Profitability_ClassActivity

Profitability_ClassActivity - Group Number_Date Group...

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Group Number: _____________________________________Date:_____________ Group Members Present: 1. _____________________________________________________________ 2. _____________________________________________________________ 3. _____________________________________________________________ 4. _____________________________________________________________ 5. _____________________________________________________________ 6. _____________________________________________________________ Marketing Problem: A brand is choosing between two sales promotions, a coupon and a buy one get one free (BOGO) offer. If the brand distributes coupons for 25% off the regular price (25 OFF), it can increase its base unit sales by 30%. The brand plans to drop 100,000 coupons which require a $4,000 investment for printing and distribution. Historical sales show that the coupon redemption rate for a 25 OFF coupon is 5%. A BOGO offer triples the brand’s base unit sales (excluding the free items) but requires $6,000 for display allowances. Both promotions will run for a month. On months without sales promotion, the brand sells an average of 10,000 units. Its regular price is $5.00 and its cost of production is $2.00. Which sales promotion should the brand use, and why? If the only options were the 25 OFF coupon and BOGO, should the brand have sales promotions at all? Explain why.
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Group Number: _____________________________________Date:_____________ Group Members Present: 1. _____________________________________________________________ 2. _____________________________________________________________ 3. _____________________________________________________________ 4. _____________________________________________________________ 5. _____________________________________________________________ 6. _____________________________________________________________ Marketing Problem:
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