How would you respond to Uriah Porter

BeneMart, a large national retail chain, is nearing its fiscal year-end. It appears that the company is not going to hit its revenue and net income targets. The company’s marketing manager, Ed Mellon, suggests running a promotion selling $50 gift cards for $45. He believes that this would be very popular and would enable the company to meet its targets for revenue and net income. What do you think of this idea?

Please research and explain the reasons Ed believes that by selling the gift cards at $45 would meet the targets for revenue and net income. Provide examples.

 

How would you respond to Uriah Porter

Assuming BeneMart’s fiscal year ends in December this plan could work out to a very good benefit for the company. The holidays are a time where people frankly throw money around with less regard than the normal time. This can also do wonders for a company’s image and expand their customer base by basically giving people $5 worth of product for free. I know from personal experience that having a gift card at the holiday time means I can buy something expensive I have wanted to get for much cheaper because of the card. This also means that I am giving the company a profit even with the $5 free.

How would you respond to Katherine Lindsey

Hello Prof. and Peers,

Benemart, is a large national retail chain, that is nearing its fiscal year-end and the company seems to be having some issues involving its revenue and net income targets. Marketing manager, Ed Mellon suggested running a promotion selling $50 gift cards for $45. He thinks that this would be very popular and would help the company to meet its target for revenue and net income. On the other hand I disagree with Mr. Mellon’s idea. I think that it may help the revenue target but it just might hurt the income net target if the cards don’t sale. I think that it will only work if the cards are sold and used right away. The cards will not be a result of revenue until they are sold and used. If they are not sold and used they are considered a liability. In order for growth you must profit.

References

Kimmel, P. D., Weygandt, J. J. (2016). Survey of Accounting, 1st Edition. [Purdue University Global Bookshelf]. Retrieved from https://purdueuniversityglobal.vitalsource.com/#books/9781119306481/

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