Learning Activity - Marketing 2150 Spring 2020 Chapter 9 - Pricing Breaking Even with Touché Toiletries In this learning activity, we will develop skills related to discussing the value of break-even analysis and conducting break-even calculations. Break-even analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. The break-even point (BEP) is the quantity at which total revenue and total cost are equal. Profit comes from any units sold beyond the BEP. The break-even point (BEP) is calculated as follows: BEP = FC/(P - UVC) BEP = Fixed Cost Unit Price - Unit Variable Cost Using the Break Even Point Formula listed above, complete a break even analysis for the following scenario: Touché Toiletries, Inc., has developed an addition to its Lizardman Cologne line tentatively branded Ode d'Toade Cologne. Unit variable costs are 45 cents for a 3-ounce bottle, and heavy advertising expenditures in the first year would result in total fixed costs of $900,000. Ode d'Toade Cologne is priced at $7.50 for a 3- ounce bottle. How many bottles of Ode d'Toade must be sold to break even? Suppose that marketing executives for Touché Toiletries reduced the price to $6.50 for a 3-ounce bottle of Ode d'Toade and the fixed costs were $1,100,000. Suppose further that the unit variable cost remained at 45 cents for a 3-ounce bottle. (a) How many bottles must be sold to break even? (b) What dollar profit level would Ode d'Toade achieve if 200,000 bottles were sold?
Learning Activity - Marketing 2150 Spring 2020 Chapter 9 - Pricing Breaking Even with Touché Toiletries In this learning activity, we will develop skills related to discussing the value of break-even analysis and conducting break-even calculations. Break-even analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. The break-even point (BEP) is the quantity at which total revenue and total cost are equal. Profit comes from any units sold beyond the BEP. The break-even point (BEP) is calculated as follows: BEP = FC/(P - UVC) BEP = Fixed Cost Unit Price - Unit Variable Cost Using the Break Even Point Formula listed above, complete a break even analysis for the following scenario: Touché Toiletries, Inc., has developed an addition to its Lizardman Cologne line tentatively branded Ode d'Toade Cologne. Unit variable costs are 45 cents for a 3-ounce bottle, and heavy advertising expenditures in the first year would result in total fixed costs of $900,000. Ode d'Toade Cologne is priced at $7.50 for a 3- ounce bottle. How many bottles of Ode d'Toade must be sold to break even? Suppose that marketing executives for Touché Toiletries reduced the price to $6.50 for a 3-ounce bottle of Ode d'Toade and the fixed costs were $1,100,000. Suppose further that the unit variable cost remained at 45 cents for a 3-ounce bottle. (a) How many bottles must be sold to break even? (b) What dollar profit level would Ode d'Toade achieve if 200,000 bottles were sold?
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Transcribed Image Text:Learning Activity - Marketing 2150 Spring 2020
Chapter 9 - Pricing
Breaking Even with Touché Toiletries
In this learning activity, we will develop skills related to discussing the value of break-even analysis and
conducting break-even calculations. Break-even analysis is a technique that analyzes the relationship
between total revenue and total cost to determine profitability at various levels of output. The break-even
point (BEP) is the quantity at which total revenue and total cost are equal. Profit comes from any units sold
beyond the BEP. The break-even point (BEP) is calculated as follows: BEP = FC/(P-UVC)
BEP =
Fixed Cost
Unit Price - Unit Variable Cost
Using the Break Even Point Formula listed above, complete a break even analysis for the following scenario:
Touché Toiletries, Inc., has developed an addition to its Lizardman Cologne line tentatively branded Ode
d'Toade Cologne. Unit variable costs are 45 cents for a 3-ounce bottle, and heavy advertising expenditures in
the first year would result in total fixed costs of $900,000. Ode d'Toade Cologne is priced at $7.50 for a 3-
ounce bottle. How many bottles of Ode d'Toade must be sold to break even?
Suppose that marketing executives for Touché Toiletries reduced the price to $6.50 for a 3-ounce bottle of
Ode d'Toade and the fixed costs were $1,100,000. Suppose further that the unit variable cost remained at 45
cents for a 3-ounce bottle. (a) How many bottles must be sold to break even? (b) What dollar profit level
would Ode d'Toade achieve if 200,000 bottles were sold?
Transcribed Image Text:<
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Learning Activity-Marketing 2150 Spring 2020
Chapter 13- Social Media and Online Marketing Communications
Best Practices in Social Media
In this learning activity, we will develop skills related to summarizing the best practices associated with the
creation and monitoring of social media programs. Social media marketing requires an understanding of what
social media offers consumers and marketers. Social media is a form of online media that allows members to
create their own network of friends and contacts to share comments, articles, opinions, videos, and images.
Social media differs from other forms of media in that is inexpensive and relatively easy to use. It needs
dedicated attention so that messaging is fresh, current, and responsive. It is labour intensive in terms of real-
time monitoring and nurturing. Questions and comments should not go unanswered on social media and
advocates should be noted. Social media is a public forum and all interactions need to be handled professionally
and in a delicate manner.
You represent the marketing team that has been charged with launching the cbdMD brand into the Canadian
market. Use the following mini-case study to answer the questions below.
CBD Md is a new entry into the market of online hemp and CBD based products available in the United
States. Their primary market is in California, but they ship their product across the mainland US. As a new
company, they pride themselves on quality and innovation. Their goal is to produce the industry's highest
quality CBD products using innovative production and manufacturing techniques. According to the founders,
"it's obvious why our CBD oil is the first choice for a wide range of people looking for natural support. From
seed to shelf, we demand the highest level of care throughout the plant's entire life cycle". CBD Md is
dedicated to quality products manufactured using premium methods that are third party tested, vegan, non-
GMO, THC free, and that provide a superior broad spectrum experience for users. Their best selling products
at the moment are their CBD PM (Sleep Aid), their CBD Pet Products (PAW CBD) and their cbdMD Gummies
and Oil Tinctures.
Questions
Learn more about CBD MD at https://www.cbdmd.com/
1. What are some of the charecteristics of social media that you should be aware of when launching cbdMD
in the Canadian market?
2. Which of the following best practices would you prioritize if you were advising the cbdMD team on their
social media or online communication strategy?
•
Obtain senior management commitment.
Set company-wide governance for social media.
•
Create detailed social media policies, guidelines, and rules of engagement.
Set clearly defined and measurable social media marketing objectives.
•
Select a platform that will be used to deploy, monitor, and measure social media activity.
Identify the social networks that will be used.
•
. Establish metrics that will be used to evaluate approaches.
Dedicate, train, and hire social media marketing experts.
Understand that negative comments will surface on social networks and plan to handle them.
Realize that mistakes will be made.
• Integrate social media programs into marketing practices
Learning Activity-Marketing 2150 Spring 2020
Chapter 13- Social Media and Online Marketing Communications
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