...Case 08-5 Sell-it Products, Inc. Sell-it Products Inc.’s (SPI) business is the manufacturing, marketing and distribution of consumer products. SPI sells all its products through grocery stores, drug stores and mass merchandisers in the United States (USA), Canada, Mexico, Asia, and Europe. SPI has a dedicated sales force with individuals assigned by geographic area. Each salesperson is responsible for representing and selling all of SPI’s products. SPI is organized into three divisions that include the following products: 1. Beauty Care — cosmetics and shampoo. 2. Family Care — paper towels and diapers. 3. Drinks and Snacks — Blasto Energy Drink, Jazzy Juice and fruit and granola snacks — each of these products contain no added sugar or preservatives in order to appeal to the diet/health conscious consumer. The production, distribution and sale of each of SPI’s products is subject to the Federal Food, Drug and Cosmetic Act in the USA and other federal, local and state laws in the regions in which SPI conducts business. Although SPI’s competition in the cosmetics, shampoo, paper towels, diapers, juice, and snacks markets has remained fairly constant over the past few years and is expected to remain fairly constant in the foreseeable future, SPI expects to face increased competition in the energy drink marketplace due to the introduction of new energy drinks by two of SPI’s competitors in 2006. Managers responsible for each product line (Product Managers) report...
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...Payback and NPV Tiffanie Lampley FINA 310, Unit 4 IP AIU Instructor Morales December 8, 2013 Abstract This essay includes projected cash flows for the next eight years. The payback period method is used to determine the amount of time it would take the company to recoup initial investment costs. The net present value is then tabulated in order to determine whether the project should be rejected or accepted. Payback and NPV A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. Indirect incremental costs are estimated at $95,000 a year. The project requires a new plant that will cost a total of $1,500,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000. Assume there is no need for additional investment in building the land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%. According to the above table, the company projects revenues of $950,000 the first year and $1.5 million each successive year. Direct costs are projected to be 45% of sales giving the above figures of $427,500 the first year and $675,000 each successive year. Indirect costs are equally distributed at $95,000 each year, which...
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...The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself (Ducker). Though a simple statement, as the world economy grow and consumers change this gets increasingly difficult. Globalization has caused marketers to research different countries, creeds, and cultures to make unique marketing strategies. Globalization isn’t the future of our economy, it’s the now. Advances in technology have made the world a much smaller place. With access to new markets many companies are venturing into uncharted territory in search for profit. Though its sounds great there are many precautions to take before a company finds a new market. There are barriers to entry: most common among many are tariffs, quotas, and sociocultural variances. Tariffs are taxes put on imports from other countries. The effect of a tariff is to raise the price of the imported product; it makes imported goods more expensive so that people are more likely to purchase domestic products. Quotas are limits on the amount of goods that can be imported. Putting a quota on a good creates a shortage, which causes the price of the good to rise and make the imported goods less attractive for buyers. This encourages people to buy domestic products, rather than foreign goods. Sociocultural differences in religious beliefs or practices, basic cultural assumptions and/or patterned behavior, language, idiom, body language and assumptions about social strata are all among potential...
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...Every days billion of companies invent news goods that are put into the market. Most of products are not useful to satisfy needs, but are only useful to satisfy wishes that, thanks to commercial, the people feel. A lots of companies produce goods similar. For example: how much cars, phones and so on are into the market? There are all similar goods, but the market is full to them. So the real ability is to sell similar products. The advertising is useful to sell something (Gladwell, 2009 –chapter 2-), but if you think a commercial, you have only 3-4 minutes to talk about your new creation. You have to convince people that what you sell is the best thing. Often people prefer buy what cost less, but a good salesman have to persuade you to buy...
