Case #2 - Canlife Active Canlife Active carries a full line of men's and women's athletic clothing sold exclusively through their website. You are the marketing manager for CanLife Active and it is your job to set prices for 6 items in their clothing line. Table 1 shows the company guidelines for pricing and discounts based on each item's position in the Product Life Cycle. Complete Table 1 using conversion formulas on the previous page. Table 1 Introduction Growth Maturity Decline Operating Expenses (% of COGS) 80% 60% 35% % Markup (M) 200% 150% % Gross Profit Margin 52% 40% (GPM) % Rate of Markdown 15% 30% 50% 70% (Discount) 40% Complete the pricing table below for each of the following items in their inventory. Women's Women's Men's Men's Table 2 Base Yoga Fitted Yoga Wicking Men's Pants Shorts Shirt Layer T-Shirt Bottoms Product Life Intro Intro Cycle (PLC) Growth Maturity Maturity Operating Expenses (OE) Operating Profit (OP) Unisex Hoodie Decline Markup (M) Cost of Goods Sold (COGS) Selling Price (SP) $30.00 $18.00 $18.00 $27.00 $21.00 $39.00 1 Markdown (MD) Reduced Selling Price (RSP) Break Even Price (BE) 3 Design Layout References Mailings Review View Hel MKT3330 Winter 2022 Pricing Strategies for Women's Yoga Shorts 1. Identify where in the PLC women's yoga shorts are. 2. What pricing strategies have been proven useful at the PLC? Cost of Goods Sold Operating pees Operating Profit Absolute Los Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for women's yoga shorts on the graph above. What type of profit or loss will they have? 4. Calculate the reduced operating profit they will realize at this reduced price. 5. Calculate a minimum selling price that will allow them to make a full operating (net] profit even with the 15% discount 2. What price strategy is being used? Why? b. What will the new markup be? + What will the new martup percentage Mes) and press prot margin (PM) be? 6 Calculate a minimum selling price that will result in an operating profit of me less than $10 after a 15% discount What pricing strategy is being used? What are the constrains and objectives for the strategy English (United States) Accessibility: Investigate to search e a MXT2330 Winter 2002 Pricing Strategies for Men's Pants 1. Identify where in the PLC men's pants are. 2. What pricing strategies have been proven useful at this PLC? Cost of Goods Sold Operating Expenses Operating Profit Absolute Loss Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for men's parts on the graph above. What type of profit or loss will they have? 4. What price strategy is being used? What is the objective of the strategy? 5. Calculate a minimum selling price that will allow them to break even with the 50% discount 6 Calculate a selling price that will give them 20 of the operating peafit with the 50% discount. 7. What discount rate on a regularly priced shorts can the company offer to achieve a gross profit margin of 104? 8. With the bundle pricing strategy Saouts Active wishes to sell two items at one price. If the company wants to determine the bundle price for pants and T shirts combined what price would you sugest? a) in a 20% off sale to be above the BE price? b) that will give them full operating profit on the Tshirts and they break even on the pants? c) that will pve them a 5 reduction in profile on the T-shirts and cover the coas on the pants? d) that will result in no more than a 25% reduction in profit? What would the gross profit margin beat this bundled price 8C MXT2330 Winter 2022 Pricing Strategies for Unisex Hoodies 1. Identify where in the product life cycle unisex hoodies are 2. What pricing strategies have been proven useful at this product life cycle? Cost of Goods Sold Operating Expenses Operating Profit Absolute Loss Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for unisex hoodie on the graph above. What type of profit or loss will they have? 4. What range for the selling prices can the company set to incur only an operational loss in a 70% off sale? 5. During the decline stage, there may be opportunities for some companies to continue selling their products at a profit, if they are able to reduce their costs. By looking at alternative manufacturing options, Galite Active may be able to extend the profitable life of the unisex hoodies. If the store does not sell anything at a markup lower than 25 during the sale, what is the maximum price that it can pay for a nice hoodie? tigate . 