1. Robert Johnson, manager of a Kentucky Fried Chicken franchise, is thinking of introducing barbecued chicken in the product line. Its profitability will be based on the fact that the barbecue sauce will cover up the lack of freshness in leftover chicken. He is thinking of pricing the barbecued chicken at $5 a bucket for 24 pieces. His cost for the same chicken is $3. His fixed cost assignable to the barbecuing operation is $1,500. He plans to spend $400 per period in promoting the new product. Using highly sophisticated regression analysis, he has determined the demand function is:

Q = 1250 P M

He estimates that his profit per period will be:

2. XYZ Company has a new product and wants to set a price so that it breaks even at a volume of 22,000 units, the expected sales volume in the first year. With fixed costs of $374,000 and total delivered variable cost of $14.00 per unit, what should the retail price be?

3. The XYZ Company has just gathered estimates for making a business analysis of a new product. Variable costs are constant at $5 a unit; additional plants will be obtained at a cost of $28,000 and depreciated over four years; the new product will be charged $14,000 a year for its share of general overhead; the marketing program calls for an annual advertising expenditure of $15,000 on advertising, $20,000 on distribution, and a price of $9. The firm will have to be able to sell how many units to break even.

4. Outline a marketing planning model. Discuss at least 10 key components:
5. Outline a product life cycle.
A. Identify stages
B. Discuss at least 8 variable components
6. The leading manufacturer of a food flavor intensifier has recently watched its market share slip from 100% to 85%. Its declining share is due to its insistence on maintaining a high price in fare of competition who has introduced the same product for substantially