Utility, Elasticity, and Demand

Assignment 2: Utility, Elasticity, and Demand

The ultimate goal of the campaign I created is to introduce a brand new shampoo at the lowest possible price while still earning a marginal profit. As consumers learn about this great new product and discover its true value, the price will increase at very small increments to obtain a larger profit without reducing consumer demand for this product. The total revenue test will show increased profit with the increased price proving that this new product is relatively inelastic.

This marketing plan developed for Garnier®-Fructis® is for a new low-cost shampoo that is made from all natural ingredients with no chemicals. My SWOT analysis determined the strengths to be low cost, brand loyalty, patented, and established modern production facility. The weaknesses are the large number of shampoos already available for purchase and the number of consumers loyal to other brands. The opportunities are adding to a vast product line and introducing an environmental-friendly product to appeal to new markets. The threats are that consumers may not want to try a new product and the competitors such as Suave and Pantene that may develop a similar product. The target market is people of all ages who have hair, especially those who prefer to use environmental friendly products to reduce their carbon footprint.

Since the price needs to set low but profitable, we are able to introduce this new shampoo at a price of $2.99 for a 20-ounce bottle. This is approximately $1.00 less than our other shampoos. We are able to set the price lower because we can already distribute this new shampoo with the other shampoos we make, so there will be no separate distribution costs. Our company already distributes our products to department stores, grocery stores, pharmacy stores, and wholesale clubs.

To advertise this new All-Natural shampoo, we will run one page advertisements in all the women’s and family magazines, introduce a new television...