I am having a difficult time on retail strategy for week 3 backpack simulation. I need to pick a price to sell my backpack to reach the following goals:

Mission Goals

• Net Profit of at least $1000
• Gross Margin of at least 30%

This is your last turn to achieve your goals of a $1,000 NET PROFIT and a GROSS MARGIN of 30%. Are you headed in the right direction from turn 1 to turn 2? If so, what worked? If not, what changed? If your GROSS MARGIN is increasing but your NET PROFIT is not, either your costs are increasing or you are selling fewer backpacks. If the NET PROFIT is increasing but the GROSS MARGIN is not, you are selling more backpacks but at a lower profit. You may want to consider either selling or not selling through an available CHANNEL and also adjusting your PRICE.

HQ Trends Quarterly Results

2nd Quarter, 2020

Sales and financial results for the latest quarter

Income

1st Quarter, 2020

2nd Quarter, 2020

Change

Total Sales:

91

36

-55 (-60%)

MSRP:

96.00

110.00

14 (14%)

Total Revenue:

5,280.00

2,376.00

-2,904 (-54%)

Cost of goods sold:

2,457.00

972.00

-1,485 (-60%)

Gross profit:

2,823.00

1,404.00

-1,419 (-50%)

Gross margin:

53%

59%

5% (10%)

Variable Expenses

Marketing Costs:

2,700.00

2,700.00

0 (0%)

Distribution Costs:

0.00

0.00

0 (-)

Total Variable Expenses:

2,700.00

2,700.00

0 (0%)

Net Profit:

123.00

-1,296.00

-1,419 (-1153%)

Contribution Margin:

31.02

39.00

7 (25%)

Overall Market Share:

22%

8%

-14% (-63%)

Bank Balance:

10,123.00

8,827.00

-1,295 (-12%)

Summary Total Market

Total Market Size (thous):

106,171

Total Growth Rate:

4.13%

School Children

Segment Size (thous):

36,413

Growth Rate:

1%

University Students

Segment Size (thous):

26,966

Growth Rate:

5%

Urban Commuters

Segment Size (thous):

21,631

Growth Rate:

3%

Outdoor Enthusiasts

Segment Size (thous):

15,435

Growth Rate:

5%

Luxury Trendfollowers

Segment Size (thous):

5,724

Growth Rate:

7%

Thank you