MM-5 - product 1 What brand development strategy is Mars...

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Concepts of Marketing Name: JOMC 475 MM-5 Marketing by the Numbers – Chapter7 Mars, Maker of the famous M&Ms candy brand, recently introduced M&M Premiums. The new candies include flavors such as mint chocolate, mocha, chocolate almond, and raspberry-almond with white chocolate. They are wrapped in iridescent colors and sold in reclosable cartons. Although the new M&M Premiums garner a higher whole-sale price for the company ($0.48 per ounce for the new product versus $0.30 per ounce for the original product), they also come with higher variable costs ($0.35 per ounce for the new product vs. $0.15 per ounce for the original
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Unformatted text preview: product. 1. What brand development strategy is Mars undertaking with M&M premiums? 2. Assume the company expected to sell 300 million ounces of M&M Premiums within the first year after introduction but expected half of those sales will come from buyers who would normally purchase M&M regular candies (that is, cannibalized sales). Assuming that the sales of regular M&M candies are normally 1 billion ounces per year and that the company will incur an increase in fixed costs of $5 million during the first year of production for M&M Premiums, will the new product be profitable for the company?...
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This note was uploaded on 01/18/2012 for the course JOMC 475 taught by Professor Heidihennink-kaminski during the Spring '11 term at UNC.

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