Pepita Disco PPM: Margins and Elasticity

This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts. 

Carolina Araujo had recently taken control of her family's business, Pepita Disco PPM, Uruguay's second-largest producer of beef-based dog food, treats, and toys. While she respected the company's nearly eighty-year history, Carolina felt that Pepita Disco had grown complacent with its market share and was basically preserving the status quo. Her plan was to re-energize the employee base and grow Pepita Disco's business faster than the overall market. 

This exercise poses a fictional problem about a company's efforts to predict the impacts of price, product cost, and spending moves on profitability.