Variblo sells its hairdryers to independent hair salons, who typically retail them to their own customers at a markup of about 33%.  Variblo total fixed costs are currently about $500,000 per year, including an annual promotion budget of $90,000, and unit variable costs of $50.  The factory price to salons is $89 each.  In its first year in business, last year, Variblo sold 25,000 units.  In an effort to increase market share, Variblo is considering a sales promotion in which the next 1,000 units would cost Variblo $15,600.  Should Variblo go ahead with the sales promotion campaign?  Consider qualitative as well as quantitative issues.  Your analysis is to use only the above information and commonly known information about the current marketing environment; you are not to conduct additional research.

As the product manager for the Variblo hair dryer line, write a memo to the vice president of marketing to recommend whether or not you should move ahead with this sales promotion.  Your memo must include the following format, not necessarily with any sort of headings:

1. objectives of this assessment
   (aka problem statement)

2. facts and assumptions that will be used in analysis
   (aka situation analysis)

3. discussion/ assessment of alternative strategies
   (aka alternatives)

4. discussion of the conclusions
   (aka recommendation and implications)