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... which they report on all of them. Frito-Lay North America (FLNA): makes, markets, distributes and sells branded snack foods. These foods include Lay’s potato chips, Doritos tortilla chips, Cheetos cheese-flavored snacks, Tostitos tortilla chips, branded dips, Ruffles potato chips, Fritos corn chips and Santitas tortilla chips. FLNA’s branded products are sold to independent distributors and retailers. In addition, FLNA’s joint venture with Strauss Group makes, markets, distributes and sells Sabra refrigerated dips and spreads. Quaker Foods North America (QFNA): makes, markets, distributes and sells cereals, rice, pasta, dairy and other branded products. QFNA’s products include Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Quaker grits, Cap’n Crunch cereal, Life cereal, Rice-A-Roni side dishes, Quaker rice cakes, Quaker oat squares and Quaker natural granola. These branded products are sold to independent distributors and retailers. Latin America Foods (LAF): markets, distributes and sells a number of snack food brands including Doritos, Cheetos, Marias Gamesa, Ruffles, Emperador, Saladitas, Lay’s, Rosquinhas Mabel, Elma Chips and Sabritas, as well as many Quaker-branded cereals and snacks. These branded products are sold to independent distributors and retailers. PepsiCo Americas Beverages (PAB): makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including Pepsi...
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...Why Resellers Don’t Sell MARCH, 2006 Why Resellers Don’t Sell Introduction Properly structured and supported, indirect channel are often the fastest, most cost-effective way for a company to scale its business overseas. But, the fact is – most resellers don’t sell. And the reason they don’t sell has much more to do with you than your technology, the marketplace or the reseller’s business. The prospects of partnering with international resellers and gaining access to new markets is an exciting one for any company. It can be quite gratifying to have someone from another country share your vision and be willing to make the commitments and investments needed to help expand your business in areas where you don’t have the time and/or resources to establish a direct presence. The motivations behind a reseller’s interest in your technology will vary. But, regardless of their motivation, once you have the contracts signed, they are supposed to get to work marketing and selling your technology and you can wait for the international orders to come in. And you wait … three months, six months, twelve months. Nothing. So what happened? Why didn’t all of those partners go out there and sell? Signing contracts with resellers is easy – getting them to actually sell and support your product is more of a challenge. There are many dynamics at play in building a successful channel – the needs of the channel partner, the needs of the end user, and last, and perhaps least, the needs...
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...Product Management and Strategy Dr. Prashant Mishra prashant@iimcal.ac.in A Business Strategy Product-Market Investment Decision • Product-market scope • Investment intensity • Resource allocation over business units Basis of SCAs • Assets/Competencies • Synergies Functional Area Strategies • Product • Price • Distribution • Etc. Figure 1.1 The Four Ps: The Tools The Four Cs: The Ends Marketing Mix Product Customer Solution Place ConvenPromotion ience Communication Price Customer Cost The Other 4Cs: The Participants The Participants Competitors Company Consumer Channel Views on the Marketing Processes 5-C Analysis Customer Competitor Company Collaborators Context S-T-P Marketing Segmentation Targeting Positioning 4 P’s Marketing Plan Product Pricing Promotion Place The Functional View Views on the Marketing Processes Understanding Customer Value Creating Customer Value Capturing Customer Value Delivering Customer Value Sustaining Customer Value The Process View Understanding Customer Value • Value is defined as the perceived worth in monetary units of the of the set of economic functional / technical and psychological benefits received by the customer in exchange for the price paid for for a product offering, taking into consideration the available offerings and prices. - Anderson, Jain and Chintagunta(1993) Understanding Customer Value Psychological Functional Economic Plea From an Anonymous...
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...the customer’s needs. A person might say that the word marketing only means to sell a product.Marketing does not just mean to sell products it means to care about your customers and sell them the best products. When managers are trying to market a certain product to their customer, they first want to make sure they know everything about that product. Managers want to make sure that they are selling the best product to their customers. Marketing is very important in organizations and without marketing; the company cannot make money, promote new products or be successful in their business. Marketing is always used every day in an organization. Marketing is the key in making organization be successful. When managers are trying to make money and make their company stand out this is where marketing comes in. The purpose of this paper is to explain the importance of marketing in organizational success. One will provide at least three examples from the business world to support their explanation. The importance of Marketing in organizational success The importance of marketing in organizational success is very important. Everyday organizations always want their business to achieve the best in their sales or try to sell and market a certain product. When the manager or the CEO that is over the biggest bank industry such as Bank of America they are always trying find a way to sell a new product to their customers. Marketing is very important to big organizations in how they...
