may31,2011pooldoctor

may31,2011pooldoctor - May 31, 2011 ProblemStatement Main...

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May 31, 2011
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Problem Statement Main Issue: How to advertise for the upcoming season and what products and services to offer in order to achieve maximum profits and long term success Sub Issues: Only 3 weeks until meeting with bank manager and decision needs to be made about the current chemical supplier
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Supplier Decision Factors to consider: current poor reputation, increased margins and opportunity for increased business. Margins: Currently: chemicals sold at $543 retail, and were purchased for around $350-margin is $193 (36% as stated in text). Proposed: Under Capo, cost would be $244, therefore margin would be $299 per customer (55%) Overall-if you had 80 customers-the incremental gain would be $ 8 480 Other factors: Potential loss of referral business (1989 17% or 11 ppl) , Pool Doctor will lose invitation to pool show and joint mailings (19 ppl of 30%), Pool Doctor will need to store and finance inventory, and will lose advantage of local tech support.
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Swimming Lessons Interest appears to be limited, but some existing clients have expressed interest Would increase revenues and does fit with the business, would also be value added Risks include the hiring of an employee and the increased liability-cost of insurance could be prohibitive
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Ozonator Units Potential gain of $200 for each unit sold 34% of customers expressed an interest Many unanswered questions about the quality of the units, costs of servicing, technical support, and liability Potential for loss of contribution due to reduced need for chlorine Contribution: Pool Doctor pays $167 for chlorine-consumer value is $260 (167 * 1.55) By selling unit would lose out on 93$ (260-167)-BUT selling a unit, they would gain 200$
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This note was uploaded on 06/08/2011 for the course ECON 1006 taught by Professor Pow during the Fall '11 term at CUNY Baruch.

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may31,2011pooldoctor - May 31, 2011 ProblemStatement Main...

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