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

Properties of triangle, properties of triangles. in the following problem...

properties of triangles. in the following problem, In a triangle ABC,if r1 is the exradius of the excircle opposite to A,r2 is the exradius of the excircle opposite to B and r3i

Explain management the different types of exchange rate risk, QUESTION ...

QUESTION You have been appointed as the treasurer of Robin International, an electronic firm with many subsidiaries abroad. The management of Robin International do not have an

Affected factors of strategies human resource investment, How many factors ...

How many factors are affected of strategies human resource investment decision? There are numerous factors which considered of strategies human resource investment decision. Su

Factors affecting media planning, Factors affecting media Planning:- (1...

Factors affecting media Planning:- (1) Nature of Product: Product to be advertised is able to be industrial/technical product or consumer product: Industrial/Technical produc

What is the significance of distribution channel, What is the significance ...

What is the significance of distribution channel? In order to know the marketing channel, this is important to know the reasons for emergence of distribution channels. The main

Mesh router, However, the survivability requirement (C7) may not be met eve...

However, the survivability requirement (C7) may not be met even though all the traffic demands are satisfied. A mesh router that does not meet (C7) has to perform the augmentation

Explain diffrent types of advertisement copy, Q. Explain diffrent types of ...

Q. Explain diffrent types of advertisement copy? Types of advertisement copy: - Advertisement Copy perhaps of various types based on Appeal, functions, Purpose and Media of a

Describe the phases in the evolution of retail market, Question 1 Descr...

Question 1 Describe the phases in the evolution of retail market 2 What are the tasks handled by a project manager to effectively manage a project 3 What are the relevant

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