Pricing for the
Future
PRESENTED BY SERENA SUN, DAREN MA, LISA TO
ROADMAP
Objective: Improve firm value through operation efficiency improvement and strategic product positioning
Key Elements
Considerations
Opportunities
1.
Industry Growth
1.
Product
1.
Cost Saving Analysis
2.
Competition
2.
Distribution
2.
Risk Analysis
3.
Supply Chains
3.
Packaging
3.
Financial Impact
4.
Financial Conditions
4.
Customer Services
A COUPLE OF SQUARES INC.
COST OPTIMIZATION
Objective: To Reduce Cost
$8.00
Cost of Product
109.09
Labor to package
6.07
$6.00
Foam
0.86
$5.00
Bubble
0.83
$4.00
Total Cost saving
16.88
$3.00
Updated Cost
92.21
$2.00
Selling Price
120
$1.00
Margin
15%
$7.00
$-
A COUPLE OF SQUARES INC.
Labor to package
Foam
Bubble
HEDGING OPPORTUNITIES
Objective: To avoid risk of food price fluctuation by hedging
Wheat Price :
• Wheat Price Rose over 120% from the summer of 2010
• Hedging with Commodity
Futures or Options reduce the impact of rising raw material
400
350
300
250
200
150
100
50
0
A COUPLE OF SQUARES INC.
2010 - 2013
RISK
• Fluctuation in the Underlying Commodity Price and
Currency
• Timely Delivery
• Cross-Border Regulations
• Overall Economic Condition
A COUPLE OF SQUARES INC.
NEW DISTRIBUTION CHANNEL
Objective: To find new channel to boost sales
Expand into New Chains
• High Number of Outlets
• Premium Coffee Shop
Chains
Cookie
Stores Sale/Day
Wholesale Unit
Daily
COGS price
Contribution Revenue
Daily
Profit
Annual
Revenue
Annual
Profit
Daily # of
Cookies
Statbucks 12,000
5 $1.75
1.8
3%
$10,800 $3,000 $38,880,000 $1,080,000
60,000
Tim
Hortons
4,300
3 $1.75
1.86
6%
$23,994 $1,419 $8,637,840
$510,840
12,900
21
10 $1.75
1.93
9%
$13,608
210
Aroma
$405
$38
$145,908
PRICING
Objective: To increase profit margin through new pricing strategy without impacting existing customer base
Design Cost
Complexity Cost
Overhead of drying time
Dough wastage
A