![]() ![]() Options here may range from a high quality, premium product to a lower priced value product. A decision that is essential at the brand level is positioning. However, selling a product that cost $5 to make for $10 will result in a much higher percentage profit, but a much lower absolute margin. If you sell a computer that cost $950 to make for $1,000, you are making only a 5% gross profit. Product profit can be measured in several ways. Profits can be maximized in the short run, or an investment can be made into future earnings. ![]() Several variables come into play in maximizing value. However, when a firm holds several different brands, different marketing and distribution plans may be required for each. Risks can come in many forms, including immediate loss of profit due to lower sales and long term damage to the brand because of a poor product being released or because of distribution through a channel perceived to carry low quality merchandise.īrand level objectives: Ultimately, brand level profit centers are expected to contribute to the overall maximization of the firm’s profits. Risk: In general, firms that attempt riskier ventures-and their stockholders-expect a higher rate of return. Thus, for example, in the retail food market, there are low price supermarkets such as Food 4 Less that provide few if any services, intermediate level markets like Ralph’s, and high-end markets such as Vons’ Pavillion that charge high prices and claim to carry superior merchandise and offer exceptional service. If they do, competition will invariably degenerate into price-there is nothing else that would differentiate the firms. Market balance: It is essential that different firms in the same business not attempt to compete on exactly the same variables. Contacts with suppliers and distributors and others who influence the success of the firm.Running facilities (no amount of money is going to get a new microchip manufacturing plant started tomorrow) and. ![]()
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