COST & PROFIT ANALYSIS The ingredients used for creating the product are: Water, Paraffin, Potassium

Cetyl Phosphate, Cera Alba/Beeswax, Cera Carnuaba/Carnauba Wax, Acacia Senegal/Acacia Senegal Gum, Glycerin, Cetyl Alcohol, Hydroxyethycellulose, Sodium Polymethacrylate, Hydrogenated Jojoba Oil, Hydrogenated Palm Oil, Phenethyl Alcohol, Phenoxyethanol, Steareth-20, PEG/PPG-17/18, Dimethicone, polyquaternium-10, Silica, Soluble Collagen, Simethicone, Panthenol, Disodium EDTA. If you were to jugde by the size of the list of ingredients you would say that the cost of the product is quite high, however, if you take into consideration the fact that a piece only has 10,7 ml, you realize that creating the product does not cost that much. In fact most of the costs come from creating the package and also distributing the product. The production site is located in Italy and transporting it so that it can be placed on the Romanian market can infere high distribution costs. However, we need to take into consideration the fact that the recipient is small and also is does not require special transportation methods, therefore it can be transported in large quantities and using cheap transportation methods (by normal trucks). It was mentioned in the leaflet that by January 2009 10,000 pcs would enter the market and would be sold at a retail price of 25 Ron. Following that by the end of the year 60,000 would have been placed on the market. Another factor to be taken into consideration when analyzing costs is the fact that the company does not have its own stores for the products to be sold in, and therefore a portion of the selling price (25 Ron) must go to the retailers, this would bring the price of the product down to 23 Ron. Fixed costs: Materials Distribution Labor Retailers Taxes

Variable costs: Advertising Market analysis Promotions

Packaging and Fulfillment Product Packaging - Packaging costs are limited, since the product only benefits from the mascara container and no additional package is needed.

COGs (Cost of Goods) - As mentioned above, the cost of the materials used to create the product is quite low and also a small quantity is needed to create 1 pcs. The cost of materials for the mascara, along with the cost of creating the container go around 9 Ron/pcs, leaving another 13 Ron for labor, distribution and advertising costs and also profits. The distribution costs are very low and represent roughly 0,4 Ron/pcs. Since most of the work is done by machines, the labor costs sum up to 2 Ron/pcs. Advertising costs are the highest and also most variable. Since we are talking about a lauch, advertising is very important for the success of the product, therefore, advertising will go up to 4 Ron/pcs. If we were to take all of this costs from the price recommended (2+0,4+9+2+4) we would have a gross profit of nearly 7,6 Ron/per pcs and if we would also take the taxes out, the net profit would be aroun 6 Ron/pcs. With a budget of 200,000 Ron, we could make 10,526 products, which would bring us a profit of nearly 63,156 Ron. Nonetheless, if sales would maintain, we would have a budget recovery in about 6 months. Pricing and Policies Pricing The final price of the product is of 25 Ron which makes it quite appealing if we were to compare it to the other competitor products: - Mascara Bourjois 37 Ron - Max Factor - 39 Ron - Astor - 31 Ron Between the price of Colossal and the price of Bourjois Mascara is a difference of 12 Ron, and this will lead to a milder advertising campaign for Colossal Mascara. Policies The policies that need to be taken into consideration are: - Health policies - Competition policies - Advertising policies Therefore the product needs to comply to certain health standards and this reflects in the price of the materials used. It is also important that while advertising the product no explicit materials are used and also the promotional videos and leaflets do not contain bad advertising towards the competitors products. Distribution As mentioned before the distribution costs will not be high, since the packaging is quite small and also no special handling is required. Most of the products will be distributed by heavy trucks. As other means of distribution plane and railway transportation will also be used.

Plane Railway Transportation Heavy Trucks