View the step-by-step solution to:

Marilyn Lysohir, an internationally celebrated ceramic artist, started Cowgirl Chocolates to provide some funding support for a yearly published arts...

Marilyn Lysohir, an internationally celebrated ceramic artist, started Cowgirl Chocolates to provide some funding support for a yearly published arts magazine, High Ground, that she and her husband, Ross Coates, started in 1995. Her love of chocolates and hot and spicy foods spurred the idea of making hot and spicy chocolates to be sold in creative, artistic tins and packaging, which she labeled Cowgirl Chocolates. Her small business, begun in 1997, had won a number of awards in fiery food competitions. While Cowgirl Chocolates had grown steadily over its four years in business, it still had only generated $30,000 in sales revenue in 2000, which was not enough to cover expenses. Marilyn had drained much of her personal savings to keep Cowgirl Chocolates in business. Her cash accounting methods and record keeping were not very sophisticated although she seemed to have a good sense of her costs in production and raw materials and the packaging. However, Marilyn had taken a shotgun approach to most of her marketing efforts and had tried a number of activities to increase product demand. She allowed herself to make one risky financial move each year in her pursuit of profitability and increased sales. She had just made her one risky move for year 2001: She had taken out a full-page ad in Chile Pepper magazine for $3,000.
Questions
1. What are four (4) options that Cowgirl Chocolates may consider as far as pricing? What would you recommend?






EXHIBIT 2 Cowgirl Chocolate Product Offerings with Price and Cost Figures
Approximate Total Cost of Cost of
Percentage Suggested Item Chocolate Product
of Total Retail Wholesale Cost or Sauce Packaging2
Item Revenues Price! Price" (a + b) (a) (b)
Spicy Chocolate Truffle 50% $2.99 $1.50 $1.16 $1.04 $0.12
Bars (available in 2 flavors:
orange-espresso or lime
tequila crunch)
1/4 pound Muslin Bag 16% $6.95 $3.50 $2.35 $1.69 $0.66
(13 truffles in a drawstring
muslin bag-available in
3 flavors: assorted hot,
lime-tequila, and
mild-mannered)
1/2 pound Tin (assorted 12% $14.95 $7.50 $4.783 $3.25 $1.53
hot & spicy truffles in a
collectable tin)
Hot Caramel Dessert 10% $5.95 $3.50 $2.50 $2.00 $0.50
Sauce (9.5 oz. Jar)
Sampler Bag (4 assorted 7% $2.95 $1.50 $0.97 $0.52 $0.45
hot truffles in a small
drawstring muslin bag)
1/4 pound Gift Box -1% $8.95 $4.50 $2.95 $1.69 $1.26
(assorted hot truffles or
mild-mannered truffles in a
fancy gift box with gift card)
1 pound Gift Box -1% $24.95 $12.95 $9.05 $6.37 $2.68
(assorted hot truffles or
mild-mannered truffles in a
fancy gift box with gift card)
Gift Bucket (tin bucket -1% $39.95 $20.95 $1l.02 $5.77 $5.25
containing 1/4 pound gift
box, 2 truffle bars and 1 jar
of caramel sauce)
Gift Basket (made of wire -1% $59.95 $30.95 $23.06 $15.293 $7.77
and branches and
containing 1/2 pound tin,
2 truffle bars, 1 jar of
caramel sauce and a T-shirt)
Nothing Fancy (one pound -1% $19.50 NA $7.42 $6.37 $l.05
assorted hot truffles or
mild-mannered truffles in a
plastic bag)
I Approximately 1/3 of sales were retail over the Cowgirl Chocolate website, the remaining 2/3 of sales were to wholesale accounts (i.e., to other retailers).
2Packaging cost includes costs of container (bags, tins, or boxes), labels, and individual truffle wrapping. Packaging cost assumes Marilyn packs the items and does not
include the packing & labeling fee charged by Seattle Chocolates if they do the packing ($1.00 per 112 pound tin or 1 pound box; $0.75 per 114 pound box; $0.25 per
1/4 pound bag; $0.20 per sampler bag).
'Ihis cost includes the cost of the 'l-shirt.


Sign up to view the entire interaction

Top Answer

We can only answer your free 3 questions one at a time. You have two options to get your questions answered:... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online