Pepita Disco PPM: Margins and Elasticity

Kellogg School of Management Cases ◽

10.1108/case.kellogg.2016.000259 ◽

2017 ◽

pp. 1-4

Author(s):

Julie Hennessy ◽

Evan Meagher

Keyword(s):

Market Share ◽

Price Elasticity ◽

Status Quo ◽

List Type ◽

Volume Changes ◽

Product Cost ◽

Dog Food ◽

The Status ◽

Net Margin

This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts.Carolina Araujo had recently taken control of her family's business, Pepita Disco PPM, Uruguay's second-largest producer of beef-based dog food, treats, and toys. While she respected the company's nearly eighty-year history, Carolina felt that Pepita Disco had grown complacent with its market share and was basically preserving the status quo. Her plan was to re-energize the employee base and grow Pepita Disco's business faster than the overall market.This exercise poses a fictional problem about a company's efforts to predict the impacts of price, product cost, and spending moves on profitability.After completing the exercise, students should be able to: Calculate and explain changes in net margin Calculate price and volume changes for a given price elasticity

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Markets: Preserving Funeral Markets with Ready-to-Embalm Laws

The Journal of Economic Perspectives ◽

10.1257/jep.21.4.201 ◽

2007 ◽

Vol 21 (4) ◽

pp. 201-216 ◽

Cited By ~ 14

Author(s):

David E Harrington

Keyword(s):

Twentieth Century ◽

Empirical Evidence ◽

Market Share ◽

Status Quo ◽

Retail Price ◽

Funeral Directors ◽

Funeral Service ◽

The Status ◽

Funeral Homes ◽

The Cost

Thirty-nine states currently have ready-to-embalm laws, which typically require that all firms selling any type of funeral service (even those specializing in cremations) have embalming preparation rooms and all funeral directors be trained as embalmers. Ready-to-embalm laws are designed to preserve the status-quo in funeral markets, thereby protecting currently licensed funeral directors from the ravages of competition. These laws attempt to preserve funeral markets as they existed in the mid-twentieth century, markets that centered on traditional funerals sold by small, full-service funeral homes. The economic chemicals needed to preserve the status quo are harsh, leading to higher funeral prices and often poorer-quality services. The empirical evidence suggests that these laws reduce the cremation rate, the market share of Internet casket retailers, the penetration of national chains, and the number of funeral directors who are immigrants. They also appear to substantially increase the retail price of direct cremations and the cost of traditional funerals. Commissions in several states have recently recommended repealing ready-to-embalm laws, arguing that they are anticompetitive. The evidence presented in this paper should make their recommendations harder to ignore.

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