MKT 291- Snapple Financial Plan

MKT 291- Snapple Financial Plan - F INANCIAL POSITIONING...

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FINANCIAL POSITIONING AND PROJECTIONS Break-Even Analysis and Sales Forecast We based our break-even analysis and sales forecasts numbers after collecting data from Dr. Pepper Snapple Group’s 2009 Full Report. Breaking even and having no losses is always the number one goal when launching a new and innovative product such as Snapple Organic. By launching Snapple Organic, many expenses occur quickly, which include advertisements, the overall cost to produce the product, and paying our distributors and retailers. This will end up costing $1,000,000 on advertisement ($400,000,000/29products of Dr. Pepper Snapple which is again divided among other Snapple products), $.30 for the overall cost to produce one bottle of Snapple Organic (including the stevia), $.10 per bottle to the distributors, and $.10 per bottle to the retailers. By selling Snapple Organic for $2.45 per bottle (17.5 oz), we will break even if we sold 606,061 bottles of Snapple Organic per year, which is a high but very possible number to reach. For our sales forecast, we also looked at the Dr. Pepper Snapple Group’s 2009 Full Report. We saw that last year their net sales were $46,758,621 (Note: Dr. Pepper Snapple Group has 29 products including Snapple- $1,356,000,000/29) and the net income was $3,931,034. This comes out to be an 8.5% growth for the whole Snapple product line. We project that our net sales for Snapple Organic will significantly increase to 20% over the first year. This will be achieve by making 606,061 bottles at a price of $.50 per bottle which, comes out to $303,031 and selling the Snapple Organic at a price of $2.45, which makes net sales to be $1,500,000. It will be a slow start at first because advertisements will come out roughly three months of we put Snapple Organic on the shelves, but we are
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expecting a heavy demand once our implementation plan is in full effect. We expect our brand recognition to help us out tremendously, and also once our customers see how great our product is, customer loyalty will play a major effect on assuring the our customers come back for more. IMPLEMENTATION PLAN
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MKT 291- Snapple Financial Plan - F INANCIAL POSITIONING...

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