Background

You are the CMO (Chief Marketing Officer) for CAPABLE JUICE. CAPABLE JUICE is a company that sells a line of premium, all-natural juices. CAPABLE JUICE is marketed as a tasty beverage particularly well-suited for people who emphasize health and wellness in their lives. To date, your company has only sold in the United States, but you are now preparing to make your first expansion into a foreign market.

Previous research has narrowed the candidate countries down to three. Regardless of which country is selected, it has already been determined that CAPABLE JUICE will be sold to local distributors who will then be responsible for selling to local retailers and, ultimately, consumers. Your Chief Financial Officer (CFO) has provided you some preliminary financial information, and you have also been handed a report created from the 2014 GfK Consumer Trends Global Consumer Survey. This survey reports information about each country. Importantly, it dives deeper and also segments consumers by their relative income and occupational status. In the United States, income and occupation have been important characteristics to identify CAPABLE JUICE consumers.

Your Goal:

Review the data from the CFO and from the GfK consumer report. Then, make some preliminary financial estimates about the likely financial performance of CAPABLE JUICE. Based on your estimates, make some preliminary recommendations for CAPABLE JUICE's future international expansion.

TASK 3: Estimating Sales

The CFO is impressed with your initial estimates. She would like you to go even further and estimate the total sales expected within each segment after one year. Again, the CFO has provided you with some important estimates to help you make your calculations.

• Financial Assumptions:
  • (1) The per unit price sold to distributors will be $0.75, regardless of country or quantity sold.
  • (2) The estimated market share for sales depends on how much a segment sees health and wellness as being essential to their lives. If healthy and wellness is a priority for a segment, the CFO assumes a 10% market share is during the first year is reasonable. If health and wellness is not a major priority, the market share is assumed to only be 5%. Health and wellness is considered to not be a priority for a segment if less than
• Question 1: Using the GfK data and the information provided by the CFO, what is the estimated annual sales for each segment?
  • CALCULATION:
    • Annual Sales $ estimated per segment = [ (Original Total Annual Sales Volume Estimate for Segment) *(Assumed Market Share) *(Price per unit to distributors) ]

ANSWER:

• Question 2: Which country, overall, has the highest estimated annual sales?

ANSWER:

• Question 3: Based on these estimates, how much money per consumer would we expect for each segment?
  • CALCULATION:
    • = (Annual Sales $ estimated per segment) / (total consumer size per segment)

ANSWER:

Country Income Group Occup- Ciemny High Medium reland High Medium USA High Medium White Collar 500 Skilled Trades 1,000 White Collar 800 Skilled Trades 1,000 White Collar 300 Salled Trades 400 White Caller 160 Skilled Tindes 100 White Car 8.000 Skilled T ides .000 White Coil 16,000 Sud Trades 24,000 Sie (000) % of Country % of Group 5% 10% 8% 10% 9% Personal Values Health and Fitness Satisfaction with Primary Shopping Location: Availability of healthy foods and beverages Drink fruit juice daily 10% 15% 30% 10% 30% 20% 40% 30% 60% 15% 8% 80% 20% 20% 33% 45% 30% Drink Fruit juice weekly % of Groep % of Groep % of Group % of Group % of Group 5% 10% Drink fruit drinks daily Drink fruit drinks weekly 10% Regularly eat healthy, nutritious foods for: physical health 20% Regularly eat healthy, nutritious foods for: mental / emotional health % of Group 10% Regularly eat healthy, nutritious foods for: appearance % of Group 5% 10% 5% 5% 5% 5% 15% 10% 10% 10% 10% 10% 15% 5% 20% 5% 20% 5% 5% Personal Values: Health and Fitness % of Group 13,688 20,075 51.100 Beverages sold per year to segment (000s) 29,200 21,353 16,060 4,088 2.008 467,200 160,600 46000 637,000 20.1 63.9 27.4 29.2 71. 2 4 0.2 25.6 201 584 20 27.4 27.4 Estimated number of annual fruit juice/ drink beverages consumed per year by segment member Estimated Market Share within Segment Estimated Annual Sales (000s) Estimates Sales per Consumer 5% $513 10% $1,506 $1.51 596 $.916 $2.40 3% 57,095 SH.IO 3% 80/ $2.67 3% 5602 $1.5 10% S 307 SI.92 5% 375 0.75 10% 35,040 $4.38 10% 512,045 $1.51 $16,425 31.03 10% $49.275 205 $1.03 Focus E6 Country Income Group Occup- Ciemny High Medium reland High Medium USA High Medium White Collar 500 Skilled Trades 1,000 White Collar 800 Skilled Trades 1,000 White Collar 300 Salled Trades 400 White Caller 160 Skilled Tindes 100 White Car 8.000 Skilled T ides .000 White Coil 16,000 Sud Trades 24,000 Sie (000) % of Country % of Group 5% 10% 8% 10% 9% Personal Values Health and Fitness Satisfaction with Primary Shopping Location: Availability of healthy foods and beverages Drink fruit juice daily 10% 15% 30% 10% 30% 20% 40% 30% 60% 15% 8% 80% 20% 20% 33% 45% 30% Drink Fruit juice weekly % of Groep % of Groep % of Group % of Group % of Group 5% 10% Drink fruit drinks daily Drink fruit drinks weekly 10% Regularly eat healthy, nutritious foods for: physical health 20% Regularly eat healthy, nutritious foods for: mental / emotional health % of Group 10% Regularly eat healthy, nutritious foods for: appearance % of Group 5% 10% 5% 5% 5% 5% 15% 10% 10% 10% 10% 10% 15% 5% 20% 5% 20% 5% 5% Personal Values: Health and Fitness % of Group 13,688 20,075 51.100 Beverages sold per year to segment (000s) 29,200 21,353 16,060 4,088 2.008 467,200 160,600 46000 637,000 20.1 63.9 27.4 29.2 71. 2 4 0.2 25.6 201 584 20 27.4 27.4 Estimated number of annual fruit juice/ drink beverages consumed per year by segment member Estimated Market Share within Segment Estimated Annual Sales (000s) Estimates Sales per Consumer 5% $513 10% $1,506 $1.51 596 $.916 $2.40 3% 57,095 SH.IO 3% 80/ $2.67 3% 5602 $1.5 10% S 307 SI.92 5% 375 0.75 10% 35,040 $4.38 10% 512,045 $1.51 $16,425 31.03 10% $49.275 205 $1.03 Focus E6