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...1.0 Product strategies The product that we chose to sell on business event is not a meal but rather a snack. It is Italian Chicken Frankfurters from Ayamas; Italian sausages. Ayamas is famous in producing top quality halal products such as the sausages that we chose for the business event. The product that we sold is simple which everyone can enjoy. A simple sausage with a stick is just easy and it can be the most convenient food that all the students and teachers including staffs. They can just buy it, grab it and go. A simple sausage that is without any sauce is delicious yet a time-saving product which is just one Ringgit Malaysia for each. 1.1 The reason of the product/s being chosen As student having busy schedule all day long, we figure out that selling a meal might not be the way to attract them. So, our group decided to pick sausages as the food to sell in the Business Event and one of the reason is because the preparations for the food is not difficult and also the items we need to prepare for the sausages are not hard to get and yet easy to handle before and after the Business Event. As we all know steaming sausages won't take a long time and it is also easily done. As long as the time for steaming the sausages is right and the quality of the sausages is good, the sausages can be a really tasty food to have, easy yet tasty. We did also fry part of the uncooked sausages so we can provide more variety of choice for our customers. Frying would take longer time than...
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...them not getting into consumer product in the market. Star Chemical has not participated in this form of integration because of their lack of experience in consumer marketing and lack of a product to introduce. Star Chemical is in desperate need of a new and efficient channel strategy in order to sell and distribute their new germicidal pool chemical. There are many alternatives and decisions to make, but it is recommended that Star Chemical hire a distributor. They can brand the product and sell it in bulk form for private labeling to broaden their potential customers, push the product through the market due to the decrease in cost compared to advertising, bring established channels and knowledge through a distributor, and focus on a few certain markets and channels to start out with in order to help develop their strategy before they expand. Situational Analysis: Positive Market Factors: • The marketing size is good because there are a good large of pool owners in the United States. • The market geography is definitely favoring. The distribution of pool owners in the United States spans broadly due to a wide variety of pool owners (residential owners, hotel owners, and school pools). Positive Company Factors: • Star Chemical Company is a medium sized company with a larger range of options than a smaller manufacturer. They can pursue more channels so that they can expand their market. • They have an objective of getting the product (germicidal chemical) distributed...
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...Different retailing businesses have very different distribution methods based on the types of product that they sell, some arguably more effectively than others. As mentioned in an earlier assignment, there are three main types of distribution channels. The first is the channel that goes from the producer, then to the wholesaler, then to the retailer or sells to the consumer. The second channel starts with the producer who sells straight to the retailer, who then sells to the consumer. The third channel goes directly from the producer to the consumer. Channels one and two are classed as indirect marketing channels, whereas channel three is a direct marketing channel as it goes straight from producer to consumer. All of the distribution channels start with a producer who will create the products, for example the person that milks the cows to get milk. For the first channel, the producer makes the product and then sells it to a wholesaler, such as Costsco who will purchase a huge quantity of products from them. They would do this to make sure that they have enough to sell onto retailers. They would keep a large amount of the product, for example some kind of confectionary, in there warehouse so they’re in a suitable environment to be kept until they’re sold on. Next, the retailer, who could be a small store or a larger store, who would want to purchase a specific amount of products from the wholesalers, not in as bulk form as the wholesaler would have purchased them in. This...
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...| | | Major Channels of Product Distribution | | In China's distribution sector, the coverage of its vertical wholesaling system is extensive with wholesalers reaching out to a large number of widely dispersed rural markets at county level and below where the distribution system is undeveloped, meeting the enormous consumption needs of markets at the lower end. On the other hand, the coverage of China's horizontal retailing system is relatively narrow and retailers tend to concentrate in markets at different levels. The major types of distribution channels in the mainland are: 1. Manufacturer → wholesaler → retailer → consumer. This is the traditional channel. 2. Manufacturer → trade fair or exhibition → commercial enterprise (wholesale or retail) → consumer. 3. Manufacturer → commercial enterprise (wholesale or retail) → consumer. This type of distribution channel is known as direct purchase, i.e. a commercial enterprise purchases the goods directly from a manufacturer. As this channel involves fewer intermediaries and thus saves costs, it has developed rapidly. 4. Manufacturer → wholesale mart → commercial enterprise (wholesale or retail) → consumer. Goods such as clothing, footwear and small home electrical appliances are primarily channelled through wholesale marts. 5. Manufacturer → agent → retailer → consumer. This flexible channel is also growing very fast. 6. Manufacturer → distribution centre → retailer → consumer. This channel is particularly well...
