Question

2. How might consumers respond to a brand with two SKUs, a medium-sized economy toothpaste priced at $3.75 and a large healthy product at $4.00?

			SKU #1			SKU #2			SKU #3
	MSRP			9			12			7
Average Discount			20%			32%			26%
Allowance %			7%			9%			6%
Unit COGS			2.25			2.47			1.89
Shipping / Tariffs			0.33			0.36			0.37
MSP
Gross Margin
Gross Margin %

Answer 1

Answer:

		SKU #1	SKU #2	SKU #3
1	MSP:
	MSRP	9	12	7
	Less Average Discount:	1.8	3.84	1.82
	MSP	7.2	8.16	5.18
2	Gross Margin:
	MSP	7.2	8.16	5.18
	Less Allowance:	0.504	0.7344	0.3108
		6.696	7.4256	4.8692
	Less: Unit COGS	2.25	2.47	1.89
	Less: Shipping/ Tarriffs	0.33	0.36	0.37
	Goss Margin	4.116	4.5956	2.6092
3	Gross Margin %:
	Gross Margin	4.116	4.5956	2.6092
	÷ MSP	7.2	8.16	5.18
		0.571667	0.563186	0.503707
	× 100	57.17%	56.32%	50.37%