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ankoles [38]
3 years ago
14

Clothing retailer Lululemon often has displays in their front window that try to raise awareness on specific issues such as the

dangers of HIV/AIDS. Which form of institutional advertising is?
Business
1 answer:
alukav5142 [94]3 years ago
3 0

Answer:

Advocacy advertising.

Explanation:

Marketing can be defined as the process of developing promotional techniques and sales strategies by a firm, so as to enhance the availability of goods and services to meet the needs of the end users or consumers through advertising and market research. Thus, it comprises of all the activities such as, identifying, anticipating set of medium and processes for creating, promoting, delivering, and exchanging goods and services that has value for customers.

Advertisement refers to the promotional multimedia messages designed and developed to make the products or services of a company known to its customers and potential customers.

In this scenario, clothing retailer Lululemon often display items or products in their front window so as to help raise awareness on specific societal issues such as the dangers of HIV/AIDS. Thus, the form of institutional advertising used by Lululemon is an advocacy advertising.

An advocacy advertising can be defined as a form of advertising that is typically focused on advancing the interests of a cause, group or societal issue in order to communicate a viewpoint and raise awareness among the general public.

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Answer:

Contribution per unit = Selling price - Unit variable cost

                                     = $70 - $10 = $60

Break-even sales in units = <u>Fixed cost</u>

                                             Contribution per unit

                                         = <u>$1,980,000</u>

                                                   $60

                                        = 33,000 units

If fixed cost reduced by $49,500, new fixed cost will be $1.930,500

33,000     = <u>$1,930,500</u>

                      $70 - VC

33,000(70 - VC) = $1,930,500

2,310,000 - 33,000VC  = $1,930,500

2,310,000 - $1,930,500 = 33,000VC                                          

379,500  = 33,000VC

<u>379,500</u>  = VC

33,000

VC = $11.50

Increase in variable expenses per unit

= $11.50 - $10 = $1.50

Explanation:

In this case, we need to determine the break-even point in units, which is fixed cost divided by variable expenses per unit. If total fixed expenses reduced by $49,500, the new total fixed expenses will be $1,930,500. Then, we will equate the break-even point in units to the new fixed cost divided by contribution per unit, which is selling price minus variable expenses per unit. Since break-even point in units, new fixed cost and selling price were known with the exception of variable cost, variable cost becomes the subject of the formula. The old variable expenses will be deducted from the new variable expenses so as to obtain increase in variable expenses per unit.

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