I plan on providing is a