To answer the following questions, refer to Appendix 2. . A consumer purchases a computer for $800 from a retailer. If the retailer’s markup is 30 percent and the wholesaler’s markup is 10 percent, both based on their respective selling prices, at what price does the manufacturer sell the product to the wholesaler? (CABS: Communication; Analytical Reasoning) NAS. The manufacturer sells the product to the wholesaler at $ 480. 2. If the unit variable cost for each computer Is $350 and the manufacturer has fixed costs totaling $2 million, how many computers must this manufacturer sell to break even?
How many must it sell to realize a profit of $50 million? CABS: Communication; Analytical Total cost: fixed cost + variable cost Chapter Pizza Hut Restaurants of all kinds have scrambled to keep customers coming in during recent difficult economic times. Pizza Hut is in an unusual spot. It Isn’t exactly fast food, but it isn’t quite full-service fare either. Pizza Hut has never been perceived as being on the low end of pizza prices. As the economy sagged, all these factors cooled down business for the red-roofed purveyor of pies.
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So Pizza Hut did what many companies did. It cut prices. At first, it shocked the pizza category with its “SIS any” promotion-?? NY pizza, any size, any crust, any toppings, for just $10. Customers really responded to the limited time offer. But as soon as the price deal ended, Pizza Hut’s incremental promotional revenues disappeared. So the company has made more permanent adjustments to the new frugality reality. To increase customer loyalty, it has introduced everyday low prices.
Most medium pizzas cost $8, most large pizzas cost $10, and most specialty pizzas cost $12; these price cuts represent up to 50 percent reductions from previous pricing. Under this new pricing, Pizza Hut expects that revenues will increase significantly. But the new pricing mechanism will require some time before It proves Itself. 1 . What are the implications of Pizza Hut’s big price cuts for its brand image? Which provides full service with the great taste to their customers.
When pizza hut’s big prize cuts came it was very difficult for the pizza hut to maintain its brand image as it might got thought by the customers that pizza hut have reduce their quality etc but in the result this promotion very quickly increased the revenue which was very profitable for the pizza hut. 2. Can customer loyalty be generated through low prices? Customer loyalty can be generated into many ways by providing the best quality at the reasonable price and in good quantity. Different sectors have different ways of customer loyalty.