Explore BrainMass


This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

I need assistance writing a business proposal. I have to select a new and realistic good or service for an existing industry. I need to write the economic analysis section of a business proposal. This will include statements about the market structure and the elasticity of demand for the good or service, based on text book principles. I need to create hypothetical data, based on similar real world products to estimate fixed and variable costs.

Discuss the following:
Identify market structure
Identify elasticity of the product

Include rationale for the following questions:
How will pricing relate to elasticity of your product?
How will changes in the quantity supplied as a result of your pricing decisions affect marginal cost and marginal revenue?
Besides your pricing decisions, what are your suggested non-pricing strategies? What non-pricing strategies will you use to increase barriers to entry?
How could changes in your business operations alter the mix of fixed and variable costs in line with your strategy?

Please see the attached file for a business proposal checklist.

© BrainMass Inc. brainmass.com October 17, 2018, 12:46 pm ad1c9bdddf


Solution Preview

Step 1
The new product we will introduce will be laundry detergent single packs called Shine. These packs will have a powerful detergent, fabric softener, colour safe bleach, strain remover, and brightener. In addition, each pack will be in the form of a leaf and a book of 25, 50, and 100 leaves will be sold. Each leaf will have exotic aromas. The customer can select among chamomile blossoms, saffron, cinnamon, and vanilla oil. The combination of functions and exotic smells will make leafs unique and different from any other similar product in the market.

Step 2
The market is that of household detergent. The market structure is monopolistic competition. In this form of market structure there are many producers and that sell products that are differentiated from one another and hence are not perfect substitutes. The detergents in the market are differentiated from one another by branding and quality and so are not perfect substitutes. The market in which household detergent is sold has real or perceived non-price differences. The differences however are not so great as to eliminate other goods as substitutes. The detergents in the market are close but imperfect substitutes. The detergents perform the same basic function of cleaning clothes but have differences because some include fabric softener, bleach, fabric refresher, strain remover, brightener, and fragrance.

Step 3
There is a positive cross price elasticity of demand between Shine and other detergents. it is estimated that cross price elasticity of demand between Shine and Tide Pods is +0.81, the cross price elasticity between Shine and Gain is +0.32, and the cross price elasticity between Shine and Method is +0.24. Shine also has high income elasticity.

Step 4
Pricing will relate to the elasticity of my product. The most pertinent elasticity in case of Shine is the cross elasticity of demand. The cross elasticity of demand measures the responsiveness of the demand for a good. it is measured as the percent change in demand for the first good that occurs in response to a percent change in price of the second good (Andrés Vázquez, 1998). Since, the market structure of the detergent market is monopolistic competition; each product in the market is a substitute for but not perfect substitute for other products. For example, Cheer TrueFit is a substitute for ...

Solution Summary

The answer to this problem explains a business proposal. The references related to the answer are also included.

Similar Posting

International Security Assistance (ISAF)

I have just been assigned to a multinational headquarters operating under an international security assistance force (ISAF) in Afghanistan. I need to prepare a discussion paper for the for the Regional Commander, answering the two questions with recommendation and justification (4 pages). Include references

1. After 2014, will NATO continue in AFG or is it more likely to shift to a 'Coalition of the willing' and why?

2. What multinational C2 relationship would best suit your chosen scenario and why?

ISAF was created in accordance with the Bonn Conference in December 2001. Afghan opposition leaders attending the conference began the process of reconstructing their country by setting up a new government structure, namely the Afghan Transitional Authority. The concept of an UN-mandated international force to assist the newly established Afghan Transitional Authority was also launched at this occasion to create a secure environment in and around Kabul and support the reconstruction of Afghanistan.

These agreements paved the way for the creation of a three-way partnership between the Af-ghan Transitional Authority, the United Nations Assistance Mission in Afghanistan (UNAMA), and ISAF.

On 11 August 2003, NATO assumed leadership of the ISAF operation, ending the six-month national rotations. The Alliance became responsible for the command, coordination and planning of the force, including the provision of a force commander and headquarters on the ground in Afghanistan.

In October 2003, the United Nations extended ISAF's mandate to cover the whole of Af-ghanistan (UNSCR 1510), paving the way for an expansion of the mission across the country.

View Full Posting Details