Question: according to the data given and shown, answer ALL 4 questions below. Branding Decisions Wholesteen Dairy, Inc. produces and sells Wholesteen brand condensed milk to

Branding Decisions Wholesteen Dairy, Inc. produces and sells Wholesteen brand condensed milk to grocery retailers. The overall market for condensed milk is fairly flat, and there's sharp competition among dairies for the retailer's business. Wholesteen's regular price to retailers is $8.88 a case for 24 cans. Foodworld - a fast growing supermarket chain and Wholesteen's largest customer - buys 20,000 cases of Wholesteen's cases of condensed milk a year. That's 20% of Wholesteen's total sales volume of 100,000 cases per year. Foodworld is proposing that Wholesteen produce private-label condensed milk to be sold with the Food World brand name. Food World proposes to but the same total quantity as it does now, but wants it half to be with the Wholesteen brand and half with the food World brand name. Food World wants Wholesteen to reduce costs by using a lower quality can for the Food World brand. The change will cost Wholesteen $.01 less per can than it costs for the cans Wholesteen uses for its own brand. Food Worldwill also provide printed labels with its own brand name - which will save an additional $.02 a can. Wholesteen spends $70,000 a year on promotion to increase consumer familiarity with the Wholesteen brand. In addition, Wholesteen gives retailers an allowance of $.25 a case for their own local advertising, which features the Wholesteen brand. Food World has agreed to give up the advertising allowance for its own brand, but it is only willing to pay $7.40 a case for the milk that will be sold under the food World brand name. It will continue under the old terms for the rest of its purchases. Sue Glick, Wholesteen's marketing manager, is considering the Food World proposal. She has entered cost and revenue data into a spreadsheet so she can see how clearly the proposal might affect revenue and profits. 1. Based on the data on the spreadsheet, how will Wholesteen's profits be affected if Glick accepts the Food World proposal? 2. Glick is worried that Food World will find another supplier for the Food World private milk label if Wholesteen rejects the proposal. This would immediately reduce Wholesteen's annual sales by 10,000 cases. Food World might also stop buying from Wholesteen altogether. What would happen in each of these two situations? 3. Food World is rapidly opening new stores and sells milk in every store. The food World buyer says that next year's sales could be up to 25,000 cases of Wholesteen's condensed milk. But, Sue Glick knows that Food World might stop buying the Wholesteen brand and want all 25,000
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