BUSS 517 Managerial Economics. PBL No. 2 25 November, 2002. Problem Based Learning - 2. Members: Group E1 : Chan Tak Kuen, Benedick 02716359G Lau Wai Kei, Patrick 02438750G Wong Yun Wah, Wallace 02409600G Yee Chun Fank, Ben 00433665G Group E2 :
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PBL No. 2
25 November, 2002
Chan Tak Kuen, Benedick 02716359G
Lau Wai Kei, Patrick 02438750G
Wong Yun Wah, Wallace 02409600G
Yee Chun Fank, Ben 00433665G
Chan Kar Sing, Brian 02707989G
Wong Yau Ki, Kitty 02725393G
Lee Siu Ka, Sarah 02708427G
Cheng Ting, Ting 02428884G
“Companies which properly coordinate price and advertising strategies can achieve relatively high profits” (p. 37).
Total dollar sales $5,000,000*
Straight % of sales at 20% $1,000,000
Advertising budget $1,000,000
* According to the amount in error stated in the question
Advertising Elasticity: HIGH
PC Magazine Advertising
Personal Selling – Exhibition
- Rent a 9 sq. meter’s booth
Current price is about $35,000
- Other Miss. expenses: $15,000
$35,000 + 15,000 = $50,000
Total cost: = $183,000
Davies, Howard & Lam, Pun-lee. (2001). Managerial economics: An analysis of business issues. Great Britain: Financial Times Prentice Hall.
Farris, Paul W. & Reibstein, David J. (1991). How price, ad expenditures, and profits are linked. How to price your products and services (pp. 37 – 48). Boston, MA: Harvard Business School.
Kotler, Philip. (2000). Marketing management: Analysis, planning, implementation, and control. Upper Saddle River, NJ: Prentice-Hall.
Nagle, Thomas T. & Holden, Reed K. (1995). The strategy and tactics of pricing: guide to profitable decision making. Englewood Cliffs, NJ: Prentice-Hall.
Pride, William M. & Ferrell, O. C. (1997). Marketing: Concepts and strategies. Boston, MA: Houghton Mifflin.
O’Guinn, Thomas, Allen, Chris & Semenik, Richard J. (2002). Advertising and integrated brand promotion. Cincinnati: OH: South-Western.