Campbell+says+sales,+profit+dip;+cuts+guidance+-+JungSoo

__Title of the extract (article)__: Campbell says, profit dips; cuts guidance

__Source of the extract:__ []

__Date of the extract__: Feb 19, 2011

__Brief explanation of the article:__ - The article is about Campbell losing its profit even with promotion of its product. Though it was expected that deep discount of its product would lead to a temporary decline, now even the outlook for the rest of the year seems to be cloudy also. Previously, the company said it expected earnings for the year to be between $2.52 and $2.57 for the full year, but the revised guidance is for a profit between $2.40 and $2.45 per share. It shows that Campbell lowered its full-year earnings and revenue guidance for the second time in about three months. It seems that its promotion of the product did not work well because of too many competitors present in the market so the company decides to do more advertising online, but go lighter on in store price-promotion. This is because quantity demanded for Campbell soup has not increased as much, considering how much Campbell cuts its price down.

__List and define any and all vocabulary terms:__ · Revenue: The total amount received by firms from the sale of a product, before the deduction of taxes or any other costs. The price multiplied by the quantity sold. TR = P*Q · Expectation: What people think about the future · Promotion: Sometimes referred to as the promotion mix, the variable of the marketing mix focusing on 4 elements: advertising, sales promotion, personal selling, and public relations. Promotion is that part of the mix that communicates the company, brand, and availability of the product to the target market. · Competitor: Rival firms which produce similar products in the same market · Profit: Total revenue – cost of production  · Inflation: Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole. __ Diagram: __ __ Evaluation: __ - I think Campbell made a wrong choice on spending too much on promoting its products. It should have considered all the factors such as competitors and expectations that could have hampered the quantity demanded of a product to increase. Since already too much expenditure has been made on promotion, Campbell has to use this strength at a maximum level to increase the quantity demanded. For example, a CEO of Campbell said that he would focus more on advertisement of Campbell to increase its market standing. To raise people’s awareness of Campbell’s product, Campbell should either advertise how its product is more environmentally friendly than other rival products or employ a famous actor/actress to advertise the product. This way, costumer may get more aware of its product’s brand and cheap price, thus increasing quantity demanded of the product.