Week 4 Discussion

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Bellevue University *

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210

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Marketing

Date

Feb 20, 2024

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Uploaded by jennb516x

nstructions Use the following documents, along with this week's readings and videos to answer the questions below:  Permanent Price Reduction (Markdown) Strategy Case Study. (n.d.). Bellevue University  Permanent Price Reduction (Markdown) Strategy Case Study Spreadsheet. (n.d.). Bellevue University 1. Research different strategies for determining markdowns in various industries in the U.S. 2. Based on course resources, research, and the case study & spreadsheet, answer the following questions (be sure to show your calculations for questions a. through d. to support your answers): a. What are the total projected sales for the upcoming promotional event? b. What are the total projected price reduction (markdown) dollars for the event? c. What is the price reduction (markdown) percentage for the event? d. What is the margin percentage for all of the items being sold during the event? e. Identify another price reduction (markdown) strategy Jimmy could have used, and explain how its use could influence the results in the case study. 3. Choose a retail product or product category that you believe has particular appeal to retail customer groups. Recommend one price reduction (markdown) strategy and explain how it would appeal to those customers and drive the product's or product category's performance. 1) What are the total projected sales for the upcoming promotional event? Total Projected Sales = Total Projected Sales at Full Price + Total Projected Sales at 30% Off + Total Projected Sales at 50% Off + Total Projected Sales at 70% Off = $174,557 + 54,391 + $26,238 + $19,235 = $274,421 2) What are the event's total projected price reduction (markdown) dollars? Total Projected Markdown Dollars = Total Projected Markdown Dollars at 30% Off + Total Projected Markdown Dollars at 50% Off + Total Projected Markdown Dollars at 70% Off = $23,311 + $26,238 + $44,881 = $94,430 3) What is the event's price reduction (markdown) percentage? Price Reduction Percentage = Total Projected Markdown Dollars / Total Projected Sales = $94,430 / $368,850 = 25.6% 4) What is the margin percentage for all items sold during the event? Average Margin Percentage = (Total Projected Sales - Total Projected Cost) / Total Projected Sales = ( $274,421- $94,430) / $274,421 = 65.6%

5) Identify another price reduction (markdown) strategy Jimmy could have used, and explain how its use could influence the results in the case study. Jimmy also could have used a linear markdown method, where he reduces prices by a certain percentage each time (such as 10% per week). This could result in lower initial sales but later, fewer major discounts. It can lower the total amount of the markdown. 6) Choose a retail product or product category that you believe has particular appeal to retail customer groups. Recommend one price reduction (markdown) strategy and explain how it would appeal to those customers and drive the product's or product category's performance. A method that may be appealing to those who are health-conscious for fitness trackers/wearables would be random flash sales with a small discount (15-25%). This keeps the value of the items while creating a sense of excitement and savings. Customers who are focused on their health and fitness goals would be more likely to be interested in and give these items a chance.

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