3. What are the consumption-adjusted margins, both for Heinz and for retailers, of the items currently offered? Consider both regular and promotional prices. (Consumption-adjusted margins are dollar margins that reflect the fact that different package sizes of the same product may influence the rate at which customers consume the product. A natural question that arises from this phenomenon is how product managers should adjust their understanding of product profitability to reflect this possibility. Here is one simple way: Suppose a manufacturer makes $0.20 on a 10-oz. can of soup and $0.40 on a 20-oz. can of soup. In either case, the manufacturer makes $0.02 per ounce. But in this case, the larger size causes consumers to increase their consumption of soup by 30%, so the consumption-adjusted margins per ounce of the 20-oz. size can be calculated as ($0.40x1.3) : 20 = $0.026, where the term in parentheses adjusts the dollar margin up to reflect the consumption expansion, and then that adjusted margin is divided by the number of ounces in the package size. This per-ounce margin is now directly comparable to the per-ounce margin of the 10-oz. size: $0.02. ( In this case, Heinz is making more money on the larger package size.)