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Moonsnail Soapworks. ... The reputation of Moonsnail Soapworks (MS) is in
jeopardy if the shops continue to sale expire products. ...
Submitted by ekin112 on June 4, 2008
Category: Business
Words: 1267 | Pages: 6
Views: 39
Popularity Rank: 115,059
Average Member Grade: N/A (Add a Comment / Grade this Paper)
Critical Issues
· Jennifer Ridgeway is overworked. She handles almost every aspect of her business. Currently she is considering launching her new product Moon Baby Cream (MBC). But base on the case, neither Marcus Lutterman nor her have any experience in marketing. A lack of a marketing strategy could greatly hinder the success of MBC.
· The retail side of the business is increasing but the warehouse sales are decreasing. She must make a decision to whether continue the wholesale distribution, change the strategy for its operations, or discontinue it altogether.
· The reputation of Moonsnail Soapworks (MS) is in jeopardy if the shops continue to sale expire products. The inventories that are shipped to retailers need to be smaller batches, and an agreement must be worked out on who should sink the monthly shipping cost.
· Fulfill Jennifer’s wishes of: Projecting the income statement for fiscal 2001, projecting sales and contributions if MBC were to drop their prices by 20% ($7.96 retail, $4.80 wholesale), and whether to continue the spring show despite discouraging sales.
Alternatives & Analysis
Base on profits calculated from both the Christmas show and the spring show, Christmas yields a net profit of $10,000 while spring yields a net loss of $500 (Exhibit 1). Although the spring show is a non profitable event, Jennifer must take into consideration that she is building a more consistent client base. A consistent presence in both the shows will build brand awareness for MS’s potential customers and also retain their current ones.
As shown in the exhibit 2, it takes 134 retail units for MBC to break even, but it takes 237 to break even at the wholesale level. This is mainly contributed by the much lower price (Retail $9.95 Wholesale $6). As stated on the case, the projected sales for wholesale in the upcoming year is bleak compare to retail. It is expected to continue a steady decline of 8.9% of revenue....
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