Question
A consultant points out that even selective distribution needs national promotion. If Black has to increase advertising and spend a total of $100,000 on mass
A consultant points out that even selective distribution needs national promotion. If Black has to increase advertising and spend a total of $100,000 on mass selling to be able to recruit the retailers he wants for selective distribution, would selective or intensive distribution be more profitable?
With intensive distribution, how large a share (percent) of the retailers' total unit sales would Hydropump have to capture to sell enough pumps to earn $200,000 profit?
Hydropump's marketing manager thinks that the type of channel relationship possible with selective distribution would make it possible to get a large share (40 percent) of the pumps sold by its hot-tub dealers. But he realizes that the actual percent might vary. He thinks that the percent could be as low as 35 percent, or go as high as 45 percent. He wants to evaluate the effect that this might have on expected profits. Do a What If analysis, based on the selective distribution alternative, varying Hydropump's percent of dealer unit sales between 35 percent and 45 percent and displaying Hydropump's unit sales and profit, and then complete the missing numbers in the table below.
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