Channel Your Inner Marketer Rachel Hi, I'm Rachel, the Product Development Manager for the team. I'm going to help you spec a backpack for the URBAN COMMUTER. There are several issues to keep in mind: > AVERAGE PURCHASE PRICE > PREFERENCES for the segment And your MISSION GOALS: > $1,000 in NET PROFIT and > GROSS MARGIN of 30% or more. Rachel The NET PROFIT is what is left over after all expenses are accounted for, including DISTRIBUTOR, ADVERTISING and PROMOTIONAL costs. The GROSS MARGIN is calculated based on the difference in the total SALES PRICE REVENUE less any DISTRIBUTOR, ADVERTISING or PROMOTIONAL costs. Rachel Click on the BACKPACK tab and select the following for your pack: > SHAPE - ROUNDED TOP > STRAPS - WIDE PADDED > MATERIAL SYNTHETIC > FEATURES - WATER BOTTLE and LAPTOP SLEEVE > COLOR - BLACK Rachel Next, click on the PRICE tab and select a price that gets you a healthy GROSS MARGIN. This price will impact your ability to sell in different channels and of course your NET PROFIT. Notice as you move the pricing slider, the COSTS, MARGINS and available DISTRIBUTOR PROFIT MARGINS change. Rachel Your goal in this challenge is to achieve maximum PROFIT and MARGIN, so be sure your price is aggressive. A well-designed product can demand a price much greater than average. Once you are happy with your price, click on the CONFIRM CHANGES tab to lock it in. Now, Michelle will walk you through developing your retail strategy. Lord Pylor First, click on the CHANNELS tab and view the different options your backpack can be sold through. Click on the SUMMARY tab to review all the channel options. If you have any channel options where you are not making a positive gross profit per bag, you should reconsider your pricing. Click on ACCEPT TERMS to agree with the terms of each channel you want to use to sell your product. There may be some channels where your SALES PRICE is outside the allowed terms and conditions for that channel. You will need to decide if you want to change your price to allow sales in that channel. Inputs have already been made for you on ADVERTISING. Go back to the PRICE tab and check your margins based on any changes you made in the CHANNELS tab. Remember, the MARGIN PER UNIT total shown in the PRICE tab is not equal to the definition of the GROSS MARGIN for your mission goal. The GROSS MARGIN goal of 30% is calculated based on the difference in the total SALES PRICE REVENUE less any DISTRIBUTOR, ADVERTISING or PROMOTIONAL costs. Click FINISH and then END TURN to review your choices. If you are happy, click YES - END TURN to see how you did. If you are not happy with your choices, click NO - REVISE STRATEGY and make any changes to PRICE and/or CHANNELS. After you made your changes, again END TURN and then YES - END TURN to find out how you did. Mchele Channel Your Inner Marketer your price to allow sales in that channel Inputs have already been made for you on ADVERTISING. Go back to the PRICE tab and check your margins based on any changes you made in the CHANNELS tab. Remember, the MARGIN PER UNIT total shown in the PRICE tab is not equal to the definition of the GROSS MARGIN for your mission goal The GROSS MARGIN goal of 30% is calculated based on the difference in the total SALES PRICE REVENUE less any DISTRIBUTOR, ADVERTISING or PROMOTIONAL costs. Michele Click FINISH and then END TURN to review your choices. If you are happy, click YES- END TURN to see how you did. If you are not happy with your choices, click NO-REVISE STRATEGY and make any changes to PRICE and/or CHANNELS After you made your changes, again END TURN and then YES. END TURN to find out how you did. segments backpack competitors channels advertising price hq department direct fashion online outdoor retail university promotions summary Profit per Bag: Fashion Boutique -9.00 Profit per Bag -9.00 Profit per Bag -9.00 High End Outdoor University Store Customer Reach 3,040 Customer Reach 3,614 Customer Reach 3,458 Retail Price: 0.00 Retail Price: 0.00 Retail Price: 0.00 Cut: 54% Cut 27% Cut: 30% Profit per Bag: Profit per Bag -9.00 -9.00 Profit per Bag -9.00 Online Discount Retailer Customer Reach 5,064 Retail Price: 0.00 Cut 39% Profit per Bag