Product: An established beverage manufacturer is introducing a completely new product – flavored milk beverages. The target market is 6-12 years old. The product is being launched nationwide and that the retail price, which has been set based on research done, is a dollar per 240ml carton. The cartons are being sold to retail outlets for $0.80. Conducting an accurate break-even analysis requires a careful examination and study of costs and prices in your business. (entrepreneur.com, 2006)
Financials & Controls:
a. Cost of the project
All aspects of the cost of manufacture must be taken into account in order to accurately estimate the total cost of the project. Let’s say hypothetically that 100,000 cartons are being manufactured, and that cost of making the milk is $5,000, bearing in mind that flavorings, preservatives and sugar is added to dairy milk to make it flavored. Additional costs pertaining to this include packaging, which comes to an amount of $15,000, cost of labeling is $5,000 and distribution to 10,000 retail outlets across the country is going to cost approximately $15,000. In addition to this advertising is estimated to cost approximately $25,000. Bearing all this in mind, the total cost for 100,000 cartons comes to $65,000.
b. Revenue forecast
It is estimated based on market research done that 90% of the product will sell, with the main target market being six to 12 year olds. From this we can deduce that e 10% of the total amount of product manufactured will spoil or be damaged.
Given that the price for each carton is $1, and that total cost of production and distribution is $65,000, and further that $80,000 will be expected to be generated by sales to retailers, this means that the manufacturer will generate $15,000 of profit per 1000,000 cartons of flavored milk.
Marketing is this is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to satisfy customers (CFDC, 2006). This paper assesses which marketing strategy would best suit the project by comparing two marketing mediums, television and print, in a newspaper.
Pros of television marketing
TV marketing allows strategies such as immediate entry into a person’s lounge, repetition and the drumming of the message into those on the receiving end. Targeting can be done in a variety of ways – the number of times the advert is repeated, the time it is played and the program it is played during can all impact on the message the advert is trying to bring across. The same advert can be distributed among a variety of channels. The impact is subconscious. Statistics also show that more children are watching TV in the afternoons than ever before. Advertisers using the medium of TV have many options.
Cons of television marketing
It is expensive, and much of its impact is lost when people hop between channels.
Pros of newspaper marketing
The advert is physical and can be seen time and time again and referred back to by the person. Some targeting can be done: size and placing in the paper can be determined, and the type of paper, such as business, youth, etc., can be determined. A paper can be in print, or online.
Cons of newspaper marketing
The advert may not be noticed or read by the target audience, and the marketer has no control over who reads the paper. Online adverts can be slow to download and can irritate the consumer.
I believe that television marketing is still the most effective form of marketing.
CFDC, 2006, “Glossary of Business Terms” retrieved 15 May 2006
Entrepreneur.com, 2006 “Conducting a Break Even Analysis” retrieved 15 May 2006 from the website http://www.entrepreneur.com/article/0,4621,318052,00.html