Economics practice

Economics practice

  • Submitted By: bochin2
  • Date Submitted: 09/11/2016 4:05 AM
  • Category: Science
  • Words: 1205
  • Page: 5

Your team has been hired by The Times, and tasked with working to maximize revenues for the grocery store. You are working in the Pricing and Merchandising department of the company, and will be assessing proper pricing and merchandising (the activity of promoting the sale of goods, especially by their presentation in retail outlets) practices to maximize store revenue. You have been given some specific products, accompanied by data, that you are to focus on in your effort to maximize revenues.

The culmination of this effort needs to be a professional proposal that provides specific suggestions and reasoning to upper management. Remember that your primary task is to maximize total revenue for the company by executing a successful pricing and merchandising strategy.

The Product List: The following products are the items of interest that upper management wants you to structure your strategy efforts around.

- Coke 12 pack
- Ruffles Chips
- Pretzels
- Corona 6 pk
- Men’s Dove Deodorant
- Men’s Dove Face lotion
- Devondale Milk

Your proposal will include:
- Price for each product, and explanation of why (this coincides with Revenue and Elasticity values)
- A suggestion on how to merchandise each product, if needed/created, and why that decision has been made.

The Product Information: The following outlines the current data we have for the product in terms of price and demand, and relationships between products.

Coke 12 pack -
PRICE Quantity Demanded (in a week)
$45 rmb 125
$50 rmb 115
$55 rmb 100
$60 rmb 75
The current price is set at $55 rmb. Store sales also show a relationship between the price of Ruffles and Coke 12 packs. When the price of Ruffles has been dropped by 5% there has been an increase of Coke sales of 4%, and when the Ruffles price has been dropped by 10% there has been an increase of Coke sales by 15%.

Ruffles Chips
PRICE Quantity Demanded (in a week)
$20 rmb 120
$27 rmb 101
$30 rmb 100
$35 rmb 65

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