Culinarian Cookware Case

1134 Words Apr 28th, 2011 5 Pages
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Subject : Case Report -3 : Culinarian Cookware
Question 1) There is some uncertain information to say that the 2004 promotion profitable. Firstly, both Brown and Janus, the consultant, calculated the variable cost by using two ways. The consultant added all expenses which have administrative cost, manufacturing overhead, advertising / promotion expense, selling expense and direct labor and raw material cost. On the other hand, Brown added only direct labor and raw material cost as a variable cost. Moreover, both of them found the sales without promotion differently. Janus worked with several companies by using a computer-generated model to forecast the number of sales without promotion,
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In the light of the information I found, I conclude that total gain from promotion is $1,791,744 and the promotion is profitable.

My logic - Pricing and Cost Data For Culinarean 's CX1 2004 Promotion | Per Unit ($) | Non-promoted | 10% Promotion | Average retail selling price | 150.00 | 135.00 | Average manufacturers selling price | 72 | 70.2 | Variable costs | 38.64 | 38.64 | Average contribution | 33.36 | 31.56 |

Assumptions CX1 March-May Sales Without Promotion: | 119,504 | | Promotion Lost: | $ 1,851,536.28 | CX1 March-May Sales With Promotion: | 184,987 | | | | | | | | | | | | | Assumption DX1 Spring Sales Without Promotion: | 134,180 | | Cannibalization Lost | | DX1 Spring Sales With Promotion: | 129,356 | | Calculated As: | $ -99,332.00 | | | | | | | | | | Assumption Cost Saved Due Inventory Cost | | | Inventory Gain | $ 39,540.00 | | | | | | | | | | | | | | | | Total Gain/Lose | $ 1,791,744.28 |

Question 2)
We should look at the objective of the company before our decision about promotion. According to the case, Culinarian Cookware’s marketing objectives were set by CEO Audrey Roux roll out of the four main priorities for the company: (1) widen its distribution network, (2) increase its market share of premium cookware segment, (3) preserve its prestigious image, and (4)
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