Long-Term Investment Decisions

Good Essays
1.) Outline a plan that managers in the low-calorie microwaveable food company could follow when selecting pricing strategies for making their products as inelastic as possible. Provide a rationale for your response.

As costs to produce frozen meals rises, such as an increase in the prices of ingredients, packaging, and shipping, the company may be forced to raise its prices to cover these extra costs. One thing a manager wants to do when deciding on a pricing strategy is to minimize the change in elasticity, and keep their product inelastic. Increased advertising is one way a company can lessen the potential drop in demand as a result of the price increase.
Once the frozen meal has reached maximum profitability, and has been on the market for a period of time, it is now in its mature stage. When manufacturing costs increase, the company must have a plan to maintain its sales despite the price increase. McGuigan, Moyer, and Harris state “This growth comes from focusing on product differentiation and commitment to building the brand” (McGuigan, 2014, P. 525). Advertising is a key factor to let consumers know about added values and product updates. In addition, brand-name advertising differentiates the product from the competition, and persuades the consumer to buy this product and not a substitute.
2.) Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company.

The government has enacted numerous policies and regulations that effect a firm’s production and employment. Government policies impact a company’s production processes to ensure product safety as well as workplace safety. These regulations, which are to protect consumers and employees, are monitored by several different government agencies. The production processes in the frozen food
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