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Essay / Research Paper Abstract
A 2 page paper discussing the results of a marketing simulation, one focusing on pricing and profitability of computers and printers in England. The simulation requires accounting for both profitability and unit sales. Bibliography lists 2 sources.
Page Count:
2 pages (~225 words per page)
File: CC6_KSmktgSim3a.rtf
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Unformatted sample text from the term paper:
was slower than desired; I was able to gain sales of only 152,044 (target 160,000) with a profitability of 5.7 percent rather than 6 percent. Increasing the price from
$945 to $995 increased profitability, but dropped sales to a greatly unacceptable level rather than missing the target by only 8,000. Year 2
was better, but only on the second try. With a target of 205,000 units and a budget of $35 million, combining distributor margin of 6.8 percent, retailer margin 9.4
percent and giving a printer to every 50th customer resulted in zero sales. Distributor margin was not high enough to pique their interest so they turned their attention elsewhere.
Trying again to increase distributor margin to 7 percent while keeping the other two values at the same level resulted in sales of 206,250, exceeding target.
Year 3 was the best, however. Given a target of selling 100,000 printers with a minimum profitability of 5 percent, the package offered to the
market was an introductory price of $260; a bundled price of $200; and an existing customer price of $200. This combination resulted in the sale of 102,000 units with
a profitability of 5.35 percent, exceeding targets on both measures. Concepts This simulation demonstrates the critical point of getting it right the first
time. The decision-maker can start over again when the problem is contained to a computer screen and only phantom cash is involved, but real-world marketers get only one chance
to gain the best results possible. The simulation also illustrates the need for keeping distributors happy. Missing distributors threshold by only 0.2
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