New Business Proposal Research Paper Example | Topics and Well Written Essays - 1250 words

New Business Proposal - Research Paper ExampleThe assumes of the customer are vital because they help in making changes for the product such that it conforms to their needs (Stark, 2011). Providing a product that suits customers needs in terms of size, price and other characteristics will recruit revenue enhancement generation due to increased sales (Stark, 2011). The revenue will increase by creating a new product line extension. This process entails bundling the new product with the existing products by using a similar brand name.Apart from improving the name of the brand, the process will act as criteria for marketing the new product (Stark, 2011). As the product gains customers, it is possible to perform an analysis of the market in terms of demand and elasticity. This determines how customers will respond to any changes in price. If demand appears to be inelastic, it will be convenient to increase the prices of the commodity in order to generate sufficient revenue. When de mand is inelastic, the amount of sales remains unaltered, meaning that a slight increase in price will result in high revenue (Stark, 2011).Determination of the profit-maximizing amount of money requires understanding of basic concepts of summarize revenue and total cost (Stark, 2011). After performing the sales of the new product, there will be a need to determine the gain at each sales level. This computation sh every last(predicate) involve a consideration of all be including labor plus other variable costs. It is possible to determine the profit maximizing quantity by first computing the bare(a) profits after the sale and finding where the marginal revenue becomes identical to the marginal cost (Stark, 2011).In this case, the formula marginal profit= marginal revenue marginal cost, will apply. If the marginal revenue is higher than marginal cost, it means that there will be a marginal gain (Taylor & Weerapana, 2012). In order to maximize profits, the business shall ensure r eduction of marginal costs and improvements in