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| Topic: |
Business
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| Number of pages / Number of words: |
6 / 1559 |
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It is anticipated with the lower price that it will be easier to sell many more of the BIGFOOT pizzas. However, with price being set so low, it is necessary to understand that Pizza Hut will need to sell 1.63 BIGFOOT Pizzas to every one "Other Pizza." This is significant because it will be difficult to achieve a large enough sales volume to compensate for the difference in margin as well as the lost sales...
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Exhibit G shows that the difference in gross margin of the two products is $2.73. To compensate for this difference, it will be necessary to penetrate a significant portion of Little Caesars' "love group." History has shown that capturing the hearts of any competitors "love group" is extremely difficulty if not impossible...
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