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...Burris in Demand Media, describe channels of distribution as “how products are delivered to target customers” (Tim, 2014). Marketers can either use mediators to deliver their products or they can go through the distribution process themselves. The direct route that a seller utilize to make finished product available to the market, whether buying it from the seller, at a store, online, from a salesperson, or otherwise, can be referred to as distribution channels. Every person or firm involved in buying, reselling and promoting the product as it makes its way to customers, are part of the marketing channel (Tim, 2014). Distributing channels in terms of grouping are the distributers, wholesalers, and retailers. They provide businesses with three kinds of functions. Namely, buying products for resale to customers; distributing products to customers; and supporting sales to customers through financing and other services. The primary function of the distributer is to make the product available in more markets, for convenience to customers’ purchase (Jorina, 2003). Three different types of distribution channels we would use are, direct to end users, sell through a dealer network, and sell through a VAR (value-added reseller). With Direct to end users, we would have a sales team that sells directly to Fortune 100 companies. We would have a second product line for small businesses, instead of using our sales team, we would sell directly to end-users through a website and marketing campaigns...
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...profits for the firm. On way of asssessing this iis by calculatting the break to al ne keven point. The breakev point calc . ven culates the nu umber of incr remental unit the firm ne eds to sell to cover ts the co of the prog ost gram. If the f firm sells less than the brea akeven point volume, then it is losing m n money -- it is not selling eenough to re coup its inve s estment. If th firm sells m he more than th breakeven point he volum then it is m me, making mone -- it is sellin more than enough to co ey ng over its invest tment. Ma anagers use breakeven a nalysis to as ssess the finaancial feasibi lity of markeeting investm ments. Once a breakeven point is calcu ulated, mana agers need to evaluate wh ether it is fea asible that the firm e will b able to sell that quantity of product. be y Ma arketing mannagers use b breakeven a nalysis to a assess many different ty pes of mark keting progr rams. For ex xample, a firm may want tto assess how many increm m w mental units of product it must sell to recoup the o cost o a $10 millio advertising campaign. Or, a firm m of on g may want to a assess how m many increme ental units of product it m must sell to rec coup the cost of a $5 millio sales prom otion. on Or, a firm may wa to assess h ant how many inc cremental un its of a new p product it mu sell to cov er the ust cost o lost sales of an existing p of f...
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...Chapter 6 Cost-Volume-Profit Relationships True/False 1. To estimate what the profit will be at various levels of activity, a manager can simply take the number of units to be sold over the break-even point and multiply that number by the unit contribution margin. Level: Medium LO: 1 Ans: T 2. Incremental analysis is generally the simplest and most direct approach to decision making. Level: Easy LO: 1 Ans: T 3. To facilitate decision-making, fixed expenses should be expressed on a per-unit basis. Level: Medium LO: 1 Ans: F 4. One assumption in CVP analysis is that inventories do not change. Level: Easy LO: 1 Ans: T 5. On a CVP graph for a profitable company, the total expense line will be steeper than the total revenue line. Level: Medium LO: 2 Ans: F 6. If sales volume increases, and all other factors remain unchanged, the contribution margin ratio will decrease. Level: Medium LO: 3 Ans: F 7. The break-even point for a capital intensive, automated company will tend to be higher than for a less capital intensive company while the margin of safety will tend to be lower. Level: Medium LO: 5,7 Ans: T 8. An increase in the number of units sold will decrease a company’s break-even point. Level: Medium LO: 5 Ans: F 9. Assuming that the unit contribution margin is positive, a 10% decrease in selling price will increase the break-even point in terms of unit sales more than will a 10% increase in the variable...
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