a) JK Randle, CEO of lawnmower manufacturer Randles LLC, has licensed software from the makers of Roomba in order to create the first self-directed, programmable lawnmower; he has branded this new mower the Sheep . Randles anticipates that fixed costs, including the plant and robotic assembly, will be $17 million for the first year. Projected sales for the first year are 85,000 units. Unit variable costs, including all mechanical and technical parts plus the licensing fee (contracted on a per-unit basis), add up to $1200 per mower. Using these parameters, project the price Randles would need to charge to breakeven.

b) Randle already sells two other models of mowers: an upscale, best-selling rider mower called the fancy (list price at $3199), and a mid-level self-propelled mower called the pants (list price at $1899). Randle wants to conduct a cannibalization analysis to investigate whether the introduction of the sheep will positively or negatively influence the companys bottom line.

The Fancy variable costs stand at $1600/unit and are projected to sell 150,000 in the coming year if there is no Sheep. Pants variable costs are $1400/unit, with projected sales of 120,000 if there is no Sheep.

Half of next years sales for the Shee[ (as expressed in part A) would come from new customers who have never purchased a Randles product before, and half would be cannibalized from current Randles customers. 60% of cannibalized sales will be at the expense of the Fancy, and 40% taken from the Pants.

Randle has decided to introduce the Goat at a 50% markup on the breakeven price, as calculated in A.

Complete an Cannabiliazation analysis and discuss whether the introduction of the Goat project is economically viable for the company as a whole.

c) How each marketing mix decisions (product, price, promotion, and sales ), market segment, and target marketing could provide context and influence the outcome of the analysis.