Financial Management and Economics

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Financial management and economics The ABC Company has recently revealed plans to launch a new product the electronic cigarette. This item is already present and sold within the market, but the demand for it is rather underserved. The competition in the field is quite low as the product is relatively novel and there are not many companies producing it. The organization is currently working on elaborating and implementing a marketing plan to promote and sell its own electronic cigarette. In order to do so, it has to consider several critical aspects. These include the following: Alternative scenarios for costs of production The features of the electronic cigarette The structure of the market Market segments and pricing strategies Developments in demand Currency market scenarios. a) Alternative scenarios for costs of production The table below reveals three scenarios for the production costs to be encountered. Optimistic scenario Realistic scenario Pessimistic scenario Labor costs $ 200,000 $ 300,000 $ 400,000 Raw materials $ 300,000 $ 350,000 $ 400,000 Energy $ 200,000 $ 250,000 $ 300,000 Other costs $100,000 $ 100,000 $ 150,000 Total costs $ 800,000 $ 1,000,000 $ 1,250,000 In 2012, the expectations are for the capitals to appreciate slightly, but in a sustainable manner that would generate successful outcomes in the future. Stability is expected to be created and 2012 is appreciated as a year of increasing efforts to economically
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