{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

MM-8 - 1 A consumer purchases a flat iron to straighten her...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Concepts of Marketing Name: JOMC 475 MM-8 Marketing by the Numbers – Chapter 10 One external factor manufacturers must consider when setting prices is reseller margins. Manufacturers do not have the final say concerning the price to consumers—retailers do. So, manufacturers must start with their suggested retail prices and work back, subtracting out the markups required by resellers that sell the product to consumers. Once that is considered, manufacturers know at what price to sell their products to resellers, and they can determine what volume they must sell to breakeven at that price and cost combination. To answer the following questions, refer to Appendix 3, Marketing by the Numbers.
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 1. A consumer purchases a flat iron to straighten her hair for $150 from a salon at which she gets her hair cut. If the salon’s markup is 40 percent and the wholesaler’s markup is 15 percent, both based on their selling prices, for what price does the manufacturer sell the product to the wholesaler? 2. If the unit variable costs for each flat iron are $40 and the manufacturer has fixed costs totaling $200,000, how many flat irons must this manufacturer sell to break even? How many must it sell to realize a profit of $800,000? Fixed cost Breakeven volume = ———————— Price – Variable Cost...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern