Sunday, October 31, 2010
Advertising
Tiffany & Company is currently engaging in heavily advertising their products in order to create demand and stimulate sales because of the upcoming holiday season. During this time of year, Tiffany & Co. incurs higher marketing and advertising cost than it does during any other time of the year. In fact, their fiscal year end is not a typical December 31 year end. Because their sales are so high during the holiday season and the early part of the year (January, February) it has different year end than your normal calendar year end.
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Why are their sales so high in January and February? It is interesting to note that the end of the fiscal year can be set by the entity. For example Murray State's ends in June 30th to coincide with the state of Kentucky. Many firms choose to end January 31st simply because everyone wants to be on vacation during the Christmas/New year's holidays and January is a slower month. End of year reports often require overtime.
ReplyDeleteI would guess that the high sales in January and February would be due to Valentine's day gifts. I do find your statement about the fiscal year interesting though. Why would these months affect the when they set the company's fiscal year?
ReplyDeleteTheir sales are high in January and February because they have a lot of sales and promotions after the holiday season and people spend Christmas money on items then, OR they take advantage of sale prices (since Tiffany is such an expensive luxury item).
ReplyDeleteSales are high in February because they sell a lot for Valentine's day...probably one of their biggest holidays.
Because of tax implications involving inventory, sales, and expenses, entities alter their fiscal year depending on circumstances affecting their particular business.
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