December 15, 2014
Little Rock, AR is well known for having some of the best barbeque in the south. In fact, Little Rock has won several awards for its amazingly delicious barbeque dishes. The product that I have chosen to develop is a homemade barbeque sauce, CeCe’s Famous BBQ Sauce, which brings a little piece of the south to everyone’s home.
Examination of Elasticity of Demand and Market Structure
Cece’s Famous BBQ Sauce is a homemade traditional sauce carefully made with the freshest ingredients. Southerners take great pride in barbequing and there is a current debate as to who has the best BBQ sauce. There ...view middle of the document...
Marketing this product will play a huge role in its success. It will be the difference between selling BBQ sauce and selling the brand Cece’s Famous BBQ sauce, which is my goal. By using aggressive marketing techniques, product differentiation along with brand recognition, the business will stand out among its competitors.
Understanding the role of Price equilibrium helps maximize revenue in any business. A smart business owner will often compare his or her prices to competitor’s prices with the main objective being to create an increase in demand while keeping supply constant. Maximizing profits is a short-term approach using the marginal-revenue-marginal –cost approach (Brue, Flynn, & McConnell, 2009, p. 182). This measures how increasing output contributes to revenue.
Cece’s Famous BBQ sauce company’s intentions are to operate where Marginal Revenue (MR) is higher than Marginal Cost (MC) which will translate into greater revenues and reduced costs per unit. In order to calculate this, we must know our fixed and variable costs and total revenue for a specific period of time.
Determining Profit Maximizing Quantity
When the marginal profit becomes negative, this is the point where Profit maximizing quantity is determined. Production costs are one of the biggest determinants of pricing and performance. By using the Marginal revenue-marginal cost perspective, a strategy based on the fact that it’s total profit reaches its maximum point where margin revenue equals marginal profit; I will determine how to generate the largest...