Without re-writing the entire article I assumed Mattel set the limit to help ensure profitability. So here's my question, what is the easiest way to show this rationale in a math formula?Limit one poster per household or organization.
My simple example feels like it is turning into a SAT story problem.
I feel like the idea makes sense, but does it?This seems to be a very strange restriction for a non-contest promotion. Many similar promotions of the day (i.e., mail-away figures) did not have this same restriction. This decision was likely a cost cutting decision. Mattel had likely allotted a certain budget for the promotion. By placing a limit on the number of posters a household could receive, this helped to control the number of poster sent out.
Mattel may have had a complex equation that included all of the fixed and variable costs regarding the promotion. The scenario below is only meant to be a simple example of what Mattel may have been considering with limiting the poster to one per household.
A standard retailer box of 4-packs contained 72 4-packs. Considering that the individual 4-packs sold for approximately $1 each, the wholesale cost for each 4-pack may have been $0.50 to $0.60 (assuming a 40% to 50% markup). Based on these assumptions a case of 4-packs likely cost a retailer approximately $42.
Mattel was willing to mail a poster if 2 4-packs had been purchased. While Mattel would have already earned their money from the wholesaler, the logic suggests that the $1.20 had allowed for enough net income to send out the promotion poster.
$1.20 (wholesale cost + fixed and variable expenses) - $0.50 per poster (promotional costs [printing, shipping, etc.]) = $0.70 Total Net
I'm not suggesting the numbers are perfect, rather close enough to make the example work.
