emphasized by the 1. Famous Facelift Company, a local manufacturer of beauty care products, has just...
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emphasized by the 1. Famous Facelift Company, a local manufacturer of beauty care products, has just come out with a new "facial creme" which it plans to sell through area retailers. Its expectation of profits is shown in the table below for each of three possible levels of demand that may be attained under three possible price levels the company is considering: Heavy Demand Light Demand Moderate Demand Price $10 -20 Merothan 30 Total 40 Price $20 100 200 -10 Price $30 200 120 -30 Above Profit Figures in $ '000 a. If the company considers the chance of each of the levels of demand being realized as Light 0.4. Moderate = 0.3 and Heavy = 0.3, which of two marketing research agencies' proposals for a test market would you prefer? (Assume the company wants to maximize expected profits). Agency A Agency B Test Market Bid $25,000 Test Market Bid $45,000 b. Is there any situation in which you would prefer the other agency? Why or why not? (7+3 points) OR Stouffer Foods recently developed a new line of frozen entrees. Assume that prior to introduction, Stouffer Foods management felt the product had a 60 percent chance of success. If successful, the new line would generate $8 million in profits over the planning period. If unsuccessful, it would generate the same amount ($8 million) of losses. (continued on next page) a. Assuming that Stouffer Foods would like to maximize the expected profit, what is the most it would be willing to pay for a perfectly accurate test market? emphasized by the 1. Famous Facelift Company, a local manufacturer of beauty care products, has just come out with a new "facial creme" which it plans to sell through area retailers. Its expectation of profits is shown in the table below for each of three possible levels of demand that may be attained under three possible price levels the company is considering: Heavy Demand Light Demand Moderate Demand Price $10 -20 Merothan 30 Total 40 Price $20 100 200 -10 Price $30 200 120 -30 Above Profit Figures in $ '000 a. If the company considers the chance of each of the levels of demand being realized as Light 0.4. Moderate = 0.3 and Heavy = 0.3, which of two marketing research agencies' proposals for a test market would you prefer? (Assume the company wants to maximize expected profits). Agency A Agency B Test Market Bid $25,000 Test Market Bid $45,000 b. Is there any situation in which you would prefer the other agency? Why or why not? (7+3 points) OR Stouffer Foods recently developed a new line of frozen entrees. Assume that prior to introduction, Stouffer Foods management felt the product had a 60 percent chance of success. If successful, the new line would generate $8 million in profits over the planning period. If unsuccessful, it would generate the same amount ($8 million) of losses. (continued on next page) a. Assuming that Stouffer Foods would like to maximize the expected profit, what is the most it would be willing to pay for a perfectly accurate test market?
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Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date:
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