Profit maximisation is assumed to be the objective of a firm, however there are other objectives that firms have, these include: revenue maximisation and sales maximisation. A firm aiming to maximise profit will aim to operate at output level Q, where Marginal Revenue (MR) is equal to Marginal Cost (MC). A process that companies undergo to determine the best output and price levels in order to maximize its return. The company will usually adjust influential factors such as production costs, sale prices, and output levels as a way of reaching its profit goal. There are two main profit maximization methods used, and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method.
When a consumer is purchasing a product they want to make sure they obtain maximum value for the money they spend and obtain a product that they perceive is greater than any other product in the market. Consumers look for something that sets a product apart from the rest wether that is providing a product at a lower price or by providing a higher quality product, ultimately a consumer will purchase the product with the greater perceived competitive advantage. Bunning’s warehouse is a company that gains its competitive advantage over the competition by offering the consumers products at lower prices than their competitors. Bunnings makes the promise of low prices through their slogan “Lowest prices are just the beginning.” The company does not just make an empty promise on providing the lowest prices but is able to back it up by saying “If you happen to find a cheaper price on a stocked item we will beat it by 10%.” (Bunnings Warehouse, Year Unknown) By creating and delivering the promise of lowest prices, Bunnings is able to position itself in the customers mind as providing superior value and as such has been able to gain majority share hold of the market through differentiating themselves from the competing companies through a competitive advantage. (Armstrong, Adam, Denize and Kotler, 2012) It is made clear through the example of
The Retail Positioning Strategy of Nordstrom's Every business in the world aspires to relentlessly win and have more customers depending on its product quality and services awareness. As in accordance to Nordstrom of Nordstrom's business, “How people define customer service is where the battle will always be won and lost” (Spector & McCarthy, 2012). This means that Nordstrom's has always strived towards achievement because of strategic measures that are directed at the customers together with the market as a whole. One of the strategic measures that Nordstrom's has advanced unlike other retailers is its focus on the goals. According to Spector & McCarthy, 2012), Nordstrom's has an enormous financial position proportioned to be around $1.3 billion in cash, 11 straight quarters for making sales, and its apparent positioning in the Apparel’s top 50 companies ranked by profit margins.
Costco Wholesale Corporation Part II Costco Wholesale Corporation is an extremely competitive industry. The following writing will discuss the financial health, technological advantages, globalization, and conducting benchmarking analysis in comparison to Wal-Mart and Target Corporation. To manage financial statements efficiently is by means of income statement, balance sheet, and cash flow. The technology has advance and made developments through the year, technological advantage in Costco Company is helping the progress for success. Globalization is the key to survival that allow to a company to be competitive and offer diverse services and convenience to consumers.
For these reasons, it is necessary to analyze the competitive advantage of the different options presented. • Strengths and Opportunities: The project evaluation should consider a SWOT analysis of each potential application, which allows identifying the strengths, opportunities, threats and weaknesses. This way, it is possible to choose the best option, which maximized the firm’s strengths and opportunities, while mitigating its threats and weaknesses. • Barrier to Entry: Also it is necessary to analyze the cost of enter to the industry. • Economic Benefit: What will be the earnings associated to the project.. • Customer Preferences Bernstein should recommend to the board the
For the last 39 years this strategy has allowed them to be successful. Whole Foods Market is the world’s leading retailer of natural and organic foods, with 193 stores in 31 states and Canada and the United Kingdom. In Austin,
• A differentiator gains a competitive advantage because it has the ability to satisfy customers’ needs in a way that its competitors cannot, which allows it to charge a premium price for its product. • Premium prices → increased revenue → superior profitability • A differentiator invests its resources to gain a competitive advantage from superior innovation, excellent quality, and responsiveness to customer needs • A product’s appeal to customers’ psychological desires is a source of differentiation. ▫ Example? 13 Differentiation • Generally, a differentiator chooses to divide its market into many segments and offer different products in each segment • A differentiated company concentrates on developing distinctive competencies in the functions that provide competitive advantage ▫ These are still expensive! • A differentiator must control its cost structure to ensure the price of its products does not exceed the price customers are willing to pay for them • When differentiation stems from the design or physical features of the product, differentiators are at great risk of being imitated ▫ Example?
With regard to selling products at bargain prices, BBQfun could raise its market volume because the lower price would be an incentive to encourage customers’ purchasing. Concerning about the first marketing opportunity (selling product at bargain prices), the product quality could affect the implementation of this opportunity or even rule out it. It is - Cutting cost of products lowers the product quality: this situation could happen if BBQfun only focuses on cutting cost of products and lacks attention to product quality. In order to make this marketing opportunity feasible, BBQfun needs to lower cost of products but ensures the product
This will allow different parts of the world to enjoy merchandise that is specific to one country. Throughout the past it has been proven that by introducing industries’ and the use of globalization has strengthened a country’s economy. I am a pro economic globalization because I feel that we need to change the way of the past if nothing seems raise the economic standards. Hopefully we will be able to realize that economic globalization is working so we can help countries quickly and efficiently. Economic globalization has attracted much debate throughout society today.
Goal: The goal is to figure out which sales promotion will be a win-win for all parties involved in the process. This includes the company, manufacturer, wholesaler, and the consumers. Company: Giant Consumer Products (GCP) People- Allan Capps: CEO, Byron Flatt: VP of Sales, Mary Davidson: FFD General Manager, and Mike Sanchez: Director of Marketing -A main concern for GCP is to preserve brand equity and not hurt the overall image by discounting. Current issues within GCP: 1) They need to increase revenue in order to meet Wall Street’s projections or it can seriously hurt the division’s standing within the company. 2) They need to increase demand of their product without hurting long term goals Factors to Consider: 1) 2.8% increase in growth rate between 2003 and 2007 (has slowed down since) 2) Customers view sales promotions as a very positive thing and keeps the product on their minds 3) 50% of consumers’ money spent on food is at restaurants (expected to decrease because of current hurting economy) 4) Current trend of healthier eating and focusing on the ingredients 5) Different types of family dynamics…family eating, childless families, etc.