MANAGEMENT ACCOUNTING

Management Accounting

Management Accounting

Introduction

This report will cover business plan of a new start up business. In this business, two identical complementary products will be sold. The two identical products are tooth brush and tooth paste. The primary reason behind the selection of these two identical products is that the demand of both the products is not expected to decline. The product is related to the cleanliness of humans and it is a fact that the mankind is becoming more sophisticated with the passage of time. Therefore, the need of this product is already high in the market. It is little different than the other products because in today's world, the cleanliness of the tooth is very important for all human beings. There will be no seasonal effect on the sales because people use to eat in very season and they are supposed to clean their tooth in every season. This is also a favourable point for the business. The general price of the good in the London is £ 0.45 for one tooth brush and £ 7.95 for one tooth paste of an 8 (oz). This price level of the both the products provide enough room to enter into the market with lower cost. The quality of the product will remain up to standards Twenga (2012). The company will follow low cost strategy for entering into the market. There are already number of players exist in the market so the best way to enter into the market is to offer the product at relatively lower price.

Discussion

Business Strategy

As mentioned before the product will be introduced into the market on the basis of lower cost. The price of the tooth brush offer by this company will be £ 0.40 for each piece. The toothpaste will be sold in a packet consisting of four tooth brush. Therefore the price of the each packet will be £ 1.60 and the price of the tooth paste will be £6.95. The above mentioned prices are less than the price of the products offered by competitors. The tooth paste will be introduced in the product as Gum disease and advance quality. This will provide impetus to demand because of the price difference. The customers usually prefer to use toothpaste which ultra helpful in keeping their teeth and jaws unharmed (Abrams & Kleiner, 2003, pp 55). The company will adopt a strategy to highlight the benefits of toothpaste. The marketing team of the company will be assigned with the task to fix the product in customer mind as a product which not only clean teethes but also prevent the teeth from germs. It is a fact that the health standards of the people are developing. The focus on the prevention of germs will attract the customers more (Pinson, 2005, pp 45). The core values of the business will be focus on reducing cost and employee's empowerment. The company will keep focusing on the cost. The employees will be trained for helping management in reducing ...