Company XYZ manufactures two Products.

Product X has a retail price of $2,500. Retailers receive a 25% margin and wholesalers receive a 20% margin. Fixed manufacturing costs are $1,500,000. The annual advertising budget is $1,000,000 . Sales salaries are $200,000. Shipping and packaging costs are $150 per unit. Variable production costs are $800. Fixed manufacturing costs are $1,250,000. The marketing promotion expense equals to 10% of sales. Product X has a 5% market share of a total market of 250,000. The market is growing at 3%.

Product Y has a retail price of $3,000. Retailers receive a 30% margin and wholesalers receive a 20% margin. Fixed manufacturing costs are $2,250,000. The annual advertising budget is $1,500,000 . Sales salaries are $250,000. Marketing promotion expenses are 10% of sales. Shipping and packaging costs are $200 per unit. Variable production costs are $900. Fixed manufacturing costs are $1,500,000. The marketing promotion expense equals to 10% of sales. Product Y has a 7% market share of a total market of 250,000. The market is growing at 10%.

What is the break-even for Product X? What is the market share to achieve break-even volume?

What are Company XYZs total Net Marketing Contribution, MROI and current profits?

The companys owners have invested $5,000,000 and expect a yearly return of 20%. Has the company achieved this goal?

The product manager for Product X provides research that an investment of $250,000 in advertising Product X will increase product X sales by 7% and an increase in the promotional expense from 10% to 15% will impact Product Y sales by 5% was suggested by the Brand Manager of Y? How would you respond to these two requests. The CEO decides that only one of the decisions can be made during the current year. Would you recommend the increase in advertising for Product X or the increase in promotional expense for Product Y.

Due to price competition, the Product Manager for Y has proposed to reduce price by 10%. How would you respond to this request?