INDEX marketing efforts

The manufacturer sets a wholesale price w, and has a marginal cost of production c (normalized to zero). Each of n stores (indexed by 5 affects demand via price ps and marketing effort (which captures retail value-add through activities such as salesperson support, retailer advertising, and in-store displays). The cost of providing effort is quadratic C e) = e. is the unit retailing cost for independent retailer 5, while the manufacturer incurs a unit retailing cost of Vm in its own store. 

Essential oils are concentrated extracts or steam distillates of aromatic plants. Oils such as wintergreen or jasmine have been added to enhance the flavor and smell of food for centuries and are key components of perfumes. Chemical analysis of these oils reveals that the overall smell is due to complex mixtures of small molecules, many of which contribute to the smell of the oil. Indole and indolic compounds are common components of these mixtures. Natural jasmine oil typically contains about 2.5% indole. Over time, the increasing cost of raw materials and processing has led to efforts to produce simpler nfixtures that would have the same sensory effect. Reasonable approximations of many of these oils can be made today with completely synthetic components. Despite these advances, the imporl/export market for natural essential oils in 2008 still was a respectable 2.5 billion (See PDF download from http //www.cmm.org/index.php optiOTi=com docman task). 

All this effort in producing highly paraffinic oil means that some of these oils will possess a viscosity index (VI) that can make them good lubricating oils. So a very large competing use for some of these oils is their possible alternate use in the huge lubrication oil market. 

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