Case study: Starbucks fair trade line -What kinds of power does Starbucks hold over their suppliers in this case? -Use the double marginalization problem and solution guides to structure two alternatives: Prices to consumers are maintained at $8 and profits are split 3:1 in favor of Starbucks Prices are raised 25% to $10 and profits are split 2:1 in favor of Starbucks -What are the resulting mark-ups for the manufacturer and retailer (Starbucks) under each scenario? How will suppliers and consumers respond to either scenario? In answering the case questions, assume the following: Current price is $8.00 for a bag of this coffee Manufacturer costs have been $2.00 Manufacturer mark-up has been $2.00 (and they’re seeking more) Retailing costs have been $1.00 Retailing mark-up has been $3.00
Case study: Starbucks fair trade line -What kinds of power does Starbucks hold over their suppliers in this case? -Use the double marginalization problem and solution guides to structure two alternatives: Prices to consumers are maintained at $8 and profits are split 3:1 in favor of Starbucks Prices are raised 25% to $10 and profits are split 2:1 in favor of Starbucks -What are the resulting mark-ups for the manufacturer and retailer (Starbucks) under each scenario? How will suppliers and consumers respond to either scenario? In answering the case questions, assume the following: Current price is $8.00 for a bag of this coffee Manufacturer costs have been $2.00 Manufacturer mark-up has been $2.00 (and they’re seeking more) Retailing costs have been $1.00 Retailing mark-up has been $3.00
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Case study: Starbucks fair trade line
-What kinds of power does Starbucks hold over their suppliers in this case?
-Use the double marginalization problem and solution guides to structure two alternatives:
Prices to consumers are maintained at $8 and profits are split 3:1 in favor of Starbucks
Prices are raised 25% to $10 and profits are split 2:1 in favor of Starbucks
-What are the resulting mark-ups for the manufacturer and retailer (Starbucks) under each scenario? How will suppliers and consumers respond to either scenario?
In answering the case questions, assume the following:
Current price is $8.00 for a bag of this coffee
Manufacturer costs have been $2.00
Manufacturer mark-up has been $2.00 (and they’re seeking more)
Retailing costs have been $1.00
Retailing mark-up has been $3.00
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