Cannibalization, Marketing Management

Assignment Help:
Assume Clinique expects to sell 3 million ounces of BB cream within the first year after introduction but expects that half of those sales will come from buyers who would otherwise purchase Clinique’s moisturizer (that is cannibalized sales). Assume that Clinique normally sells 10 million ounces of moisturizer per year and that the company will incur an increase in fixed costs of $2 million during the first year of production for the BB cream, will the product be profitable for the company? $9 million sales for BB cream first year. The new BB cream will garner a high price for the manufacturer ($10.00 per ounce for the BB cream vs $8.00 per ounce for the moisturizer). It also comes with higher variable cost ($6.00 per ounce for the BB cream vs $3.00 per ounce for the moisturizer cream)

Related Discussions:- Cannibalization

Marketing environment, identify the major trends in the firm''s natural and...

identify the major trends in the firm''s natural and technological environment.

Market segmentation in mobile phone market, Mobile phone majors Nokia, Eric...

Mobile phone majors Nokia, Ericsson and Motorola -along with a couple of aggressive new entrants like Samsung and Panasonic - are gearing up to grab a piece of action in the Indian

Test Marketing, What is test marketing and various approaches followed by F...

What is test marketing and various approaches followed by FMCG companies

Show the economics benefits of outdoor recreation, Question 1: The exte...

Question 1: The extensive use of outdoor recreational attractions based in natural areas has resulted into increased negative environmental and social impacts. Using local e

Manage market research, DEVELOP an appropriate organisational context of t...

DEVELOP an appropriate organisational context of the project

Determine the elements of the marketing mix, Determine the elements of the ...

Determine the elements of the marketing mix Promotion is hence one of the elements of the marketing mix and is responsible for communication of the marketing offer to the targe

Elaborate the term brand in brief, Elaborate the term Brand in brief. ...

Elaborate the term Brand in brief. Brand: Brand is nothing but a method of creating an identity for a product somewhat as Amitabh Bachan whose name suggests a certain ide

Product development, Product Development The sixth step is product dev...

Product Development The sixth step is product development that involves developing the manufacture concept into a physical product to ensure that the product idea may be turne

Product concept, The Product Concept The product concept states that c...

The Product Concept The product concept states that consumers will favour products that offer the best quality, performance, and features, and therefore the organization shoul

Marketing concept, explain the role of the process of marketing in business...

explain the role of the process of marketing in business

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd