Question

Select your favorite drink or snack item manufactured by a publicly held company. For this product predict the following:

1. Where is the product manufactured?

2. Given the suggested retail price of the company and using a 50% markup on price at retail, determine the sell price to the distributor/merchandiser. Review the company’s overall gross margin. If the product is sold direct to the consumer, you may apply the gross margin as calculated. Applying the gross margin percentage to your product sales price, infer the cost of the product. Present your calculations in a supporting table.

3. Complete the same exercise for a competitor’s product of the same type. Present your calculations in a supporting table included in your paper.

4. Comment on the differences in cost between the two competitors, and assert the reason for this difference (e.g., does the company compete on cost or differentiation?)

5. Apply the concept of the value chain to this product. What types of costs would be relevant for each segment of the value chain for this product?

6. Research a single critical ingredient of your snack and its source. Do you expect significant increases in the cost of this ingredient over the next year? Support your response with input from the commodities market or other economic data.

7. What are the opportunities to offset this price increase, maintain gross margin, and offer the product to consumers at the same price currently? Present your calculations in a supporting table included in your paper.

Answer 1

Answer:

      I am speaking about the product name Called Patanjali DANTKANTI Tooth paste

1. Patanjali Dankanti becomes a famous brand in India, manufacturing in Haryana.

2. Suggested Retail price of the product Dantkanti is 20 rupees for 100 grams. The markup price is 10 rupees and the product is selling at 30 rupees to the wholesalers. The gross profit margin of the firm is its total sales to gross profit.

gross profit margin= gross profit/ net sales = 10/20

     = 50% to a single product.

3. The product is offering to the retailers and distributors at 30 rupees, and they are selling the product in market for 40 rupees. The gross profit margin of the firm is its total sales to gross profit.

gross profit margin= gross profit/ net sales = 10/30

     = 33.33% to a single product.

The manufacturing cost of Close up is 30 rupees, and the Markup price is 20 rupees to the firm.

4. The same product of a competitor is offering at 50 rupees to the wholesalers and to the customers it is selling at 65 Rupees. The gross profit of Close up brand is 20/30= 66.66%.

5.patanjali is selling its product at lower cost than its competitors, the reason is they are not using any paid promotional strategies, and the cost of promotion is zero.

6. They are selling their product with the logo of SWADESH, which describes the national integrity.

7.They are following cost differentiation strategy, where the majority of total cost is much lesser than any other brand in the industry