Speed: Marketing and High Medium Low

Topics: Marketing, Price, Profit Pages: 2 (408 words) Published: September 19, 2010
Assignment 2: - 21-Speed Gizmos: Break-even and marketing profitability. By- Rohit Pratap Singh

Questions:
1. Gizmos selling price at each suggested retail price?
Ans:-
|Retail Price |$124.95 |$99.95 |$74.95 | |Selling Price |$87.47 |$69.97 |$52.47 |

2. Break-even Volume of DCS assembly at $124.95? $99.95? $74.95? Ans:-
|Retail Price |$124.95 |$99.95 |$74.95 | |Break-even Volume: |9392 |14073 |28056 |

3. Profit margin before taxes for 1993 and 1994 at $74.95?
Ans:-
Profit Befor Tax @ $74.95 in 1993 = $403,364
Profit Befor Tax @ $74.95 in 1994 = $568,037

4. How would you price the DCS?
I would price it at $99.95.

Would you launch the DCS?
Yes certainly I will.
Reasons:1. Brake even in less than a year.
2. More than 100% profit in the very first year and subsequent years 3. Increased revenue in sale would consolidate its position in the market segment. 4. Profit Realization from DCS sales will provide extra income to invest in new products. 5. With Increasing revenues and Profits, Investors will become interested In Speed Gizmos thus opening new financial sources to fund new projects.

I would price it at $99.95.
Reason- Consider Following Profit Calulations
| |Year |High |Medium |Low | |Retail price | |$124.95 |$99.95 |$74.95 | |Selling Price | |$87.47 |$69.97 |$52.47 | |Total Profit Before Tax |1993 |$698,006 |$699,197 |$403,364 | |Total Profit Before Tax |1994 |$921,608 |$923,036 |$568,037 |...
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