The company plans to use social media to gain buzz around the new product but will also be spending money on advertising and sales promotion through coupons to consum- Foods would like to be able to sell the boxes at retail for $5. ers and price incentives to distributors and retailers. Whole Because the retailer typically requires a 30 percent markup, Touch of Beirut's price to the supermarkets will be $3.50 per box. The unit variable costs for the product, including pack- aging, will be $1.25. Touch of Beirut estimates its advertising and promotion expenses for the first year will be $2,500,000. 10-19. What is the contribution per unit for Hummus-to-Go? 10-20. What is the break-even volume for the first year that will cover the planned advertising and promotion (1) in units and (2) in dollars? 10-21. How many units of Hummus-to-Go must Touch of Beirut sell to earn a total profit of $1,000,000? 10-22. Based on the above, does this seem like a good busi- 10 ness venture to you? Why or why not?
The company plans to use social media to gain buzz around the new product but will also be spending money on advertising and sales promotion through coupons to consum- Foods would like to be able to sell the boxes at retail for $5. ers and price incentives to distributors and retailers. Whole Because the retailer typically requires a 30 percent markup, Touch of Beirut's price to the supermarkets will be $3.50 per box. The unit variable costs for the product, including pack- aging, will be $1.25. Touch of Beirut estimates its advertising and promotion expenses for the first year will be $2,500,000. 10-19. What is the contribution per unit for Hummus-to-Go? 10-20. What is the break-even volume for the first year that will cover the planned advertising and promotion (1) in units and (2) in dollars? 10-21. How many units of Hummus-to-Go must Touch of Beirut sell to earn a total profit of $1,000,000? 10-22. Based on the above, does this seem like a good busi- 10 ness venture to you? Why or why not?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:CHAPTER 10 PRICE:
The company plans to use social media to gain buzz
around the new product but will also be spending money on
advertising and sales promotion through coupons to consum-
ers and price incentives to distributors and retailers. Whole
Foods would like to be able to sell the boxes at retail for $5.
Because the retailer typically requires a 30 percent markup,
Touch of Beirut's price to the supermarkets will be $3.50 per
box. The unit variable costs for the product, including pack-
aging, will be $1.25. pl
Touch of Beirut estimates its advertising and promotion
expenses for the first year will be $2,500,000.
10-19. What is the contribution per unit for Hummus-to-Go?
10-20. What is the break-even volume for the first year that
will cover the planned advertising and promotion (1) in
units and (2) in dollars?
10-21. How many units of Hummus-to-Go must Touch of
Beirut sell to earn a total profit of $1,000,000?
10-22. Based on the above, does this seem like a good busi-
ness venture to you? Why or why not?
on Holpe
TIC
Choices: What Do You Think?
consumers at different prices based on the user's
19-23. Ethics Several online stores now sell products to
Pographic location-which
titors and your
1
Transcribed Image Text:c. Smart TVs ve Su
d. Smartphones
stand th
oppor
net pr
Concepts: Apply Marketing Metrics
Contribution per unit and break-even analysis are two popular
and very useful metrics for marketing decision making. These
analyses are essential to determine if a firm's marketing oppor-
tunity will mean a financial profit or loss. As explained in the
chapter, contribution per unit is the difference between the
price the firm charges for a product and the variable costs.
Break-even analysis that includes contribution tells marketers
SW
how much must be sold to break even or to earn a desired
amount of profit.
ansmonann
Let's assume that Touch of Beirut Brands is a Los Angeles-
based producer of Lebanese specialty foods and ingredients. In
the past, the firm has marketed primarily through restaurant dis-
tributors to small mom-and-pop Lebanese cuisine restaurants
around the U.S. But recently they've developed a marketing plan
to sell a combination hummus and pita slices packaged product
that is ready to eat-sort of like the famous boxed Oscar Mayer
Lunchables. They've branded the new product "Hummus-to-
Go," and outlets will be Whole Foods and other supermarkets
that stock healthier fare.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 4 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education