What is the advantages of selling this product as a premium dog food?
download the case material here: Link (Case2_PetFoods-2 )
After you read it, consider the following assumptions:
Let’s suppose the company wants to position and promote our new product as a premium canned dog food alternative.
Let’s further assume that the target market will be in the Boston area, and the product will be sold as a premium price and through supermarket channels only (Make sure you know the implication of all the assumptions that are highlighted.)
Based on the case information and the assumptions above, answer the following questions:
1 What brands are our main competitors? What are their prices per unit?
2 What is our product’s variable cost per tube?
3 What is the advantages of selling this product as a premium dog food?
4 How much is the total annual sales revenue ($) in this selected target market? (i.e., the size of the target market)
5 If the company sets the retail price (MSRP) of the product at $3.75 per tube, what is its gross profit per tube for the company?
6 How much sales units are needed to break even the suggested advertising and promotion spending for this new product in its target market area? (Don’t forget there is a slotting fee as well, and there are two different promotion spending options.)
7 What are the break-even market shares (%) for these two suggested promotion plans?
Compared with competitors’ brand image, advertising spending, and market share, what would you recommend this company do? Submit your Word file before the due date and make sure when there’s a formula involved, it should clearly indicated in the document, such as the break even analysis.
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