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Case #2 - CanLife Active Canlife Active carries a full line of men's and women's athletic clothing sold exclusively through their website. You are the marketing manager for CanLife Active and it is your job to set prices for 6 items in their clothing line. Table 1 shows the company guidelines for pricing and discounts based on each item's position in the Product Life Cycle. Complete Table 1 using conversion formulas on the previous page. Table 1 Introduction Growth Maturity Decline Operating Expenses 80% 60% 40% 35% (% of COGS) % Markup (M) 200% 150% 52% 40% % Gross Profit Margin (GPM) % Rate of Markdown (Discount) 15% 30% 50% 70% I Unisex Hoodie Complete the pricing table below for each of the following items in their inventory. Women's Women's Men's Men's Base Men's Table 2 Yoga Fitted Yoga Wicking Layer Pants Shorts Shirt T-Shirt Bottoms Product Life Intro Intro Growth Maturity Maturity Cycle (PLC) Operating Expenses (OE) Decline Unisex Hoodie Complete the pricing table below for each of the following items in their inventory. Women's Women's Men's Men's Base Table 2 Men's Yoga Fitted Yoga Wicking Layer Pants Shorts Shirt T-Shirt Bottoms Product Life Intro Intro Growth Maturity Cycle (PLC) Maturity Operating Expenses (OE) Operating Profit (OP) Decline Markup (M) Cost of Goods Sold (COGS) Selling Price (SP) $30.00 $18.00 $18.00 $27.00 $21.00 $39.00 I Markdown (MD) Reduced Selling Price (RSP) Break Even Price (BE) Winter 2022 Pricing Strategies for Women's Yoga Shorts 1. Identify where in the PLC women's yoga shorts are. 2. What pricing strategies have been proven useful at this PLC? Cost of Goods Sold Operating Expenses B E Operating Profit P Absolute Loss Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for women's yoga shorts on the graph above. What type of profit or loss will they have? 4. Calculate the reduced operating profit they will realize at this reduced price. 5. Calculate a minimum selling price that will allow them to make a full operating (net) profit even with the 15% discount. a. What price strategy is being used? Why? b. What will the new markup be? c. What will the new markup percentage (M%) and gross profit margin (GPM ho? 4. Calculate the reduced operating profit they will realize at this reduced price. 5. Calculate a minimum selling price that will allow them to make a full operating (net) profit even with the 15% discount a. What price strategy is being used? Why? b. What will the new markup be? c. What will the new markup percentage (M%) and gross profit margin (GPM%) be? 6. Calculate a minimum selling price that will result in an operating profit of no less than $10 after a 15% discount a. What pricing strategy is being used? What are the constrains and objectives for the strategy? Case #2 - CanLife Active Canlife Active carries a full line of men's and women's athletic clothing sold exclusively through their website. You are the marketing manager for CanLife Active and it is your job to set prices for 6 items in their clothing line. Table 1 shows the company guidelines for pricing and discounts based on each item's position in the Product Life Cycle. Complete Table 1 using conversion formulas on the previous page. Table 1 Introduction Growth Maturity Decline Operating Expenses 80% 60% 40% 35% (% of COGS) % Markup (M) 200% 150% 52% 40% % Gross Profit Margin (GPM) % Rate of Markdown (Discount) 15% 30% 50% 70% I Unisex Hoodie Complete the pricing table below for each of the following items in their inventory. Women's Women's Men's Men's Base Men's Table 2 Yoga Fitted Yoga Wicking Layer Pants Shorts Shirt T-Shirt Bottoms Product Life Intro Intro Growth Maturity Maturity Cycle (PLC) Operating Expenses (OE) Decline Unisex Hoodie Complete the pricing table below for each of the following items in their inventory. Women's Women's Men's Men's Base Table 2 Men's Yoga Fitted Yoga Wicking Layer Pants Shorts Shirt T-Shirt Bottoms Product Life Intro Intro Growth Maturity Cycle (PLC) Maturity Operating Expenses (OE) Operating Profit (OP) Decline Markup (M) Cost of Goods Sold (COGS) Selling Price (SP) $30.00 $18.00 $18.00 $27.00 $21.00 $39.00 I Markdown (MD) Reduced Selling Price (RSP) Break Even Price (BE) Winter 2022 Pricing Strategies for Women's Yoga Shorts 1. Identify where in the PLC women's yoga shorts are. 2. What pricing strategies have been proven useful at this PLC? Cost of Goods Sold Operating Expenses B E Operating Profit P Absolute Loss Operational Loss Reduced Profit 3. Mark the reduced selling price (RSP) for women's yoga shorts on the graph above. What type of profit or loss will they have? 4. Calculate the reduced operating profit they will realize at this reduced price. 5. Calculate a minimum selling price that will allow them to make a full operating (net) profit even with the 15% discount. a. What price strategy is being used? Why? b. What will the new markup be? c. What will the new markup percentage (M%) and gross profit margin (GPM ho? 4. Calculate the reduced operating profit they will realize at this reduced price. 5. Calculate a minimum selling price that will allow them to make a full operating (net) profit even with the 15% discount a. What price strategy is being used? Why? b. What will the new markup be? c. What will the new markup percentage (M%) and gross profit margin (GPM%) be? 6. Calculate a minimum selling price that will result in an operating profit of no less than $10 after a 15% discount a. What pricing strategy is being used? What are the constrains and objectives for the strategy