Question
A company has been trying to develop a reputation and perspective of a high quality item. The standard price for one dozen pierogis has been
A company has been trying to develop a reputation and perspective of a high quality item. The standard price for one dozen pierogis has been $5.99 per dozen. This price is a little higher than the prices of the main competitors. Depending upon the ingredients, the competitors prices range from $2.79 to $5.39 per dozen in most grocery stores. While the company has completed no in-depth research or analysis, management believes they offer the highest quality pierogi on the market and believes their price should reflect as much. A breakdown of the cost structure revealed total variable costs of $1.87/dozen and total fixed costs of $0.20/dozen.
Studies have shown that most grocery wholesalers maintain a 30 percent mark-up while the retailer maintains a 25 percent mark-up. Pierogis and More desires to maintain their current price point at the retail level when they enter this new distribution channel. The company would also like to maintain a 45 percent mark-up. Based upon the above information, please respond to the following:
c: In addition to the pricing decisions, Pierogis and More does not have a promotional campaign designed for this new marketing channel. Prepare an appropriate marketing campaign to enter the new market. Be specific in your response. Does brand play a role in this process?
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