Keebler Business Proposal
Denise Isaac
ECO/561
July 2, 2014
Dr. Kochaqryan

The Keebler Company was founded in 1853 and is the largest cookie and cracker manufacturer in the United States (Keebler 2014). Keebler has marketed its brands such as E.L. Fudge Cookies, Famous Amos, Fudge Shoppe Cookies, Chips Deluxe, Animals, 100 Calorie Right, and many more (Keebler 2014). This proposal will introduce a new product to Keebler that will increase revenue, maximize performance levels.
The market structure of Keebler is monopolistic competition which is an industry contains many competing firms which have slightly different products (McConnell, Brue, and Flynn 2009). Monopolistic competition firms can behave like monopolies including using market power to generate profit, but in the long run there competitors enter the market and the benefits of differentiation decrease with competition. Consumers benefit from the variety but production costs could be achieved if all the firms sold identical products (McConnell, Brue, and Flynn 2009). Keebler’s consumer’s demand of products is elastic, consumers can purchase similar products at a lower rate, but usually consumers prefer brand names.
The goal of Keebler is to maximize total earnings (gross revenue - total operating cost). Given the state of the economy, Keebler could look to make a statement in the market by decreasing their prices to encourage consumers to buy while the economic conditions are less than ideal. Targeting certain demographics within the market will assist Keebler in finding the most appropriate strategy to deal with the current economic conditions in different areas. Marketing will play a significant role in years to come. Methods such as advertising on television, radio, Internet, newspapers, and magazines would be one form of marketing. Finally, attached chart represents variable cost, marginal cost,