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

Major factors influencing buying behaviour, Major factors influencing buyin...

Major factors influencing buying behaviour: A consumer's buying behaviour is influenced by cultural, social, personal, and the psychological factors. Cultural factors exert

Determine the number of decision-makers, Determine the Number of decision-m...

Determine the Number of decision-makers In consumer markets a single person very often makes decision. In organisational markets decisions are made by many people within buy

Differentiate between horizontal and vertical conflicts, Question: (a) ...

Question: (a) Members of the marketing channel perform eight key functions. Describe these functions. (b) Differentiate between horizontal conflicts and vertical conflict

Describe influences on consumer behaviour, Question 1: (a) What are th...

Question 1: (a) What are the different stages in consumer buying decision? (b) Explain the difference between routine and complex buying decision using appropriate exampl

Explain the term - promotion, Explain the term - Promotion Promotion re...

Explain the term - Promotion Promotion refers to process of informing and persuading the consumers to buy certain product. By using this process, marketers convey persuasive me

Product policy, Explain product policy in relation to agriculture

Explain product policy in relation to agriculture

Segmentation, With aid of an example of a manufacturer, define segmentation...

With aid of an example of a manufacturer, define segmentation?

Production of advertisement, Q. Production of advertisement? Design as ...

Q. Production of advertisement? Design as well as production of advertisement involves a number of activities among them are writing copies Developing illustrations developing

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