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

What are suppliers firms and resellers in microenvironment, What are Suppli...

What are Suppliers Firms and Resellers in the Microenvironment of a company? Suppliers: Suppliers Firms and individuals which provide the resources required by the company

Caselet, considering the concept of product life cycle, where would you put...

considering the concept of product life cycle, where would you put video games in their life cycle?

Marketing environment, Marketing Environment In order to properly iden...

Marketing Environment In order to properly identify opportunities and monitor threats, the company ought to begin with a thoroughgoing understanding of the marketing environme

Iibm instititute of business management, 1.Considering the concept of produ...

1.Considering the concept of product life cycle, where would you put video games in their life cycle?

Describe the key characteristics of consumer motivation, Question 1: Co...

Question 1: Consumers must constantly make decisions regarding what products or services to buy and where to buy them. Because the outcomes of such decisions are often uncertai

#title, Companies are forced to follow sales orientation because the result...

Companies are forced to follow sales orientation because the results are measured in short term and incentives are based on short term achievements. This leads to a high level of r

What are main assets of brand equity, What are main assets of brand equity?...

What are main assets of brand equity? The main assets of brand equity are as given below: a. Brand Awareness: It refers to the strength of a brands presence within the min

Ten principles of reinvention , As per the Osborne and Gaebler, governments...

As per the Osborne and Gaebler, governments don't work well, since they are tall, sluggish, over-centralized, and preoccupied with diverse rules and regulations."We developed publi

What points are really matters while doing marketing, What points are reall...

What points are really matters while doing marketing? Whether online or offline, there are only two objects that important: “Buying and Selling”. Fundamentally to simplify, thi

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