SCENARIOS Digital Cookware

question 166

Multiple Choice

SCENARIOS
Digital Cookware
Digital Cookware has developed a new kind of skillet that should make cooking easier for many non-chefs.The skillet has a display on its handle that beeps to alert the cook when the pan's target temperature is reached.The skillet with the aid of an accompanying cookbook will take much of the guesswork out of cooking.Digital Cookware is a small company,and it has invested considerable money in developing this new technology,which it eventually hopes to use in an entire line of pots and pans.It has run some small ads for the new skillet in cooking magazines and been featured on some morning talk shows.It needs a quick infusion of cash to maintain its current operational level and to develop the rest of the cookware line.Digital Cookware is considering some kind of sales promotion.
-Refer to Digital Cookware.The company's first task is to define its exact sales promotion objective.If the goal of the company is to persuade customers to buy its brand of skillet as opposed to one of the skillets made by its competition,it should:

• A) use on-pack coupons
• B) run a cooking contest that has contestants enter recipes that use the new skillet
• C) give away samples to prospective customers
• D) use bonus packs
• E) institute a loyalty marketing program

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Definitions:

Variable Costs

Expenses that fluctuate in direct proportion to the quantity of output or sales, including items like labor and materials.

Sensitivity Analysis

A method employed to ascertain the effects of varying an independent variable on a specific dependent variable, given certain presuppositions.

Fixed Costs

Expenses that remain unchanged regardless of the amount of goods produced or sold, staying fixed amidst variations in business operations.

Sensitivity Analysis

is a technique used to determine how different values of an independent variable will affect a particular dependent variable under a given set of assumptions.