Posted by SA on .
I'd like someone to check explain me the following questions related to the text and how to find them out
The following text :
The ARC company produces and sells cosmetics for women and girls. The company is owned by a brother and sitser who originally wanted to earn more money than they could in their old jobs. Although profitable sales have been falling recently. This is causing many stakeholder groups to worry about the future of the business. However the owners are keen for the business to continue and become more successful. sales are falling due to new compettion in the market with exiting new products. So ARC must cut production costs to survive. The company has brought new manufactoring equipment which is much more specailised. As a result fewre workers are neede but this has caused workers to become unhappy with the now boring jobs they have to do. Some workers have now left and this has caused a problem in meeting production targets with ARC being unable to supply some of the retailers who sell their products.
The marketing director is keen to increase the value added of the cosmetics. One product - the Bella prefume - currently sells for $7. It is made from soap bought in by the business at a cost of $2 per item. The director beleives that b y desgining a new luxary packaging for the product added value could be increased.
1- How do the businesses objectives appear to have changed ?
2- Assume the marketing director bought in new packaging at an additional cost of $1 for each item sold. She increases the selling price by 20%. Calculate the new value added of this product.
3- Evaluate one alternative method that the marketing director could use to increase the value added of this product
I've written my answers and I'd like someone to check if they are right as soon as possible
Anwer 1 :
The businesses objectives appear to have changed as the profit has decreased because the company was very keen at the start. But the competiton between products has led the sales to decrease as not many people might buy from the ARC company. The ARC has changed as they have to cut of costs. this is because they need to survive as the economy has moved into recession , and the business is more concerned with survival than anything else even though the profil will be lower.
Answer 2 - The added value will be $11
Answer 3 - The director can offer a gift 0 wrapping service for the perfume so this added feature will add more costs to the compmany but a much bigger added value
Are my anwers right , should i include anymore or is it fine