Problem 2. International Marketing Exam 1 C (18 points) You are the international marketing analyst for an US firm exporting fresh strawberries. You are requested to provide sales and revenue estimates for 2022 given some important changes in your export markets, Currently (2021) your company is selling annually 5,000 containers of fresh strawberries to Mexico and 3,000 to Canada. Your price/container is US $10,000 in each market.. b. You get important new information about your markets for 2022 that you need to incorporate in your projected sales and revenues: 1) Mexican per capita income is expected to increase by 4% with respect to 2021 and 2) The exchange rate between Canadian S and US S is expected to go from 1.00 (CanadianS/USS) to 0.90 (Canadian S/USS) in 2022 (that is a 10% decline). Assume no other changes are expected and that your price in US $ will not be changed. (Because of NAFTA/USMCA, no tariffs are paid for US strawberries in those countries). You know by your previous research that fresh strawberries demand elasticities in your markets are as follows: Fresh Strawberries Demand Elasticities Canada Mexico Own price elasticity -1.5 - 1.0 Income elasticity 2.0 1.8 Hint: Use elasticities definitions to calculate changes in sales. You may not need all the elasticities provided a) What is the currently expected annual total revenue by country (2021)? (three points) b) What are the projected sales (QUANTITY) by country in 2022? (using the new information). (SEVEN points) c) What would be the total strawberry sales value (USS) for both countries in 2022? (two points) Problem 1 (18 points) Suppose you are the marketing analyst for Albertsons in Texas. You are requested to estimate th effect on weekly gross revenues of a promotion involving a retail price cut of 25% in Butterball whole turkeys. Currently 12,000 turkeys are sold per week at an average price of $24.00 per turkey. You found out that turkey demand has an own price elasticity of -2.00 Your supervisor waiting for your analysis. a. What is the current weekly total revenue (before the price change) from whole turkeys? 3 points b. What is the projected increased (quantity) in turkeys sold? (after the price cut) Hint: use the definition of own price elasticity! 5 points c. What is the projected weekly total revenue (after price change)? 4 points. d. What would you recommend? 2 points e. If cross price elasticity between turkey and chicken is + 0.30 and weekly sales of chicken are 30,000 pounds. What would be the impact of the new turkey price on weekly quantity sales chicken (quantity of chicken pounds sold) (4 points) Hint; use the concept of cross-price elasticity). Problem 2. International Marketing Exam 1 C (18 points) You are the international marketing analyst for an US firm exporting fresh strawberries. You are requested to provide sales and revenue estimates for 2022 given some important changes in your export markets, Currently (2021) your company is selling annually 5,000 containers of fresh strawberries to Mexico and 3,000 to Canada. Your price/container is US $10,000 in each market.. b. You get important new information about your markets for 2022 that you need to incorporate in your projected sales and revenues: 1) Mexican per capita income is expected to increase by 4% with respect to 2021 and 2) The exchange rate between Canadian S and US S is expected to go from 1.00 (CanadianS/USS) to 0.90 (Canadian S/USS) in 2022 (that is a 10% decline). Assume no other changes are expected and that your price in US $ will not be changed. (Because of NAFTA/USMCA, no tariffs are paid for US strawberries in those countries). You know by your previous research that fresh strawberries demand elasticities in your markets are as follows: Fresh Strawberries Demand Elasticities Canada Mexico Own price elasticity -1.5 - 1.0 Income elasticity 2.0 1.8 Hint: Use elasticities definitions to calculate changes in sales. You may not need all the elasticities provided a) What is the currently expected annual total revenue by country (2021)? (three points) b) What are the projected sales (QUANTITY) by country in 2022? (using the new information). (SEVEN points) c) What would be the total strawberry sales value (USS) for both countries in 2022? (two points) Problem 1 (18 points) Suppose you are the marketing analyst for Albertsons in Texas. You are requested to estimate th effect on weekly gross revenues of a promotion involving a retail price cut of 25% in Butterball whole turkeys. Currently 12,000 turkeys are sold per week at an average price of $24.00 per turkey. You found out that turkey demand has an own price elasticity of -2.00 Your supervisor waiting for your analysis. a. What is the current weekly total revenue (before the price change) from whole turkeys? 3 points b. What is the projected increased (quantity) in turkeys sold? (after the price cut) Hint: use the definition of own price elasticity! 5 points c. What is the projected weekly total revenue (after price change)? 4 points. d. What would you recommend? 2 points e. If cross price elasticity between turkey and chicken is + 0.30 and weekly sales of chicken are 30,000 pounds. What would be the impact of the new turkey price on weekly quantity sales chicken (quantity of chicken pounds sold) (4 points) Hint; use the concept of cross-price elasticity)
