Jun 222012
 

In this exercise, you are required to review the top-level financials of a small chain of hamburger stores and suggest improvements to their marketing mix. This activity should provide an introduction of how modifications to a firm’s marketing mix can impact business performance.

So let’s help Fat Frank’s Burgers make more money!

 

ACTIVITY/TASK

Frank owns three hamburger shops (Fat Frank’s Burgers) ; his weekly sales, and profit and loss is shown in the table. Although he is making a pre-tax profit of $1,500 per week, he still believes that there is room for profit improvement. He has approached you to give him some advice on how to improve his marketing in order to improve his profits.

Weekly Figures

SHOP 1

SHOP 2

SHOP 3

TOTAL

Sales of Burgers@ $2 each

$4,000

$2,000

$6,000

$12,000

Cost of Burgers@ $1 each

$2,000

$1,000

$3,000

$6,000

Burger Profit

$2,000

$1,000

$3,000

$6,000

Sales of Drinks@ $1 each

$2,000

$1,000

$3,000

$6,000

Cost of Drinks@ 50c each

$1,000

$500

$1,500

$3,000

Drink Profit

$1,000

$500

$1,500

$3,000

GROSS PROFIT

$3,000

$1,500

$4,500

$9,000

Rent

$500

$500

$1,000

$2,000

Advertising

$500

$1,000

$0

$1,500

Staff

$1,000

$1,000

$2,000

$4,000

PRE-TAX PROFIT

$1,000

 Loss

($1,000)

$1,500

$1,500

 

QUESTIONS

  1. What changes would you make to Frank’s operations in order to improve profitability of the chain?
  2. Which of the 4Ps (or 7Ps) did you consider in question 1? Which aspects of the marketing mix do you think would have the most significant impact on profitability?
  3. Do other students (or groups) in the class have similar or different ideas for Frank? Could different approaches work, or is there one best solution?

 

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