3.3 BriteSmile brand of teeth whitening products is considering adding a modified ver- sion of the product-a gel product in addition to its regular paste product. Variable costs and prices to wholesalers are: Unit selling price Unit variable costs Current paste product $5.00 $1.50 New gel product $6.50 $3.25 BriteSmile expects to sell 2 million units of the new gel product in the first year after introduction, but it estimates that only 30% of those sales will come from buyers who do not already purchase the company's paste product (that is, new customers). BriteSmile estimates that it would sell 3 million units of the current paste product if it did not introduce the gel. If the fixed costs of launching the new gel product will be $300,000 during the first year, should BriteSmile add the new gel product to its line? Why or why not?
3.3 BriteSmile brand of teeth whitening products is considering adding a modified ver- sion of the product-a gel product in addition to its regular paste product. Variable costs and prices to wholesalers are: Unit selling price Unit variable costs Current paste product $5.00 $1.50 New gel product $6.50 $3.25 BriteSmile expects to sell 2 million units of the new gel product in the first year after introduction, but it estimates that only 30% of those sales will come from buyers who do not already purchase the company's paste product (that is, new customers). BriteSmile estimates that it would sell 3 million units of the current paste product if it did not introduce the gel. If the fixed costs of launching the new gel product will be $300,000 during the first year, should BriteSmile add the new gel product to its line? Why or why not?
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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Transcribed Image Text:3.3 BriteSmile brand of teeth whitening products is considering adding a modified ver-
sion of the product-a gel product in addition to its regular paste product. Variable
costs and prices to wholesalers are:
Unit selling price
Unit variable costs
Current paste product
$5.00
$1.50
New gel product
$6.50
$3.25
BriteSmile expects to sell 2 million units of the new gel product in the first year after
introduction, but it estimates that only 30% of those sales will come from buyers
who do not already purchase the company's paste product (that is, new customers).
BriteSmile estimates that it would sell 3 million units of the current paste product if
it did not introduce the gel. If the fixed costs of launching the new gel product will be
$300,000 during the first year, should BriteSmile add the new gel product to its line?
Why or why not?
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