MINI-CASE Personal Brand Management Impress4Less is a company founded by two b-s

Question

MINI-CASE Personal Brand Management Impress4Less is a company founded by two b-school recent alumni. They both had taken advantage of their school's career placement services, and thought they could offer additional supplemental services and advice They're constructing a website where anyone looking for help in positioning themselves for a new job might go to download templates of resumes, examples of personal brand brief elevator pitches, videos of strong and weak interview answers, and the like. Their plan is to offer some of those basics for free, to get people onto the website But what they're really interested in selling is their consultation time, consisting of feedback on resumes and help with practice interviews They're working with their former school's entrepreneurial club in proposing to launch their online premium service for $50. This past year served as a test market at the b-school. Given the friendly partnership, and as a learn ing opportunity for the students, Impress4Less shared some information on basic cost structures. Their fixed costs on this project were $3,000, and variables costs were $10 per user exchange Currently at the b-school, the situation is as it looks in the figure below (to the left); that is, 200 users purchased their services during the last academic year at the $50 price. But the club members get regular feedback (from classmates) that the $50 price tag seems steep, so they're asking impress4Less for a price cut of 10%, essentially going to the figure at the right. Case Discussion Questions 1. How many users would have to buy at $45 to at least meet last year's profits? 2. Should Impress4Less drop prices further? Could they raise prices above $50? 3. What assumptions are you making? Current price $50 Drop price 10% (to $45) Contribution lost to price cut Contribution Contribution More units, more contribution More variable costs Covering VariableCovering cost $10 variable costs Variable cost $10 variable costs urrent sales 200 units New sales-? units

Explanation / Answer

First Let's calculate the last year's profit.

Last year Cost= Fixed cost+ Variable Cost

=$3000+$10*200= $5000

Sells revenue= $50*200= $10000

So profit = $10000-$5000= $5000

Now the sells vlue will be dropping by 10% so the nes selling price =$45

To get the last years profit

Profit = Sales revenue- Cost= $45*Q-($3000+$10*Q)

$5000= $35Q-$3000

$8000=$35Q

Q= 8000/35= 228.57 nearly 229 units they have to sell to get the last year's profit

b) Yes, in my opinion, they can drop the price to gain the popularity and in terms to gain profit only a little amount of increase in sales volume(29) gives them the same profit. The initial decrease in sales price will increase the brand's name and people will follow the brand. Further, in the future, they can increase the price in a slow manner to increase the profit.

c) My assumptions for the increase in profit is that they will maintain the quality and the service delivery perfect so that the number of students will avail the program will increase. This will catalyze the sales figure and will help them to build a larger brand.

please comment if any doubt

rate me

thanks  

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.