Transcript My Own Meals Case

My Own Meals Case
1. Determine the markup for each
distribution channel:
–
Supermarkets use “standard markup pricing”
which entails adding a fixed % to each
product category:
•
•
staples (bread, sugar, milk) = 10-23%
discretionary (snack foods, candy) = 27-47%
My Own Meals Case
2. Set prices for each distribution channel (4)
3. Determine cost of goods sold – MOM’s COGs is
higher due to the learning curve, small initial
production runs and high raw material quality
coupled with lower purchase volumes
4. Determine MOM’s COGs
5. Calculate MOM’s Gross Profit
6. What promotional activities do you recommend
and what is the estimated annual promotional
budget based on MOM’s pricing objectives?
MOM Case Grading
• Used market down approach based on competitive
positioning (10%)
• Used market down approach considering elasticity of
demand (10%)
• Recognized retail margins (20%)
• Recognized distribution channel intermediaries (15%)
• Set specific price(s). Stated strategy (20%)
• Showed calculations for each price set (15%)
• Looked at overall P&L aspects (10%)