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Selling price and Sales volumes
Our strategy is to drive sales through penetration marketing, using competitive pricing. Gourmet Selects will do this by utilizing Hellmann’s brand equity and offering an all natural product, in which we will command a higher price. Our competitors in the spreads category, with the same target demographic, average a selling price of $8 for a 4-6oz jar. They are smaller niche brands that do not have the brand recognition and supply chain as Hellmann’s. We feel that we have a competitive advantage and will be able to price our products at a lower price. Based on our current manufacturing operations and variable cost, we predict that we can price Gourmet Selects for roughly $5.99 for a 9 ounce jar. This will place
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With high sales volumes through units sold, we will steal market share from our competitors. Our target consumer will be Millennials age 25-34, who primarily live in urban areas with an annual income of $55k per year. There are currently 273 million people living in urban areas in the United States. Of this population, 90 million have an income of $55,000 per year, but only 41 million are between our target age of 25-34. Based on our survey, 46% of the respondents are the acceptors of our concept, reducing our available market for 18.9 million. With 40% retail distribution, we have a total available market of 7.5 million. First year trial is 30%, further reducing our available consumers to 2.3 million. With a frequency rate of 3, we expect to sell 6.8 million units at $4.19 a jar, for a total first year sales revenue of $28.6 million. This represents 1.4% of the mayonnaise category and 43% of Hellmann’s sales. Based on projected category growth, we anticipate sales to follow this trend and increase 5% year over year (yoy) through …show more content…
In recent years we have seen a resurgence of the “Mason Jar.” According to the New York Times, Jarden Home Brands a major manufacturer of Mason Jars has doubled its sales since 2001; the drive behind the craze are Millennials. Millennials tend to go for products that are in glass jars and locally grown/crafted. Consumers looking for better quality all-natural products tend to go for glass jars; because it maintains the quality, flavor, and purity of the food. Last but not least the glass jar also fits Unilever’s sustainability goals. Over all glass is stronger, reusable and easier to recycle versus plastic. However using recycled glass is more expensive than regular glass, making the cost .30 cents per unit. Gourmet selects hopes to work with local governments on ways to drive down the cost of glass recycling programs. The cost of producing our packaging label is .02 cents per unit. Our distribution cost is 7% of our sales, making the total cost $.02 cents per unit. Our total packaging cost is $0.34 cents per unit. Direct labor and overhead is 30% of what the cost of our raw materials are, which are approximately $0.30 per
If the firm decides to pursue alternative two, Burroughs and Wellcome must construct a new pricing strategy. Some of the firm’s uncertainties consist of the public perception of the company, the implication of the current pricing strategy to revenues, the effect to the bottom line because of the reduction in price, the impact of an introduction of a new product from other competitors in the future, and the unclear outcome on profits due to regulatory constraints.
Some of the practices that Greggs have implemented throughout the marketing sector, in order to be responsible business is how they price their products. Greggs have many different products, whic...
This diversity will make for a powerful word of mouth marketing campaign using social media to spread the word and the television and online advertising efforts offering a money-back guarantee, free samples and community website links. We will focus on both the “Bohemian Mix” from this geographic area that includes people from these ethnic backgrounds in households made up of a mixture of different family members from different age groups, but under age 55, many with pets, who like to try the “newest coffee brew” or product. Their median income is over $56,000 a year and they are upwardly mobile. We also chose the “Young Digeratis” who are made up of the wealthier and younger family mix ages 25 to 44. They like to stand out above others and only accept the highest quality of food and drinks. They drive the most expensive autos and spare no expense on their clothes and
Persuasion has always played an intricate role, in many ways, when it comes to promotion of a Fortune 500 companies like C.V.S. corporation. With the largest pharmacy chain of over 7400 stores in United States; no wonder they are at the top five largest pharmacies in the United States based on revenue generated from prescription only. However it's not only prescription is sold in stores; there are assortment of general merchandise including food, sundries, beauty products as well as health products sold there. In one of the stores I visited for this paper, located at 39th and Main street, I noticed that the products were sold in minute quantities so as to reduce the price of the merchandise.
Steve Oliver Maass purchased a grocery store that was in bankruptcy back in 1988, in Cotati, CA, mortgaging his house to come up with the payment of $200,000. Although he had no grocery store experience besides working in the produce department of one, he felt he could not do any worse than the previous owner did. The store was run down and a mess requiring a lot of cleaning. With limited funds, he was only able to paint instead of doing much remodeling, as he wanted to do. Maass renamed the store Oliver’s Market after his middle name, and he and his wife worked the store for the first four years. During those years, Oliver’s added a Service deli and a Health foods section. Following the format of Whole Foods, Oliver’s carried a section of organic health foods and included conventional items as well.
