VECCMs (vitamin enhanced chocolate coated marshmallows) failed to gain distribution in most health food stores, but Paul was determined to pursue his dream of marketing a good-tasting snack food that would include minimum daily requirements of most vitamins and minerals. He sold them in 16oz resealable bags through independent grocery stores throughout the Mid-Atlantic. Paul's Selling prices to wholesalers of $1.09 a bag resulted in a contribution margin before advertising and promotion of 35%. Wholesalers sold to retailers and retailers to consumers, earning margins of 16% and 50% respectively. Sales are currently 1,000 bags per week.

Paul is considering distributing 1 million free-standing insert (FSI) coupons for $0.20 off the regular price and expects to pay $5 per thousand for artwork and distribution. Each coupon redeemed will cost an additional $0.02 in processing fees. What percentage lift would be required for RETAILERS to breakeven on the promotional allowance program where when retailers reduce prices by 10%, Paul will pay them $0.10 per bag sold at the reduced prices?

.. I can't get enough of these VECCMS!!! Yum!