Procter&Gamble Case Hbs

行銷管理 Case5

PROCTER &GAMBLE INC.: DOWNY ENVIRO-PAK

【第二組】 102363046黃盈智 102363078李季格

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102363110施智明 102363114容嘉麗 102363117黃柏儒

1. Grad Schnurr是否應該推出新產品Enviro-Pak? 零售價和批發價應該訂在何水準?

Price | Current:

3 litre bottle | Enviro-Pak |

| | Option 1:

everyday low price | Option 2:

discount pricing |

| Normal | Deal | 18% Margin | 25% Margin | Normal | Deal |

Retail | $7.30 | $5.99 | $6.29 | $6.29 | $7.00 | $5.60 |

Wholesale | $5.99 | $4.91 | $5.16 | $4.74 | $5.74 | $4.59 |

Variable Cost | $4.61 | $4.61 | $4.15 | $4.15 | $4.15 | $4.15 |

Contribution | $1.38 | $0.30 | $1.01 | $0.59 | $1.59 | $0.44 |

Incremental Contribution | 　 | 　 | -$0.386 | -$0.034 | 0.161

(70% normal, 30% deal) |

Grad Schnurr should launch Enviro-Pak as the product will be easy to sell to retailers since it offer less handling of the physical product for retail, while none of the profit for them disappears. The product itself is also environmentally friendly, which means that customers are more willing to buy it at the same time getting a good deal to buy it to. This will ensure more sales in the future. 

The alternative that generates most money is option 2 during normal deal; however previous sales showed that 70% of sales are made during promotion (page.3). Given, from the calculations, that promotion alone generates 44 cents, with option 2, shows that it does not contribute to as a great return in the end compared to option 1, 18% margin. Also the normal deal won’t sell as much with option 2. 

The contribution analysis also states that with the 25% deal (Option 1), we go less but it's nothing to worry about since it’s directed to wholesale. A better product that generates more money by attractiveness for the retailer already deals this with. When we look at option 1, we get a good income of $ 1 for the 18%. The 25% deal we get $12.59 on so 18% is incremental contribution to a maximum of 39 cents compared to...