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Easy Profitability

Paper Pricing Predicament

#Retail #Consumer Packaged Goods (CPG)
ProHub Comment

This case tests the candidate's ability to build a structured pricing framework using market positioning analysis combined with cost-plus markup calculations. The case progresses logically from market landscape assessment (Exhibit #1) to cost structure analysis (Exhibit #2), requiring candidates to identify the optimal market positioning and calculate pricing based on supplier costs and industry standards. The evaluation criteria emphasize industry-specific thinking and the ability to recognize missing analytical pieces.

Estimated Time 15 minutes
Difficulty Easy
Source Duke
50 / 100
Complete Foods, a leading supermarket prominent across the U.S., is planning to release a private label line of paper towels. They currently sell fresh and shelf-stable grocery products as well as some common household items such as hand soap and kitchen supplies. Some of these products are brand names and some are private label. The CMO has asked your team to think through the pricing strategy for the new line.

Clarifying Information

  1. Complete Foods has 50 stores across 10 metropolitan areas, scattered across the United States.
  2. Complete Foods only stocks products that are free from artificial colors, flavors, and preservatives.
  3. Last year, Complete Foods brought in revenue of $200M.
  4. Compare Foods already produces private label grocery products but no private label household goods.
  5. Private label means products that are produced by the same company that is selling the products. These paper towels will be produced by Complete Foods and only sold in Complete Foods stores.