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 $4 per thousand for artwork and distribution. Each coupon redeemed will cost an additional $0.03 in processing fees.

Instead of coupons, Paul announces he will pay retailers a promotional allowance to reduce retail prices for one week. If retailers reduce prices by 10%, Paul will pay them $0.10 per bag sold at the reduced prices. What percentage promotional pass-through does this represent?

coupcost = $0.43 tcost = $4,000 rprice = $2.60