Business, 12.12.2019 03:31, naocarolina6

As the pricing analyst for value supreme, you are asked to analyze a proposal to price whole-frying-chickens low in order to attract shoppers to value supreme stores. the current price for whole fryers is $2.29 per pound. the proposal is to set a promotional price of $1.99 per pound. the wholesale cost of the fryers, prepackaged and ready for sale, is $1.95 per pound.

by tracking past changes in sales of chicken with changes in sales of other grocery products, you discover that each one pound change in the sales of whole-frying-chickens is associated with the following changes in the sales of other products:

product dollar change % contribution margin
vegetables .154 50%
packaged goods .692 20%
frozen foods .114 33%
other meat -.250 40%
a) if this past relationship between sales of whole-frying-chickens and increased sales of other goods continues to hold, how much must sales increase to make this promotion profitable?

b) how might you structure the promotion to increase the likelihood that additional chicken sales will in fact result in a corresponding high level of sales for other products?

c) can value supreme profitably promote whole-frying-chickens at $1.89 per pound?

Answers: 2

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As the pricing analyst for value supreme, you are asked to analyze a proposal to price whole-frying-...