My Own Meals Case Determine the markup for each distribution channel:

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Presentation transcript:

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%

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?

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%)