Today’s society is full of products that have numerous varieties. But, little do customers know about the time before when there was one type of each product. In Malcolm Gladwell’s “Ketchup Conundrum” article, he offers many different situations providing an explanation on how some products came to be, and how some name brands made their way into the business world. Consumers are lucky today that there is almost any variety of product to fit their wants or needs.
Since Serve Up Smoothie’s products are made with only the highest quality ingredients, this causes our prices to be higher than our competitors – making us the most expensive smoothie shop in the local market. However, the problem is that since our main target consumers are college students, who are notoriously known for being “broke”. For example, total outstanding student loan debt in the United States totals to around $1.2 trillion, second in highest consumer debt to mortgages (Berman, 2016). Most students do not have the money to be going around freely spending money, especially on an unnecessary good like a high priced smoothie. Which is why maybe if these students wanted a smoothie they would go to our competitors or make it themselves at hope, more wallet-friendly
Commercial products have been around since the beginning of time. Manufacturing millions of products such as Ketchup for consumers to use daily. One might argue that buying house hold items can be such a hassle even for consumers who barely have time to get ready for work, let alone clean after themselves. The need for more items influences consumers to evolve from prehistoric cave dwellers into item entrepreneurs through introducing multiple platforms to spread news about a product, appealing visually for customers to go buy it, and demonstrating why traditional ways of doing things helps improve modern cultures to expand newer ideas for buyers to sell or buy as they please.
According to Aaker (1990), two-thirds of the food product found on store shelves, are brand extension, which suggest the competitiveness of the business. It becomes imperative that marketers stay abreast of the shifts: who purchase the products; focus on the ideal target or segments; involve band loyalties on planning,
However, because of its demographic it was losing a high customer base because of its prices. The text book Chapter 10 emphasized the importance of pricing and creating profit. The investor Marcus Lemonis showed the owners how to evaluate demand and the price sensitivity of their products. He introduce product that could be brought in with lower price points that would compete with their competitor and still crate the high-end prestige the company wish to create. Taking advantage of the income statues of the company’s customer with in their demographic. One major problem the company had was the price point of a bag of dog food was around $100 per bag that was a high price for the consumers within the area. By bring in a brand that had high quality and prestige at a price point of $20 allowed for a greater customer
Heinz continues to increase their business while at the same time maintaining a global ecological impact with their partners and suppliers. The company has a workable and cost-effective growth achieved by collaborating with product suppliers. This can also be achieved in educating all agriculturalists in the best practices of growing tomatoes, not only more resourcefully, but more sustainably, be beneficial for the environment, as well as provide an advancement in economic and social concerns of health. The most essential part of a brands viable operating process is the combination of merchants, their products, materials, and services, which are crucial to the Heinz Company. To ensure that every phase in the brands process is capable of manufacturing, marketing, and frequently improving the thousands of distinctive food and condiment items produced for today’s market. Heinz has ...
Pricing, McCain Foods employs different pricing strategies and are directed to adding value for money and customer-center approached is been working quite effective. One of the strategy providing the consumers with extra perks. Like ‘extra-fill ' packs can give the customer up to 30% extra free. This helps regular buyers of a particular product. They also offer its products at a special promotional price (Price marked on packs) to encourage people to try the product.
Walking through the aisles of many grocery stores, labels such as "organic," "all-natural," and "dairy-free" describe an ever-increasing number of products on the shelf. A growing interest in healthy eating has spurred the manufacture of these commodities, but they are often so highly priced that many of the shoppers cannot justify fitting the extra cost into their budgets. In addition, though these goods have been organically produced, they may have traveled long distances to reach the shelf, increasing price and reducing their freshness, not to mention the environmental damage caused by burning fossil fuels during transportation.
A market where people can buy healthy, sustainable, organic local foods and goods, all without the marketing ploys and harmful environmental effects of wasteful packaging. It has been reported that 23% of all landfill waste is excess packaging, and certain modifications in types of packaging, like tin-foil liners in burger cartons or wrappers, makes then unable to be recycled and also inhibits their decomposition (EPA). By sourcing from local farmers and growers, and eliminating excess waste, the cost-effectiveness is passed on to the community
After looking at trends in the market and seeing that consumers are becoming more health conscious and the need for food that is easy to prepare it was decide that this product would do well in a consumer market made up of mid and upper mid income families and individuals.