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

State about the audience-centred activity, State about the audience-centred...

State about the audience-centred activity Some of these interpretations fail to draw out key issue which marketing communications provides added value through enhanced product

Show the marketing implications, Problem 1: Assume that you are the man...

Problem 1: Assume that you are the manager of front-line customer-service employees in a tourism/hospitality organisation. From this perspective, elaborate on the strategies t

Markets, Markets The concepts of relationships and exchange lead to th...

Markets The concepts of relationships and exchange lead to the concept of a market. A market is the set of real and potential purchaser of a product. 1). originally a "mark

Analysis of the business environment, Any lady outfit looks great if it is ...

Any lady outfit looks great if it is designed with style and fits well. To take that outfit up a notch just adds accessories such as, amongst others, jewellery, handbags, scarves a

Write on structural and institutional change, Question 1: "There have b...

Question 1: "There have been evident signs that the public sector needs to be reformed as the socio-economic context in which Mauritius is faring has changed." Discuss the pres

Introduction to marketing management, Marketing management: Meaning an...

Marketing management: Meaning and definition: marketing management is a compound word "marketing plus management'. Marketing is the total system of the business activities wh

Test management, explain the various approach that are followed by SMCG com...

explain the various approach that are followed by SMCG companies in test marketing

Explain the concept of dominant coalitions, (a) Find the main external forc...

(a) Find the main external forces triggering the need for organizational change. Pick three and discuss how they might necessitate behavioral change on the part of organization's e

Main advantages of keeping an in-house is function, Identify FIVE main adva...

Identify FIVE main advantages of keeping an in-house IS function.   There are several significant advantages of maintaining an in-house IS function, five are listed below. H

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