PricingProbFall09 - Pricing and Marketing Economics...

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Pricing and Marketing Economics Problems BUSI 107, Fall 2009 1. You are the marketing manager for GreatHair shampoo, a new product that will be sold through beauty salons. Consumer testing had indicated that revenue will likely be maximized at a retail price of around $11.00 per 12-oz. bottle. You must calculate what the selling price for your firm (the manufacturer of GreatHair) will be. Also, you must justify your proposed advertising and promotional budget for the regional test market. Your supervisor has asked that you look at three possible scenarios, so you will need to calculate the break-even unit sales of GreatHair at three possible advertising and promotional budget levels: $900,000, $1,250,000 and $1,500,000. You have the following facts at your disposal: GreatHair will compete in a mature market that is 45,000,000 units in size. Considering competitive factors, it expects to achieve an initial market share of around 7%. A bottle of GreatHair is tentatively scheduled to retail for $11.00. Variable manufacturing costs are $2.75 per unit, with miscellaneous production
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This note was uploaded on 04/04/2012 for the course BUSINESS 107 taught by Professor Grewal during the Spring '09 term at uot.

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PricingProbFall09 - Pricing and Marketing Economics...

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