BU362 Lecture Notes - Lecture 3: Telemarketing, Fixed Cost, Chain Store
Document Summary
Class 3: financial analysis for marketing decisions part ii. Vc = sh. 85/bottle: 7,000k bottles/yr, strat 1: heavy advertising to sell at a higher p. ad cost k p=. 00, strat 2: lower advertising, lower p. ad cost = k p = . 25, breakeven unit: Fc = k: strat 1: k + k + sh. 85n = n 500k = . 15n 232,558. 14 = n. you need to sell. 232,559: strat 2: k + k + 0. 85n = . 25n k = . 4n 142,857. 14 = n. you need to sell. 142,857 units: what"s the (cid:373)a(cid:396)ket sha(cid:396)e of each alt, be units/tl units = % market, a: 232,558/7,000,000 = 3. 3, b: 142,857/7,000,000 = 2, st, st(cid:396)ategy 2 is (cid:271)ette(cid:396) (cid:271)e(cid:272)ause it"s easie(cid:396) to (cid:271)(cid:396)eak e(cid:448)e(cid:374) Lt, strategy 1 is better because it helps establish brand image and lets consumers get used to a premium price. Marketing insights from break-even analysis: hea(cid:448)y ad(cid:448)e(cid:396)tisi(cid:374)g sig(cid:374)ifi(cid:272)a(cid:374)tly i(cid:374)flue(cid:374)(cid:272)es (cid:272)o(cid:374)su(cid:373)e(cid:396)s" pe(cid:396)(cid:272)eptio(cid:374) of (cid:395)uality, the interaction of 4ps.
