Good Example Of Essay On Forecasting Assignment

Gluten-free bakery can enlarge the product line and devise new advertising strategies for higher price bread products. The company introducing drinks and beverages can execute this cross-selling strategy. Adding a richer variety of coffee, juices, tea, and chocolate would help in expanding the menu selection. The introduction of other items will entice customers to buy other bread products with a higher profit margin. The strategy will increase the sales realized by the bakery. In addition, it will result in high priced products selling more, absorbing the increase in the cost of the glutton free flours. However, the capacity to expand the product line may affect this strategy. Moreover, customers may prefer the additional products such as coffee from other companies specialized in coffee production to gluten-free bakery.
Moreover, the bakery can reduce other variable costs in order to cover up the increase in the glutton free flours. The processes involved in the baking of bread should be analyzed, and unnecessary operations removed. Costs associated with the production will decrease. The When the variable costs reduce the contribution will increase hence covering up the increase in the glutton free flours. In addition, this strategy will not increase the current price of the product. However, it may be hard to cut off some operations. In addition, the decrease in variable costs may not absorb all the incremental costs. Consequently, the company can utilize its capacity by increasing the production of bread. This would result in more revenue that will increase the contribution margin. The increased contribution margin would help the bakery absorb the fixed costs resulting to increased profit.
Furthermore, they should increase the price while focusing on product quality and customer experience. Gluten-free bakery has established itself as a leader in the production of bread in Nanaimo. They have customers who are loyal to their products. Moreover, their products are well positioned in the marketplace. Obviously, this demonstrates that the market is inelastic, and customers appear not overly sensitive to open price changes. The open price increase would not badly affect the sales. The open price increase will increase the contribution thereby absorbing the fixed costs. However, implementation of this strategy goes hand in hand with new marketing strategies that promote the products as quality. In addition, this strategy would not do well in a market that focuses on low priced products. Although this strategy is difficult to execute, it could do well considering the reputation of gluten-free bakery and loyalty of its customers.
Ultimately, the bakery can make low visibility price changes. The bakery can execute this by removing discounts and loyalty schemes that may be present in the company. In addition, the bakery can intelligently decrease the quantity of flour per bread or pastry, without letting the customers know. The strategies will decrease the variable costs thus increasing the contribution margin. The increased contribution would help in covering up the increased cost of the flours used by the bakery. In addition, they do not affect the actual price of bread in the market. The changes in price will only be notable to few customers. However, this may affect the sales. Discounts and loyalty schemes may be a major reason for the customer loyalty. In addition, this could damage the reputation and brand of the company. The efforts of lowering the costs by reducing the quantity of bread may make the customers opt for other bakery breads.