Will it make a Profit?
The aim of this coursework is to produce a report investigating the possibility of making a profit for my companies’ product. The aim of this coursework is to produce a product that will be successful and make a profit. The company I work for will have therefore have the product manufactured by another company and then sold to the company I work for.
The business I work for will have to pay fixed and variable costs. I will be using primary and secondary sources to research the costs involved in running my business for my business expenditure. I will have to plan the cost of e. g. electricity, gas and rent. Also I will be working out how much profit I will be making these entire things will help me make my word report. The finance department will be selling products to another business after buying it from the manufactures. I could sell my product at two different prices, I have researched my product and results show that high street shops are selling my product which is a Sony Playstion portable, for around i?? 100. 00 to i?? 214. 00. After analysing my product I have come to a decision to sell my product between this range.
I will be analysing the break even point, I will be looking at issues such as how many products my company will have to sell, and at what price they will be selling the product to make a profit. Task 2 What research will you need to do? I will need to research what costs I will be undertaking. Costs such as electricity, gas, rent and the price of my product. Electricity, gas and rent, altogether cost about i?? 1,000. However this varies in different times of the year as in the summer heating won’t be used as much as it would be used in the winter.
Why do you need to do this? The reason I need to research is to find information about the different types of expenditure so I don’t get a shock when the bills come through and so I am more accurate with my predictions. It would also enable me to set budget targets for myself spending. I will need to analyse issues such as the break even point, so I know exactly at which point the amount I spend is equal to the amount of income I get coming in, even though I won’t be making a profit. How will you do it?
I will be getting my research by checking the price of products from different product websites the price of the actual shop will be investigated on rightmove. co. uk. I will investigate the cost of bills by asking shops that are similar to my business. I will make a questionnaire and hand them out to shop owners so I can find out more about how much it will cost to run my business. I will also investigate the cost of bills by looking on websites such as London electricity, telewest, British gas and more.
Primary research: Primary research is research which I will find myself. Questionnaires interviews are examples of primary research. This type of research tends to be unbiased as it is done by yourself. Secondary research: Secondary research is research in which data is actually collected what already exist. This could be research carried out by other people. This contrasts with secondary research that draws information from books or publications or expert opinion.
Secondary research is research where data is found from an existing source, having been collected for a different purpose, perhaps even by a different organisation, and which might be useful in solving a current problem. Show evidence of research you have done: Task 3 Fixed cost: A cost that remains constant no matter how many or how few goods or services you manufacture and sell. Variable cost: A cost that changes with the production quantity or the performance of services. This contrasts with fixed costs that do not change with production quantity or services performed. Pricing strategies:
Optional product pricing: Companies will attempt to increase the amount customer spend once they start to buy. Optional ‘extras’ increase the overall price of the product or service. For example airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other. Captive Product Pricing: Where products have complements; companies will charge a premium price where the consumer is captured. For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only design of blades which fit the razor.