Question

1. What are the four possible ways for a seller to raise profits for the products or service that he or she is selling?

2. How could a seller raise profits for the M&M chocolate?

Answer 1

• There are lots of ways of raising the profits for the product or service by the seller. the various possible ways are by increasing sales or by reducing the cost of production.
• 1) Increasing the sales.- sales revenue can be increased by various possible ways there are by improving the efficiency of the employees by providing them with better training, teaching them the salesman skills, also by conducting reviews and rating of staff and encouraging their performance.
• Another way can be by improving the marketing strategy, i.e. by conducting market research and finding the new markets for the product that seller is selling and also to determine the demand pattern and at the same time to find out the price elasticity of demand that will help the seller to check the effect of price change on quantity demanded. If the increase in price does not affect the demand this will help the seller in gaining profits.
• Other ways of improving sales techniques will be by providing discounts that attract the interest of buyers into the product you are selling. Profits can also be enhanced by providing an effective display of your product promotions.
• These days selling is not limited to buying and selling only. Consumer satisfaction is important equally,  therefore better customer service is an essence of more sales. If the company provides better after-sales service, it will help in improving the company image in customer minds and it will help the seller in getting a loyal customer for the product.
• another way of getting more profit is by widening the gap between total revenue and total cost. therefore it is very important for the seller to research in all the areas of production and reducing the costs by the following methods. One of the very important factors for reducing the variable cost of production by searching the right supplier and having better negotiation price which will help to reduce the per-unit cost of production.that means seller should always research about the new sources of raw materials from where he will be able to find out raw inputs at lower cost. Besides, the seller also has to improve his technology of production by innovation. he should adopt that technology which will help him to produce the goods at a lower cost. Hence, adopting better technology is very important to enhance sales.
• 2) in order to raise the profit for M&M chocolate, the producer must adopt the following strategies.
• a) improving the sales promotion techniques by providing better advertisements and by providing the goods at attractive discounts for example: if a seller provide the same 5$ chocolate with 20% extra increase in quantity it will attract the more chocolate lovers.
• b) by changing the product quality- we know that with the continuous consumption of a particular good, there is the tendency of reduced marginal utility, therefore, the chocolate seller always have to work on product quality by providing better flavours and adding new flavours will definitely induce the chocolate lovers towards trying the new flavour. This will definitely help in improving the sales and further, profits of M&M chocolate.
• c) these days people are more concerned about health issues. That's why chocolate will lead to an increase in the obesity of the consumer which lead them to reduce consumption. Therefore in order to induce the consumption of the chocolate. the seller must focus on the health effects of chocolates on consumer health by trying methods to reduce the sugar quantity in the chocolate, by proving message regarding the benefits of dark chocolate through advertisements, also adding nuts will help also help to improve the health benefits. As such, the seller must also focus on this aspect of making chocolates healthy. this will help him to induce sales and profits.
• d) improving marketing techniques also help the seller in accelerating his profits by watching the marketing techniques of the competitors and the benefits of those techniques to them. This will help the seller to improve his own marketing strategy and help him to get more and more customers.