A distribution channel for the sale of imported Italian leather shoes includes a manufacturer, a distributor and a retailer. The retailer sells the shoes to his consumers for $127 a pair, earning a margin of 20%. The distributor buys the product directly from the manufacturer for $78. The manufacturer realizes a 59% margin when selling to the distributor. If the retailer must maintain a margin of at least 12% on every pair of shoes sold and believes the retail customer won't pay more than the current retail price, what is the most the retailer would be .willing to pay the distributor for shoes?
A distribution channel for the sale of imported Italian leather shoes includes a manufacturer, a distributor and a retailer. The retailer sells the shoes to his consumers for $127 a pair, earning a margin of 20%. The distributor buys the product directly from the manufacturer for $78. The manufacturer realizes a 59% margin when selling to the distributor. If the retailer must maintain a margin of at least 12% on every pair of shoes sold and believes the retail customer won't pay more than the current retail price, what is the most the retailer would be .willing to pay the distributor for shoes?
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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A distribution channel for the sale of imported Italian leather shoes includes a manufacturer, a distributor and a retailer. The retailer sells the shoes to his consumers for $127 a pair, earning a margin of 20%. The distributor buys the product directly from the manufacturer for $78. The manufacturer realizes a 59% margin when selling to the distributor.
If the retailer must maintain a margin of at least 12% on every pair of shoes sold and believes the retail customer won't pay more than the current retail price, what is the most the retailer would be .willing to pay the distributor for shoes?
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