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My Own Meals Case

My Own Meals Case

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My Own Meals Case

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  1. My Own Meals Case • Determine the markup for each distribution channel: • Supermarkets use “standard markup pricing” which entails adding a fixed % to each product category: • staples (bread, sugar, milk) = 10-23% • discretionary (snack foods, candy) = 27-47%

  2. My Own Meals Case • Set prices for each distribution channel (4) • Determine cost of goods sold – MOM’s COGs is higher due to the learning curve, small initial production runs and high raw material quality coupled with lower purchase volumes • Determine MOM’s COGs • Calculate MOM’s Gross Profit • What promotional activities do you recommend and what is the estimated annual promotional budget based on MOM’s pricing objectives?

  3. MOM Case Grading • Used market down approach based on competitive positioning (10%) • Used market down approach considering elasticity of demand (10%) • Recognized retail margins (20%) • Recognized distribution channel intermediaries (15%) • Set specific price(s). Stated strategy (20%) • Showed calculations for each price set (15%) • Looked at overall P&L aspects (10%)