11 2 hp Case #2 - Canlife Active Canlife Active carries a full line of men's and women's athletic clothing sold exclusively through their website. You are the marketing manager for CanLife Active and it is your job to set prices for 6 items in their clothing line. Table 1 shows the company guidelines for pricing and discounts based on each item's position in the Product Life Cycle. Complete Table 1 using conversion formulas on the previous page. Table 1 Introduction Growth Maturity Decline Operating Expenses (% of COGS) 80% 60% 35% % Markup (M) 200% 150% % Gross Profit Margin 52% 40% (GPM) % Rate of Markdown 15% 30% 50% 70% (Discount) 40% Complete the pricing table below for each of the following items in their inventory. Women's Women's Men's Men's Table 2 Base Yoga Fitted Yoga Wicking Men's Pants Shorts Shirt Layer T-Shirt Bottoms Product Life Intro Intro Cycle (PLC) Growth Maturity Maturity Operating Expenses (OE) Operating Profit (OP) Unisex Hoodie Decline Markup (M) Cost of Goods Sold (COGS) Selling Price (SP) $30.00 $18.00 $18.00 $27.00 $21.00 $39.00 1 Markdown (MD) Reduced Selling Price (RSP) Break Even Price (BE) 3 Design Layout References Mailings Review View Hel MKT3330 Winter 2022 Pricing Strategies for Women's Yoga Shorts 1. Identify where in the PLC women's yoga shorts are. 2. What pricing strategies have been proven useful at the PLC? Cost of Goods Sold Operating pees Operating Profit Absolute Los Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for women's yoga shorts on the graph above. What type of profit or loss will they have? 4. Calculate the reduced operating profit they will realize at this reduced price. 5. Calculate a minimum selling price that will allow them to make a full operating (net] profit even with the 15% discount 2. What price strategy is being used? Why? b. What will the new markup be? + What will the new martup percentage Mes) and press prot margin (PM) be? 6 Calculate a minimum selling price that will result in an operating profit of me less than $10 after a 15% discount What pricing strategy is being used? What are the constrains and objectives for the strategy English (United States) Accessibility: Investigate to search e a MXT2330 Winter 2002 Pricing Strategies for Men's Pants 1. Identify where in the PLC men's pants are. 2. What pricing strategies have been proven useful at this PLC? Cost of Goods Sold Operating Expenses Operating Profit Absolute Loss Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for men's parts on the graph above. What type of profit or loss will they have? 4. What price strategy is being used? What is the objective of the strategy? 5. Calculate a minimum selling price that will allow them to break even with the 50% discount 6 Calculate a selling price that will give them 20 of the operating peafit with the 50% discount. 7. What discount rate on a regularly priced shorts can the company offer to achieve a gross profit margin of 104? 8. With the bundle pricing strategy Saouts Active wishes to sell two items at one price. If the company wants to determine the bundle price for pants and T shirts combined what price would you sugest? a) in a 20% off sale to be above the BE price? b) that will give them full operating profit on the Tshirts and they break even on the pants? c) that will pve them a 5 reduction in profile on the T-shirts and cover the coas on the pants? d) that will result in no more than a 25% reduction in profit? What would the gross profit margin beat this bundled price 8C MXT2330 Winter 2022 Pricing Strategies for Unisex Hoodies 1. Identify where in the product life cycle unisex hoodies are 2. What pricing strategies have been proven useful at this product life cycle? Cost of Goods Sold Operating Expenses Operating Profit Absolute Loss Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for unisex hoodie on the graph above. What type of profit or loss will they have? 4. What range for the selling prices can the company set to incur only an operational loss in a 70% off sale? 5. During the decline stage, there may be opportunities for some companies to continue selling their products at a profit, if they are able to reduce their costs. By looking at alternative manufacturing options, Galite Active may be able to extend the profitable life of the unisex hoodies. If the store does not sell anything at a markup lower than 25 during the sale, what is the maximum price that it can pay for a nice hoodie? tigate . 11 2 hp