13. PROS and CONS:
Pros Cons
• 8-oz line, largest dollar and unit
share.
• first organic brand to reach
supermarkets.
• This option has high potential for
increased revenue.
• High competitors.
• High potential but has high risk and cost.
14. Analysis:
YEAR 2000 2001
Unit sales 35,000,000 35,000,000(1+20%)=42,000,000
Revenue 35,000,000*$0.46=$16,100,000 42,000,000*$0.46=$19,320,000
Cost of goods sold 35,000,000*$0.31=$10,850,000 42,000,000*$0.31=$13,020,000
Gross profit $5,250,000 $6,300,000
Expenses
Slotting Fee 6*$10,000*20retails=$1,200,000
Ads & Trade promotions $2,400,000+$870,000=$3,270,000 $3,270,000
Sales & Brokers’ fee(4%) $320,000+$644,000=$964,000 $640,000+$772,800=$1,412,800
Net Income -$184,000 $1,617,200
16. PROS and CONS:
Pros Cons
• 32-oz. gives higher average
gross profit margin than 8-
oz.
• Lower promotional
expenses.
• Less competitors.
• Difficult to achieve national
distribution.
• Slotting and SG&A
expenses would be higher.
• Need to hire sales
personnel.
17. Analysis:
YEAR 2000 2001
Unit sales 5,500,000 5,500,000
Revenue 5,500,000*$1.67=$9,185,000 5,500,000*$1.67=$9,185,000
Cost of goods sold 5,500,000*$0.99=$5,445,000 5,500,000*$0.99=$5,445,000
Gross profit $3,740,000 $3,740,000
Expenses
Slotting Fee 4*$10,000*64retails=$2,560,000
Marketing & Trade
promotions
$480,000+$1,024,000=$1,504,000 $1,504,000
Sales & Brokers’ fee(4%) $160,000+$367,400=$527,400 $160,000+$367,400=$527,400
Net Income -$851,400 $1,709,000
19. PROS and CONS:
Pros Cons
• Provide Perfect position.
• No risks.
• SG&A expenses will be low.
• The option cannot achieve
the goal.
• Many potential conflicts
and other uncertain factors
that the manager couldn’t
determine.
20. Analysis:
YEAR 2000 2001
Unit sales 1,800,000 1,800,000*1.15=2,070,000
Revenue 1,800,000*$3.35=$6,030,000 2,070,000*$3.35=$6,934,500
Cost of goods sold 1,800,000*$1.15=$2,070,000 2,070,000*$1.15=$2,380,500
Gross profit $3,960,000 $4,554,000
Expenses
Marketing $250,000 $250,000
Complementary Cases $6,030,000*2.5%=$150,350 $6,934,500*2.5%=$173,363
Net Income $3,559,650 $4,130,637
23. STRATEGIC IMPLEMENTATION:
• Choose 6 best flavours that were sold
from natural foods.
• Start to develop relationships with
supermarket distributors.
• Hire talent knowledgeable of
supermarket channel.
24. DISCLAIMER:
This presentation is made by Harsha Priyanka G,
VNIT Nagpur
During an internship under Prof. Sameer Mathur ,IIM
Lucknow.