A five-year sales forecast for the company must be demonstrated. List and explain/quantify each factor that went into your forecast (e.g., past three year company sales trends). Do not rely solely upon past sales trends. Make this a high level forecast and include broad items that would affect strategy. Show your calculations in a table and, if needed, explain your calculations so they are clear. What might be some of the financial, logistical, and strategic implications of your marketing plan?

Your marketing people have described their strategy as a push strategy with heavy advertising to create customer demand. Seventy-five percent of your sales occur during the summer vacation months (June through August) and the Christmas holiday season (late November and December). Advertising consists of 50% local television spots and 25% sponsorship of local events, such as concerts, which attract a significant number of tourists. The remaining 25% of marketing cost relates to discount coupons placed in motels, restaurants, and other locations such as nearby ski resorts. Due to deteriorating financial conditions, normal store maintenance has been significantly reduced. The company has recently developed an on-line store which accounts for 0.05% of sales.

Store designs are quaint and are modeled on a rural local corner store theme. Each store is 2,800 square feet in total area. The industry average is $400 sales/per square foot per year. Approximately 20% of each store's total floor space is devoted to a back-room area for inventory storage and an employee break area. Harrison calculates its sales per square feet using front end space only (not the inventory area). Fifty percent of the merchandise could be categorized as a combination of country style and new age high-end products. Employees dress "country-style" or "hippie-style" to support this atmosphere. This half of the store's merchandise includes such things as candles, paintings, incense, jewelry, music CDs, and country-style furniture (e.g., oak rocking chairs, bed headboards, and cabinets). Premium pricing for this merchandise is the norm. The other 50% of store merchandise consists of consumer non-durables (convenience items), targeted primarily to the local community. These items are moderately priced and include a wide range of items from soap to cookies to laundry detergent to clothes. These items must be sold at competitive prices. All products are marketed as high-quality items. Countryew age items are claimed to be produced by small "home" or local producers despite the fact that they are produced in moderate volumes by small producers from a variety of places and shipped exclusively from the two distribution centers. Merchandise production identifiers, such as "made in China" are covered over where possible. Most of the stores are located in the downtown area of the small rural towns.

Each store currently operates from 9:00 AM to 7:00 PM, Monday through Saturday. Stores are closed on Thanksgiving, Christmas day, and New Year's Day.

