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    The document summarizes calculations from Chen, McMillan, and a potential consumer-oriented MDF test at Staples comparing different pricing strategies for Clique pens. Chen calculates a 5% sales increase and higher profit margins if consumer pricing is used. McMillan calculates a 9% sales decrease and lower profits with consumer pricing. With a retail-oriented strategy, McMillan estimates a 0.4% increase in market share. The Staples test compares regular pricing to a 10% discount passed to consumers, estimating a 7% sales increase for Clique but reduced profits for both Staples and Clique.

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    The document summarizes calculations from Chen, McMillan, and a potential consumer-oriented MDF test at Staples comparing different pricing strategies for Clique pens. Chen calculates a 5% sales increase and higher profit margins if consumer pricing is used. McMillan calculates a 9% sales decrease and lower profits with consumer pricing. With a retail-oriented strategy, McMillan estimates a 0.4% increase in market share. The Staples test compares regular pricing to a 10% discount passed to consumers, estimating a 7% sales increase for Clique but reduced profits for both Staples and Clique.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    20 views5 pages

    King Baba

    Uploaded by

    Dina Rizkia Rachmah
    The document summarizes calculations from Chen, McMillan, and a potential consumer-oriented MDF test at Staples comparing different pricing strategies for Clique pens. Chen calculates a 5% sales increase and higher profit margins if consumer pricing is used. McMillan calculates a 9% sales decrease and lower profits with consumer pricing. With a retail-oriented strategy, McMillan estimates a 0.4% increase in market share. The Staples test compares regular pricing to a 10% discount passed to consumers, estimating a 7% sales increase for Clique but reduced profits for both Staples and Clique.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    King Baba Members NIM

    M. Akbar Ridho Hilal 29120502


    Lutfi Kamili JuliandrIbrahim 29120406
    Ricky Hariyanto 29120628
    Yasyifa Dian Urfina 29120478
    Talitha Assyura 29120506
    Anton Herutomo 39020905
    Clique Pen Debate, Marketing vs Sales View
    (Case page 6-7)

    Chen’s calculation of sales and profit increase if consumer-oriented MDF is employed:


    5% increase in retail sales - assume 5% increase in Clique sales

    Gross Profit Margin from 36% to 38%


    Gross Profit

    McMillan’s calculations of sales and profit decreases if consumer-oriented MDF is employed:


    9% sales decrease

    Gross Profit Margin from 36% to 38%


    Gross Profit

    McMillan’s calculation of sales and profit increases if retail-oriented MDF is employed:


    Market share increase of .4%

    Overall market (Page 3)


    2013 Sales
    2013 Market Share
    Market share estimate with RO MDF  (3.4% + 0.4%) x 5.5 billion
    Gross Profit change of +/- 3.5%
    ed MDF is employed:
    5% increase, 2014
    2013 Sales in Millions estimation
    187 196.35 5% increase
    38%
    74.61

    r-oriented MDF is employed:


    9% decrease, 2014
    2013 Sales in Millions estimation
    187 170.17 9% decrease
    36% 38%
    67.32 64.66

    ed MDF is employed:

    5.5 billions $5,500,000,000


    187 millions $187,000,000
    3.4%
    $209,000,000
    -4% 60.775 or 73.865
    Clique Pen Debate, Staples Test
    Consumer-Oriented MDF Test at Staples versus Present Pricing with Discount Structure
    (Case page 7)

    Staples regular retail price and present discount structure from Clique:
    Retail selling Test retail selling
    Retail selling price $1.97
    Wholesale price from Clique $0.94
    Discounts and allowances
    Volume discount 5.50% 0.055
    Warehaouse discount 3.00% 0.03
    Stocking allowance 1.50% 0.015
    Total 10.00% 0.1
    Net wholesale price $0.85

    Staples normal gross profit 1.12


    Staples normal gross profit margin 0.57

    Test retail selling price $1.78


    Wholesale price from Clique 10% off $0.85

    Staples gross profit from test pricing $0.93


    Staples gross profit margin from test 47.53%

    StapStaples test passing a 10% discount through to the consumer:


    less loss of gross profit 10% $0.20
    Staple gross profit loss to normal -$0.19 17%

    Clique’s variable cost 0.46


    Clique gross profit after 10% discount 42.94%
    Clique’s sales increase 0.07 7%

    If Staples has no unit increase, then Clique has to provide additional discount .12 to .19
    Reducing Clique selling price to .85 to .66
    Clique gross profit would then be .66 to .46, GPM around 21%
    Test retail selling
    $1.78
    $0.85

    $0.77

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