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Business Proposal - Research Paper Example

Profit maximization is another essential aspect of any business setup. To maximize the profit earned by the company, there are strategies which have been set up. To formulate a more successful way to maximize profits, comparing marginal cost and marginal revenue is essential to the decision. This determines the effect of supplying more to the market. If by doing so, the demand rises, then maximization of the profit made by the company relies on the quantity produced. These strategies are aimed at increasing the quantity sold by the company and amount of customers the product is gaining in the market each and every day. This also can be achieved by increasing the marginal revenue and decreasing the marginal cost. This can be achieved ones the company increases its total revenue (money earned through its product sales) and reducing the cost revenue (money that is used to produce the products the company sells in the market). Reduction of the cost revenue in the company is the basic in ensuring profit maximization. This is done by adding overtimes in the production level rather than employing added labor into the company. This saves time since the workforce is experienced unlike the new task force which will need time to learn the production process. By maintaining quality standards of its product the company can increase chances of monopolizing the market hence increasing chances of earning higher total revenue and in return have a greater chance of maximizing its profit in the market. Without

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this information, decisions concerning maximization of profit can be entirely relied on the consumers taste. If they consider a particular brand over the other, the company may opt to produce more of the brand to the other to reduce production cost hence maximize its profit (Burrow & Bosiljevac 2012). Mixing of prices and non-pricing strategies depends on the kind of consumers targeted by the company in the market. If pricing is taken into consideration by the company there are two things the company might expect from the market it serves. The first one being; customers consider buying its products over the competitors’ due to its lower prices or customers consider buying the product’s substitutes due to their high prices. Though the product will sell much in the first scenario, to maximize its profits may be a challenge. This is because the marginal revenue will be less hence making little profit. For the companies that consider the nonpricing strategy of competition; their prices are determined by the uniqueness of the products it offers in the market. If the products are considered to be a necessity by the consumer, then the consumer will not hesisitate to purchase the product at all costs. In the case of Ramtons Company, consideration of pricing in the market is essential due to the competitors who offer similar products in the market. On the other hand it tries to make its products unique in order to gain a high segment of target customers in the market. This has given room to the introduction of a nonpricing strategy in the market since the customers always term the products to be up to standards and always deliver to their satisfaction (Hillestad, Berkowitz & Hillestad 2004). Differentiating a product from other products offered by competitors is a virtual that


Business Proposal Name: Institution: The introduction of the new flavor yogurt by ramptons milk industries has made the company to position the product in the market. The product was developed to meet the high demand of yogurt in the market. Revenue maximization being one of the goals for any given company, ramton’s company has made a broad step to increase revenue…
Business Proposal
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