Marketing: An Introduction (12th Edition)
12th Edition
ISBN: 9780133451276
Author: Gary Armstrong, Philip Kotler
Publisher: PEARSON
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Chapter 9, Problem 9.13MA
Summary Introduction
Case summary: Company LV is a luxury fashion and leather goods brand which maintain exclusivity for a brand to raise its price. The company did not wanted to become overexposed and to be very common so it increased its prices by 10% and decreasing its expansion in Country CN. Company LV is the principal supplier to the company's $13.3 billion revenue from its fashion and leather division. The company wanted to support few customers to buy the company's products when the cost is high so that the contribution margin and making the company profitable.
Characters in the case: Company LV.
To Determine: The amount sales can drop while still allowing the company to maintain the total contribution it had when the contribution margin was 40%.
Introduction: Contribution margin can likewise be characterized as the marginal profit on per unit of sale of an item. Low contribution margin are earned in labour-intensive tertiary divisions and high contribution margin are earned in the capital-intensive divisions. Computation of contribution margin enables one to discover the productivity of items.
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