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

Frederick herzberg''s dual factor, Explain the relationship between Frederi...

Explain the relationship between Frederick Herzberg's dual (two) factor motivation theory and job enrichment. Hygiene factors contain pay, status, working conditions, rules and

Sales force management in rural marketing, Sales force management : as a ge...

Sales force management : as a general rule, rural marketing involves more intensive personal selling effort compared to urban marketing. Rural marketing calls for some specific

Personal selling, difference between the personal selling and salesmanship?...

difference between the personal selling and salesmanship?

Black-scholes-merton, Black-Scholes-Merton This section illustrates the...

Black-Scholes-Merton This section illustrates the Black-Scholes (BS) model [BS73] and the pricing form under it by using a European call option that based on the assumption of

Increase in level of competition and readership by ads, Q. Increase in leve...

Q. Increase in level of competition and Readership by ads? Increase in level of competition:- The level of competition has enhanced manifold. For any product numerous brands

Conic section, The straight line y=x+3 cuts the circle x^2+y^2-6x-4y-3=0 at...

The straight line y=x+3 cuts the circle x^2+y^2-6x-4y-3=0 at points P and Q, where Q lies in the first quadrant. Calculate the coordinates of P and Q. Then, state the coordinates

Advertising, what is advertising according to an experts

what is advertising according to an experts

Why is customer satisfaction so significant, Why is customer satisfaction s...

Why is customer satisfaction so significant? Effective marketing focuses on two activities that are retaining existing customers and adding new customers. Although customer sat

Describe what are reference groups, Question: (a) You are the marketi...

Question: (a) You are the marketing vice-president of a large soft drink company. Your company's agency is in the process of negotiating a contract to employ a superstar fema

What are the certain limitations of packaging, What are the certain limitat...

What are the certain limitations of packaging? Packaging is one of the way by which Marketer can distinguish his product by the competitors brand. In spite of having different

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