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Silk production is one of Vietnams most famous industries and silk production in Vietnam can be traced back to 2000 BC. Vietnam silk is produced
Silk production is one of Vietnams most famous industries and silk production in Vietnam can be traced back to 2000 BC. Vietnam silk is produced in vibrant colours and exotic designs and, with increased tourist travel to the area, is an increasingly popular fabric in global fashion markets. Anh Nguyan has started a business importing Vietnamese silk scarves to the UK and has spotted an opportunity to launch her brand in high street accessories stores, department stores and through her own website. Anh Nguyan intends to sell the Vietnamese silk scarves to consumers at the retail price of 25 although some believe this is quite expensive for a Vietnamese silk scarf, which retails in Vietnam at a low price. Ann Nguyan argues that the scarves she is importing are not readily available in the UK market, are of the highest quality and are unusual, even in Vietnam, in their use of highly coloured traditional designs. Consumer perceptions so far seem to be that the product is unique and of high value. Required: Anh Nguyan proposes to set the retail price at 25 each for the silk scarves. Discuss the steps she should take to reach her final pricing decision. Imagine the company has fixed costs of 4.6 million, and that each silk scarf has a variable cost of 10 and a retail price of 25. How many Vietnamese Silks scarves does Anh have to sell to realise a target return of 500,000
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