CHAPTER 2 STRATEGY AND SALES PROGR SALES TEAM EXERCISE Year" Looking Forward to Next Last year had been a very good mostly to increased sales to existing customers. Tom Thornton, president year. Sales had increased by 10 percent to $134 million and CEO, I more excited about the coming year because of an exciting new product development plans for a geographic expansion beyond last year's Southeast Atlantic Coast sales area H meeting with you, the vice president of sales and marketing, to discuss next year's budger d like to thank you for such a great year in pushing our sales over $130 millio one of the real players in this industry. With our earnings fro greeted Tom. "As you know, I've been working on our budget for next year and feel that have an opportunity to become last year, we are finally in a position to expand beyond our present eight-state geographic sales area by adding on New York, Pennsylvania, and West Virginia in the North and Louisiana and Arkansas in the South. On top of that," he continued, "I believe that at least 10 percent of our sales will be in the new packaging technology. What I really like about the new product is that it is best suited for the high end of the market-expensive products that are easil broken if not handled correctly. We've needed a product of this kind for some time and it shouldn't cannibalize our existing products, which are really appropriate for the middle of the market "Now we just have to aggressively execute our plan," added Tom next year for S174 million, which is right at a 30-percent increase over this year's projected ales. We've got to maintain our bottom line to help finance our growth plans, so I'm setting a sales and marketing budget of $19 million, which is the same as this year's projected 10.9 percent of revenue. This is nearly a $5 million increase in your budget, which should be enough . "I've forecasted sales to reach our target of $174 million As vice president of sales and marketing, what would be your reaction to Tom's budget How would you begin to analyze this budget? What are the possible budget implications of the expanded geogracng area? What about the new product introduction