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Consider four price promotion campaigns, where all three periods are of the same duration (3 weeks). The selling price per unit is $5, and the
Consider four price promotion campaigns, where all three periods are of the same duration (3 weeks). The selling price per unit is $5, and the contribution per unit is $3. Week sales sales sales sales (Campaign 1) (Campaign 2) (Campaign 3) (Campaign 4) Baseline 1 969 969 929 1098 2 979 1269 779 1249 3 1349 1139 1039 1229 Promotion 5 1269 2119 1869 2359 6 1539 1639 1679 2379 7 1600 2209 1749 2419 Post 9 1000 600 1078 450 promotion 10 1400 700 1100 700 12 1200 450 1209 250 Based on the information contained in the above table and considering that there is 20% price deduction for the Campaign 2, calculate the net contribution to profit (contribution foregone from baseline sales and contribution from incremental sales) and evaluate whether the price promotion is profitable for the Campaign 2. (8+8+4= 30 marlic)
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