Company: Five Guys Burger

Country: Germany

The objective of this submission is to set the base for creating financial projections for the company by looking at pricing and costs. Looking towards profitability breakeven for company will also be derived.

Note: Once marked, the comments offered and the suggestions made should be in some fashion be incorporated into the final report.

The three sections to include in this submission are:

- Pricing Strategy

- Costs

- Breakeven Analysis

Pricing Strategy

Describe and justify in terms of its applicability to the target market. The following should be addressed as a minimum:

• Present selling prices for products being sold,

• Identify pricing strategy have selected. Is it a penetration strategy, skimming strategy, static pricing, flexible pricing, or market maintenance pricing? Explain your rationale.

• Explain how the selected prices are appropriate for the target market,

• Compare prices selected to competitor prices. Explain positioning.

Costs

This section identifies all the costs that the company will incur in order to execute the marketing strategy selected. Justify the figures you are presenting. As a minimum, it will cover the following;

• variable costs that change with fluctuations in units sold, such as product costs, sales commissions, direct labour, freight, materials, and fuel;

• fixed costs that don’t change with the volume of units sold, such as rent or lease payments, office salaries, insurance, finance costs, utilities, marketing costs and professional fees

Breakeven Analysis

Using the selling price and the operating expenses outlined above for one of the products the company is selling:

• calculate the contribution margin,

• calculate the breakeven point (in units) and