Potato chips manufacturer Snack Brands Australia (SBA) sells premium potato chips in different flavours under the brand name “Kettle”.

business

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Potato chips manufacturer Snack Brands Australia (SBA) sells premium potato chips in different flavours under the brand name “Kettle”. SBA aims to obtain 25% market share in the potato chips category, which is currently dominated by larger players such as Smith’s and Thins. SBA thus manages to pursue an aggressive growth strategy and plans to extensively use price promotions. You are hired as its marketing consultant to assess 4 different price promotion strategies and identify the optimal strategy. Details of these strategies are given in the below table. Regular (pre-promotion) price of Kettle potato chips is $4.5 and its regular contribution (margin) is $3. The company also has to cover any additional cost that the retailer will incur in running the promotion

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