1. Cost savings with new technology = $1.50 x 30%
EVC of new bulb = Reference Value + Differentiation Value
= $1.50 + ($0.45 + $2)
2. I do not agree that companies should stop investing in “pushing promotions” and put their money into attracting consumers to the company with so called “pulling promotions”. They each serve their purpose in the very diverse market of consumers.
“Pushing promotions” are more useful at the start of a product life cycle, or when a company is starting out. These are useful in helping to get the name of the new company/product out through TV commercials or Radio Blasts, helping them to establish themselves in a new market.
This is in comparison to “Pulling promotions” that are more useful when the company or product has established itself. Such promotions are used to create demand, which pulls customers to their company.
3. Product Returns can be good for sellers as they help to guarantee the buyer’s purchase. While this may on the surface seem to result in losses for the retailer, it might in fact have benefits for retailers. By guaranteeing the buyer’s purchase, this might result in a larger purchase by the buyer. Furthermore, such a policy can help to ensure and build an effective and good long term customer relationship.
As for the clothing industry, by having product returns, it might help the retailer correctly understand the consumer buying patterns with regard to sizing, helping the retailer to order the right amount the following season, cutting down on wastage in inventory.