Business Proposal
ECO/561
February 5, 2015
Gary Wiessner
Business Proposal
This assignment focuses on introduction of a new product in the existent line of business and explains the method for development of goods for generating more revenue. The concepts of elasticity of demands, market structures in addition to profit maxi maximizing techniques are also discussed which are helpful for the good and also to counter the barriers of its entry. The other important topics that will be mentioned are the pricing strategy and differentiation of products. The company I have chosen is shampoo company Pantene, which was instituted in 1947, on basis of inspiration of the ingredient panthenol, the company Pantene in the start was owned by a Swiss drug company Hoffman-LaRoche. It debuted as the premier hair care product series in Europe; it came in glass bottle packing, with special fragrances and then was sent across the continent to US. Pantene recently launched the latest Custom Hair solutions, the product which I will focus on.
Elasticity of Demand
The demand for Pantene shampoo is extremely elastic mainly because these days a number of products are present in the market and the companies keep introducing their new shampoo brands regularly.
Market Structure
For the shampoo market, the market structure resembles a Monopolistic Competition. This is seen when a number of companies are producing products or services that in the consumer’s perception has differences from the competition but in reality have much similarity. The reason why the products are perceived as different is the consequence of product differentiation, which plays the main role in success in a monopolistic industry. The difference in products is on the basis of pricing, quality, images, or any additional features, which vary from product to product.
Increasing Revenue/Profit Maximizing Quantity
Annually Pantene has sales ranging nearly $3 billion and the number of...