| Subject | Applied Marketing Management |
Far East Flora has had some success with gifting on special occasions and would like to try a special Valentine’s Day offering in Cold Storage to increase awareness of their offerings. They are looking to launch a floral bouquet with 6 red roses with an attached chocolate box containing 6 heart-shaped chocolates from Fossa Chocolates as a trial for 6 months. This offering is exclusive to Cold Storage during the trial period.
Cold Storage is planning a markup of 25% for the product.
If Far East Flora would like to sell the Valentine’s Day offering at retail for $24.99, determine the following metrics:
- What will Far East Flora’s selling price for the Valentine’s Day offering have to be, assuming the above-stated markup for the retailer?
- How many units will Far East Flora need to sell to break even?
- How many units will Far East Flora need to sell to Cold Storage to earn a target profit of $20,000?
- If Far East Flora achieves the sales volume required to earn the target profit, what will be its profit %?
- Do you think Far East Flora should proceed with this venture? Why or why not?
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