case a good deal for the customer – a good deal for the company?

Project Description:

case: endless crab feast:
a good deal for the customer – a good deal for the company?

the offer: all-you-can eat crab for $22.99

some facts:
1) the company enjoys a leadership position; accounting for 65% of us crab consumption
2) the current (and maintained) price for a single crab serving is $ 9.99, both in the company’s restaurant and that of major competitors
3) the number of serving per customers is between 1 and 4, with a median of 1.5
4) a crab serving is 1.5 pounds (which includes 0.75 pound of crabmeat)
5) the wholesale price of crab may fluctuate between $3.5 and $7 per pound depending on the demand level and government crab-catching quotas – with a median of $ 4, which is also the current wholesale price of crabmeat
6) the cost of the crabmeat represents 50% of the total cost of current meals (including ingredients, labor costs, etc., which depend proportionally on the number of servings)

1) what is the likely return on investment for this planned promotion?
2) which factors should you consider when deciding on whether or not to go ahead with it? which risks are involved and how should you address them?
3) should the company go ahead with this promotion as is?
4) if not, what do you suggest (e.g. adapting the promotion, doing something else,…)?
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Project Stats:

Price Type: Negotiable

Total Proposals: 9
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