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Starter: Prairie Pet Foods: should it raise prices 10 percent?

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Prairie Pet Foods sells premium dog food in Canada. It is considering a 10 percent price rise. The exhibit shows results from test markets. Should it go ahead?

Format note: Difficulty: Starter. Format: interviewer-led, with an exhibit. Industry: Consumer goods. Region: Canada. Interview length: about 25 minutes. The company is fictional and all figures are illustrative.

2. Answers to clarifying questions

Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.

If asked: What are the price, cost, and volume?
Answer: CAD 50 per bag, variable cost CAD 30, about 2 million bags a year.
If asked: What is proposed?
Answer: A 10 percent price rise, to CAD 55.
If asked: Do we have evidence on customer response?
Answer: Yes, two test markets and a control market.

3. The hypothesis a strong candidate states

Listen for an early, testable guess like this one. It does not need to match word for word.

Premium pet food buyers are loyal, and the product has a healthy contribution. My hypothesis is that the price rise pays unless volume falls by a lot.

4. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Price rise versus the volume it can afford to lose
- Contribution per bag before and after
- Key: Break-even volume loss
- Evidence from test markets
- Retailer response

Exhibit 1

Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).

Price test results over three months (illustrative)

Price test results over three months (illustrative)
Market	Price change (%)	Volume change (%)
Test market A	10	-5
Test market B	10	-7
Control market	0	0

So-what

Volume fell 5 to 7 percent after a 10 percent price rise, far less than the 20 percent the company could afford to lose.

5. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Contribution now
What a strong candidate does: Price minus variable cost.
Contribution now (CAD per bag): 50 - 30 = 20
Step 2: Contribution after the rise
What a strong candidate does: At CAD 55.
Contribution after (CAD per bag): 55 - 30 = 25
Step 3: Break-even volume loss
What a strong candidate does: Price rise divided by (contribution plus the rise).
Break-even volume loss (%): 5 ÷ (20 + 5) × 100 = 20
Step 4: Average test result
What a strong candidate does: The two test markets lost 5 and 7 percent of volume.
Average volume loss (%): (5 + 7) ÷ 2 = 6
Step 5: Yearly contribution now
What a strong candidate does: 2 million bags at CAD 20.
Contribution now (CAD a year): 2,000,000 × 20 = 40,000,000
Step 6: Yearly contribution after
What a strong candidate does: 6 percent fewer bags at CAD 25.
Contribution after (CAD a year): 2,000,000 × 0.94 × 25 = 47,000,000
Step 7: Curveball: the largest retailer wants a share
What a strong candidate does: Interviewer: "Our largest retailer says it will ask for an extra 3 percent discount if we raise prices." Contribution after the rise and the discount (conservatively applied to all volume):
Contribution with the discount (CAD a year): 2,000,000 × 0.94 × (55 × 0.97 - 30) = 43,898,000

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Raise the price. First, the company could lose up to 20 percent of volume before profit falls, and tests show only about 6 percent. Second, contribution rises from about CAD 40 million to about CAD 47 million a year. Third, even if the largest retailer takes an extra 3 percent discount, contribution is still about CAD 43.9 million, above today. Roll out region by region, watch volume monthly, and offer the retailer joint promotions instead of a permanent discount.

Risks a strong answer names: Long-term volume loss may exceed a three-month test; Rivals may hold prices to win share.

Next steps: Roll out in two regions first; Prepare the retailer negotiation with the test data.

Strong versus weak

A strong answer

Found the break-even volume loss, compared it with the tests, and tested the retailer curveball.

A weak answer

Worried that customers would leave and rejected the rise without checking how many could leave.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.