How much can schultz expect to pay retailers for promotion

Reference no: EM133267186

Assignment:

In November 2021, Heidi Schultz, product manager for Sudzo, one of the top brands in the Cropper and Gimble stable of laundry detergents, was considering which of two promotion schemes she should use to boost Sudzo's sales (which had fallen somewhat during the Spring quarter). Schultz was considering either a combined cooperative advertising/trade promotion or a promotion to consumers. The trade promotion would let the trade (retailers) purchase Sudzo below its usual (trade) price. In exchange, during December the retailers would have to do an end-aisle display of Sudzo on at least two weekends, and feature Sudzo in the supermarket's advertising flier each Thursday. The cost of this advertising would be shared with Cropper and Gimble.

Consider 7 middle-income households, each of which received a Sudzo coupon, in 7 different metropolitan areas.

Suppose Schultz distributes 1 million coupons to middle-income households. For each redeemed coupon Sudzo must pay the retailer 82 cents -- fifty cents in redemption value plus a 32 cent "handling fee". How much can Schultz expect to pay retailers for this part of her promotion?

Reference no: EM133267186

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