BUSINESS PLAN

Identical Complementary Products



Identical Complementary Products

Introduction

The report is prepared to cover a business plan for setting up a new business. This report will focus on a business that will undertake operations of manufacturing two products which are totally identical complementary to each other. The complementary products can be defined as two products which are interrelated with each other in a positive way. Let's suppose the products are product A and product B. If the customers are purchasing product A then the customers will also need to purchase product B because without the product B there will be no use of purchasing product A. this business plan is prepared to sell Tooth brush and tooth paste. It is a fact that the product tooth brush is strongly interrelated with the second product “tooth paste”. If customers are purchasing tooth brush, they will definitely require tooth paste to use the tooth brush and there is no other way to use the tooth brush. Therefore, the demand of product A (toothbrush) will ensure the demand of product B (tooth paste). The nature of the products is encouraging in term of demand level. The products “toothbrush” and “tooth paste” are related to cleanliness of teeth and mankind is supposed to clean their teeth throughout the year. The products are related to health and the population of world and specifically of the London is getting more close to health standards and concerns. This product is not new to the public. The second reason of choosing these two complementary products is that there will be seasonal impact on the demand. The customer used to purchase the tooth brush and tooth paste in every season so the seasonal impact (negative) has no chances to exist. The market research was conducted in the area of London. The research showed that the price of the tooth brush is £ 0.45 (each piece of tooth brush) in market. On the other hand, the price of the tooth paste which is prevailing in London market is £ 7.95 weighing of 8 (oz) tubes each (Amazon, 2012).

Selling Tactics

The target selling price is crucial to the business because there are number of competitors in the field so the room of charging higher price to customers does not actually exist. Therefore, the company will adopt strategy of low cost for entering into the market. The company will be selling tooth brush at price of £ 0.43 for each piece while the price of the tooth paste will be £ 7.00 weighing of 8 (oz) tubes each. These prices are less than the prices of the relative products selling in the market. The competitors of the tooth brush are not those sellers who are selling an ordinary product but those which are selling the tooth paste with the tag of preventing germs and jaws diseases (Hiduke, & Ryan, 2013, pp 25).



Cost Statement

The cost statement for toothbrush is given below:

Unit Cost Statement

Particulars

Product A

Tooth Brush Amount in £

Variable Rental Expense per ...