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Unformatted text preview: M KT 6503 HW # 2 February 11, 2008 1. Customers who are most likely to t ry Show Circuit are........... Market sales potential in Boston metro area..... 31,240,000 2. Show Circuit's distinctive competency is that they are the first to market a complete, organic frozen dog food in the Boston area. This competency gives them the opportunity to capitalize on the market potential of frozen dog foods because i t is the first of its kind. 3. Retail price Total Var. Cost CM/Unit $5.63 $12.00 6.37 (production, freight and packaging) 4. A. Break-even for Budget-levels: $400,000 / $5.63 = 71,047.95 = 71,048 cases must be sold to break-even $600,000 / $5.63 = 106,571.94 = 106,572 cases must be sold to break-even B. Market Share: $400,000 budget-level: 71,048 / 31,240,000 = .2274% $600,000 budget-level: 106,572 / 31,240,000 = .3411% 5. Zenith's goal to increase the first year's sales by 15% may be difficult to accomplish due to three factors: - The dog food market in the Unites States already has 350 brands present in the market and presenting a new one to the market will not make that much of a difference. - Only 9% of customers are willing to pay for expensive dog food and that percentage cannot be easily increased and competition may arise, lower sales for Zenith. - In the first year, sales for Zenith will be a great deal higher than the second year due to coupons being sent to consumers, making them more willing to t ry. In the second year, those consumers may be less likely to t ry Show Circuit again because the price may be less appealing without a coupon or maybe the dog did not like the product. ...
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This note was uploaded on 04/21/2008 for the course MARK 6400 taught by Professor Smith during the Fall '06 term at LSU.
- Fall '06