Answer Happy

Activity 5: Sales Promotion You are brand manager for a new shampoo brand, Silken. You have been tasked with determining whether you should run a sales promotion or not and have been given the following Information about your customer groups, your regular price as well as the per unit cost. Customer Group Descriptions: Promotion insensitive: will keep buying the same regardless of promotion Promotion sensitives: will switch brands when on sale. On deal only consumers: only purchase the product when a deal is on. Customer groups Sales Promotion insensitive your brand) 200,000 Promotion sensitives your brand) 500,000 Promotion sensitives competitor brand) 300,000 On deal only (512) 100,000 On deal only ($10) 200,000 when both are on sale then on deal consumers are split equally Regular price: $15 Per unit cost $6 a) Should you run a sales promotion at $12 per unit? b) What if your price was decreased to $10 per unit? c) What would happen to your profit if your competitor went on sale but you didn't? d) What would happen to your profit if both you and your competitor both went on sale? What should you do when your competitor goos on sale then?