You are the vice president for marketing at Lucky Liquor, a manufacturer of liquor. During a meeting

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You are the vice president for marketing at Lucky Liquor, a manufacturer of liquor. During a meeting with your staff, several pricing proposals are made with strong arguments to support each proposal.

a. Lucky Liquor should set a minimum price per ounce that the wholesalers can charge.

b. Lucky Liquor should set a maximum price per ounce that the wholesalers can charge.

c. The wholesalers can charge any price they want within a certain range; if they charge a higher price, they must give the customer a rebate coupon for the differential.

d. The wholesalers can charge any price they want, but if they advertise a price that is less than Lucky Liquor’s specified minimum advertised price, the wholesalers are not entitled to receive the marketing funds that Lucky Liquor provides to wholesalers that do not advertise prices that are less than the specified minimum advertised price. After the meeting, you are considering the pros and cons of each plan so that you can make a recommendation to the president. Although each plan has different marketing advantages, your staff estimates that each will result in approximately the same level of sales. What other factors should you consider before making your recommendation? What are the legal pros and cons of each proposal? What else do you need to know before calculating the legal tradeoffs among the proposals?


Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
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