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Marketing Group1 Assignment1 Madhur
Marketing Group1 Assignment1 Madhur
Break-Even Analysis:
No. of units in display units(12 dozens per
display unit)
selling price per unit
Maximum Sales Revenue
Target Population (15-35 males)
Awareness of target population
Interested consumers (by survey)
No. of Potential buyers
Sales from potential buyers
Variable Costs per unit
cost price per unit
royalty to Guardian(5% of Selling price)
5% off-invoice trade promotion allowance
10% advertising allowance to 20% retailers
Total Variable Costs per unit
Fixed Costs
license fees to Guardian
salaries to 3 new sales representatives
Advertising costs
Retail displays(per display unit cost $100)
Total Fixed Costs
Contribution per unit(selling price-variable cost
per unit)
Break Even Point(in units)
Total Costs
Profit
Year 1
Year 2
7200000
17.87
12866400
0
50000000
6250000
1156250
693750
12397312
.5
7200000
17.87
10.82
0
0.8935
0.3574
12.0709
10.82
0.8935
0.8935
0.3574
12.9644
100000
255000
600000
500000
1455000
255000
600000
500000
1355000
5.7991
250901.0
019
88365480
40298520
128664000
50000000
12500000
2312500
1040625
18595968.7
5
4.9056
276214.938
94698680
33965320
Conclusion:
After doing the analysis, we think that it should launch the new product with
name Guardian. Insect-repellent clothing is growing niche market due to
growing national awareness of insect-borne illnesses. 50% of target audience, i.e.
Males in age group 18-35 who are outdoor enthusiasts, are ready to pay higher
price for this product. Guardian is already known in this target group and so
launching the product as Guardian will reduce the marketing investment of
Classic.