Assume that you are the product manager for $$Hershey$$s$$ chocolate bars. You sell these to retailers for $$1\mathrm{.}00$ each. Retailers sell these bars to consumers for $$1\mathrm{.}50$ each. Each Hershey$$s bar package contains a $$0\mathrm{.}25$ coupon that consumers can redeem by returning it to the manufacturer $($i$.$e$.,$ you$).$ Based on historical data, you expect $20\%$ of the consumers to redeem their coupons. It costs you $$0\mathrm{.}45$ to

manufacture each bar. In a normal year, you sell $50$ million bars, and spend $$15$ million on marketing

campaigns.

a$.$ In order to boost sales this year, you are planning to launch an additional campaign involving TV advertising and in$-$store displays. This additional campaign will cost you $$3$ million. How many additional Hershey$$s bars will you need to sell to break$-$even on the additional marketing spending$/$investment of $$3$ million?

b$.$ If you eventually end up selling a total of $60$ million bars during the year, what would be your ROMI $($return on the additional marketing spending$/$investment of $$3$ million

c$.$ Trend research indicates that more and more consumers care about health and wellness. Accordingly, Hershey$$s is looking into launching a low$-$calorie version made with the natural sweetener, Stevia. The new bar will be called $$Hershey$$s Lite,$$ and will be available for sale to consumers at the same $$1\mathrm{.}50$ price point as regular Hershey$$s$.$ Retailers have agreed to work on the same margins as the regular Hershey$$s bars. However, it will cost the company $$0\mathrm{.}55$ to manufacture each bar of $$Hershey$$s Lite$$ due to the more costly natural ingredients. The company will offer a $$\mathrm{.}25$ coupon on the $$Lite$$ bars, similar to that offered with regular Hershey$$s bars and expects similar redemption rates. Preliminary forecasts indicate that the company will sell $6$ million $$Hershey$$s Lite$$ bars annually; however, $50\%$ of

these sales will come from the cannibalization of an equal number of the regular Hershey$$s brand. In order to drive awareness and purchase of $$Hershey$$s Lite,$$ you plan to spend $$17$ million instead of the normal $$15$ million. Based purely on the economics, would you advise management to launch the new $$Hershey$$s Lite$$ bar?