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Transcript of ECONS PBL3
GROUP MEMBERS DARREN CHENG SAMUEL LIM JOMAIN LIM TEO JING YUN SIDNEY TEO BACKGROUND The beginnings of Charles & Keith can be traced back to the early 90’s, when Charles was just 16 years old. GROUP MEMBERS DARREN CHENG TEO JING YUN SIDNEY TEO JOMAIN LIM SAMUEL LIM BACKGROUND The beginnings of Charles & Keith can be traced back to the early 90’s, when Charles was just 16 years old. Together with his younger brother Keith, he opened his first store in Amara Shopping Centre , in 1996. Over the next 10 years, the brand grew extensively, both in terms of popularity and reach. In 2007, Charles & Keith introduced the Charles & Keith Signature Label, an exclusive line specially targeted at fashion conscious ladies with fine taste.
Today, the brand operates 23 stores in Singapore and has a global network that covers more than 165 stores across 25 countries.
MANDATE TO DEVELOP MARKETING
STRATEGIES TO BOOST TOTAL
REVENUE TARGET MARKET :
YOUNG AND TRENDY METHODOLOGY 3 1 2 1 2 Initial Quantity Demanded : Q1 Initial equilibrium price : P1 Total revenue : 0P1E1Q1 When demand shifts to D2 New equilibrium price : P2 New equilibrium quantity : Q2 New total revenue :0P2E2Q2 Increase! Increase Price Inelasticity of Demand Compliment Goods Price inelasticity increases as
availability of close substitutes decreases Assume supply is constant 1 1 2 Luxury Goods Ep > 1 DEMAND FACTORS Increase in income Taste and Preference Changes in trends Lifestyle Growing economy since the 1970s
Social Hierachy Marketing Strategies Holding sales Great Singapore Sale Boost sales revenue Lowering Marginal Cost of Production Money diverted to advertisements Restructuring Employ only efficient workers Performance based bonuses Raise awareness of this company Endorsements by popular artistes People will imitate their idols Accountability to Shareholders Increase total sales revenue will increase competition Charles and Keith to achieve inelastic demand Total sales revenue will increase when price of product increases Shareholders will continue to invest in the company Examples of success in
Boosting Sales Revenue SPINN Private Limited, a video production company, wanted to internationalise. The company needed a consultancy firm with strong knowledge, experience, and track record to couple strategy formulation with a market feasibility study, which they felt would help them understand the market in an educated and systematic manner. Thus, they engaged BDO Consultants to help them.
CONCLUSION Marketing Strategies Sales Lowering Marginal
Cost of Production Advertisements Consumers have increased
marginal utility Sales will cause demand curve to shift from D1 to D2 as people will be more willing to purchase products from Charles and Keith during a sale. Therefore, this increase in demand will cause an upward pressure on price which shifts the equilibrium from E1 to E2, assuming that supply remains constant. At E2, the equilibrium price increases from P1 to P2.
Since Total Revenue (TR) = Price X Quantity demanded, total revenue would increase from 0P1E1Q1 ¬to 0P2E2Q2. ¬Therefore, a sale would cause increase in total revenue.
Reorganisation of Company downsizing
introduction of more flexible employment practices
hiring cheap labour performance based bonuses Decrease Price Elasticity of Goods In reiteration, a myriad of marketing techniques integrated into a single marketing strategy will be the most effective method to boost total sales revenue. These techniques include sales, reorganization of the Charles and Keith Company, and advertisement of their products. Increasing the demand for CK goods by releasing a CK signature label or increasing price inelasticity of demand by creating compliment goods will result in the price inelasticity of CK goods, so that the price of the goods will not change so easily, hence boosting total sales revenue.
THE END. Questions?