Planes, Boats & Planograms Howard Bergman. The Power of the Customer There is only one boss. The...
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Transcript of Planes, Boats & Planograms Howard Bergman. The Power of the Customer There is only one boss. The...
Planes, Boats & PlanogramsHoward Bergman
The Power of the Customer
There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
Sam Walton
Planes
Cost of a Flight$58,050
• Fixed - $46,050– Jets– Airport facilities– Customer service– Mechanics– Pilots– Flight attendants– Baggage handlers
• Variable - $12,000– Fuel– Food
Total Cost = $58,050 Variable Cost = $12,000Total Revenue = $12,800
Ave Cost/passenger (16) = $3628Loss/Profit = $45,250
$800/seat4 rows @
$3,200/row = $12,800
$460/seat11 rows@
$2760/row =$30,360
Total Cost = $58,050 Variable Cost = $12,000Total Revenue = $27,800
Ave Cost/passenger (46) = $1261Loss/Profit = $30,250
Total Cost = $58,050 Variable Cost = $12,000Total Revenue = $58,160
Ave Cost/passenger (112) = $518Loss/Profit = $110
$320/seat10 rows
@$1,980/row =$19,800
Total Cost = $58,050 Variable Cost = $12,000Total Revenue = $77,960
Ave Cost/passenger (172) = $337Loss/Profit = $19,910
$500/seat5 rows @
$3,000/row = $15,000
$300/seat15 rows @
$1,800/row = $27,000
Total Cost = $48,000 Variable Cost = $12,000Total Revenue = $27,000
Ave Cost/passenger (90) = $555Loss/Profit = $21,000
Low Cost Airlines
$175/seat15 rows
@$1050/row =$15,750
$800/seat4 rows @
$3,200/row = $12,800
$500/seat5 rows @
$3,000/row = $15,000
$460/seat6 rows@
$2760/row =$16,560
Total Cost = $58,050 Variable Cost = $12,000Total Revenue = $44,360
Ave Cost/passenger (82) = $708Loss/Profit = $13,690
Total Cost = $58,050 Variable Cost = $12,000Total Revenue = $60,110
Ave Cost/passenger (172) = $337Loss/Profit = $2,060
BOATS
= Our engines
Cost = $80Price = $100Total Profit =
$100
$20
$20
$20
$20
$20
= Our engines
Cost = $80Price = $95
Total Profit = $75
$15
$15
$15
$15
$15 Total Profit = $90
$15
PLANOGRAMS
Maximize Economic Profit
What does a Retailer Need?
Increase Margins
Increase Turns
Increase other sources of income
Decrease cost of capital employed
Decrease cost of operations
Store LayoutY
ard
FoodPharmacy Houseware
Clothing
Planogram
Assortment: What to carry
Pricing: What retail price
Promotion: How to display it
Placement: Where to put it
Supply: How much, how often
Assortment:Variety vs Duplication
1 5 10 15 20 25 30 35 40 50 70
% of Items
0%
20%
40%
60%
80%
100%% of Dollar Sales
Are these items worth keeping?
How many items ? How many sizes ? Will the consumer
switch to another brand ?
$2.00$3.00$3.15 - $3.00 =$0.15
$2.20 -$2.00 =$0.20
$0.15 X 100/month =$15.00/month $0.20 X 50 month =
$10.00/month
$25.00/month
$0.15 X 150/month =$22.50/month
$0.20 X 25 month = $5.00/month
$27.50/month
Maximize Economic Profit
What does a Retailer Need?
Increase Margins
Increase Turns
Increase other sources of income
Decrease cost of capital employed
Decrease cost of operations
Yar
d
FoodPharmacy Houseware
Clothing
The Power of the Customer
There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
Sam Walton
The End
Thank You
$3628
$1261
$518
$337
1721124616
$800
$500$460
$350
MPLS Las Vegas
6:00 pm 7:00 pm
8:00 am11:00 am
8:00 pm11:00 pm
6:00 am 7 am
2 Full FlightsProfit = $42,000
2 Additional Flights 1/2 full
Variable Cost = $24,000Revenue = $44,360
Loss/Profit = $20,300Total Profit = $62,300