$Million 288 % Total Assets 1.0% 1.9% 26.7% % Total Assets 1.5% 1.6% 27.8% $Million 440 .469 8.155 % Total Assets 7.9% 1.4% 28.0% $Million 2.421 429 8.582 .548 7.694 % Total Assets 5.5% 2.5% 22.8% $Million 8,373 3,840 34,375 1.7% 2.2% 24.6% BALANCE SHEETS Cash & Equivalents Receivables Inventory Total Current Assets Land, Stores Equipment, Distribution Centers, & Trucks 8.530 29.6% 9.064 9.064 30.9% 11.432 37.3% 46,588 30.8% 28.5% 20.289 7 0.4% 20.268 69.1% 19.216 62.7% 104,605 69.2% 71.5% Total Assets 28.819 100.0% 29.332 100.0% 30.648 100.0% 151,193 100.0% $13.457 7.407 25.7% 6.921 23.6% 3.287 10.7% 28,371 18.8% 12.1% 5.043 17.5% 8.151 27.8% 6.554 21.4% 23,363 15.4% 10.1% Accounts Payable Other Current Liabilities Total Current Liabilities Long Term Debt Stockholder's Equity Total Liabilities & Stockholder Equity 12.450 4.813 43.2% 16.7% 15.072 2.407 51.4% 8.2% 9.831 3.900 32.1% 12.7% 51,734 37,886 34.2% 25.1% 22.2% 39.3% 11.556 40.1% *11.853 40.4% 16.917 55.2% 61,57340.7% 38.5% 28.819 100.0% 29.332 100.0% 30.648 100.0% 151,193 100.0% $13.457 Year End Stock Price Dividends *Equity withdrawal in "2 years ago $6.25 $0.00 $10.00 $0.00 $13.13 $0.00 ATTACHMENT 1-HARRISON COMPANY CASE FINANCIAL AND COMPETITOR INDUSTRY INFORMATION INCOME STATEMENTS Harrison Percent of Sales Harrison Percent of Sales Harrison Percent of Sales Industry Average Harrison Last Year $Million 48.127 38.453 9.674 7.893 100.0% 79.9% 20.1% 16.4% Harrison 2 Years Ago $Million 48.992 39.292 9.700 8.132 100.0% 80.2% 80.2% 19.8% 16.6% Harrison 3 years Ago $Million 52.102 41.786 10.316 7.659 100.0% 80.2% 19.8% 14.7% Global Global Market Market Leader Leader $Million 348,650 100.0% 265,152 76.1% 83,498 23.9% XXXXXXXXXXXXX $25.00 80.0% 20.0% XXXXXXX 1.059 .193 2.2% 0.4% .686 245 1.4% 0.5% .625 313 1.2% 0.6% XXXXXXX XXXXXXX XXXXXX XXXXXX Revenue Cost of Goods Sold Gross Profit Operating Expense General & Administrative Marketing Operating, Gen., Sell, & Admin. Interest Expense COGS and Total Expenses Net Income Before Taxes Taxes Net Income After Taxes XXXXXXX XXXXXX 0.8% XXXXXXX .193 XXXXXXX 312 64,320 1,529 18.4% 0.4% 15.0% 1.6% 385 0.4% 0.6% 47.983 99.7% 48.548 99.1% 50.695 97.3% 331,001 94.9% 96.6% 0.3% 444 1.407 .144 .048 0.9% 0.3% 2.7% 0.9% 17,649 6,365 5.1% 1.8% 3.4% 0.9% 0.1% .147 469 .096 0.2% 297 0.6% .936 1.8% 11,284 3.3% 2.5% % Total Assets 1.0% 1.9% 26.7% $Million .288 548 7.694 % Total Assets 7.9% % Total Assets 1.5% 1.6% 27.8% $Million 440 469 8.155 $Million 2.421 429 8.582 % Total Assets 5.5% 2.5% 22.8% $Million 8,373 3,840 34,375 1.4% 1.7% 2.2% 24.6% 28.0% BALANCE SHEETS Cash & Equivalents Receivables Inventory Total Current Assets Land, Stores Equipment Distribution Centers, & Trucks 8.530 29.6% 9.064 30.9% 11.432 37.3% 46,588 30.8% 28.5% 20.289 7 0.4% 20.268 69.1% 19.216 62.7% 104,60569.2% 71.5% Total Assets 28.819 100.0% 29.332 100.0% 30.648 100.0% 151,193 100.0% $13.457 $Million 288 % Total Assets 1.0% 1.9% 26.7% % Total Assets 1.5% 1.6% 27.8% $Million 440 .469 8.155 % Total Assets 7.9% 1.4% 28.0% $Million 2.421 429 8.582 .548 7.694 % Total Assets 5.5% 2.5% 22.8% $Million 8,373 3,840 34,375 1.7% 2.2% 24.6% BALANCE SHEETS Cash & Equivalents Receivables Inventory Total Current Assets Land, Stores Equipment, Distribution Centers, & Trucks 8.530 29.6% 9.064 9.064 30.9% 11.432 37.3% 46,588 30.8% 28.5% 20.289 7 0.4% 20.268 69.1% 19.216 62.7% 104,605 69.2% 71.5% Total Assets 28.819 100.0% 29.332 100.0% 30.648 100.0% 151,193 100.0% $13.457 7.407 25.7% 6.921 23.6% 3.287 10.7% 28,371 18.8% 12.1% 5.043 17.5% 8.151 27.8% 6.554 21.4% 23,363 15.4% 10.1% Accounts Payable Other Current Liabilities Total Current Liabilities Long Term Debt Stockholder's Equity Total Liabilities & Stockholder Equity 12.450 4.813 43.2% 16.7% 15.072 2.407 51.4% 8.2% 9.831 3.900 32.1% 12.7% 51,734 37,886 34.2% 25.1% 22.2% 39.3% 11.556 40.1% *11.853 40.4% 16.917 55.2% 61,57340.7% 38.5% 28.819 100.0% 29.332 100.0% 30.648 100.0% 151,193 100.0% $13.457 Year End Stock Price Dividends *Equity withdrawal in "2 years ago $6.25 $0.00 $10.00 $0.00 $13.13 $0.00 ATTACHMENT 1-HARRISON COMPANY CASE FINANCIAL AND COMPETITOR INDUSTRY INFORMATION INCOME STATEMENTS Harrison Percent of Sales Harrison Percent of Sales Harrison Percent of Sales Industry Average Harrison Last Year $Million 48.127 38.453 9.674 7.893 100.0% 79.9% 20.1% 16.4% Harrison 2 Years Ago $Million 48.992 39.292 9.700 8.132 100.0% 80.2% 80.2% 19.8% 16.6% Harrison 3 years Ago $Million 52.102 41.786 10.316 7.659 100.0% 80.2% 19.8% 14.7% Global Global Market Market Leader Leader $Million 348,650 100.0% 265,152 76.1% 83,498 23.9% XXXXXXXXXXXXX $25.00 80.0% 20.0% XXXXXXX 1.059 .193 2.2% 0.4% .686 245 1.4% 0.5% .625 313 1.2% 0.6% XXXXXXX XXXXXXX XXXXXX XXXXXX Revenue Cost of Goods Sold Gross Profit Operating Expense General & Administrative Marketing Operating, Gen., Sell, & Admin. Interest Expense COGS and Total Expenses Net Income Before Taxes Taxes Net Income After Taxes XXXXXXX XXXXXX 0.8% XXXXXXX .193 XXXXXXX 312 64,320 1,529 18.4% 0.4% 15.0% 1.6% 385 0.4% 0.6% 47.983 99.7% 48.548 99.1% 50.695 97.3% 331,001 94.9% 96.6% 0.3% 444 1.407 .144 .048 0.9% 0.3% 2.7% 0.9% 17,649 6,365 5.1% 1.8% 3.4% 0.9% 0.1% .147 469 .096 0.2% 297 0.6% .936 1.8% 11,284 3.3% 2.5% % Total Assets 1.0% 1.9% 26.7% $Million .288 548 7.694 % Total Assets 7.9% % Total Assets 1.5% 1.6% 27.8% $Million 440 469 8.155 $Million 2.421 429 8.582 % Total Assets 5.5% 2.5% 22.8% $Million 8,373 3,840 34,375 1.4% 1.7% 2.2% 24.6% 28.0% BALANCE SHEETS Cash & Equivalents Receivables Inventory Total Current Assets Land, Stores Equipment Distribution Centers, & Trucks 8.530 29.6% 9.064 30.9% 11.432 37.3% 46,588 30.8% 28.5% 20.289 7 0.4% 20.268 69.1% 19.216 62.7% 104,60569.2% 71.5% Total Assets 28.819 100.0% 29.332 100.0% 30.648 100.0% 151,193 100.0% $13.457