--Complete Price, Promo budget, sales budget and forecast

PRICE:

The price of your product this year. Customers expect prices to fall within a reasonable range. At the beginning of the simulation, price expectations ranged from a low of $15 in the Low End Segment to a high of $40 in the High End segment. Customers expect prices to fall each year.

For this year's expected price ranges, visit the segment pages under "Last Year's Reports". For example, at the beginning of the simulation, the expected price range in the Low and segment ranged from $15 to $25.

PROMO BUDGET:

Promotion budget this year (in thousands). Promotion drives customer Awareness. The more customers that are aware of your product, the more likely they will choose your product. You can think of Promotion as driving all interactions with customers before they begin to actively shop. Awareness decays over time. You lose about 1/3rd each year as customers forget the product. If your product had 60% Awareness last year, this year it would fall to 40% if you spent $0 to promote the product. Promotion efforts are subject to diminishing returns. Your first $1M increases awareness about 22%. The second million adds another 23%, and the third million only another 5%. Here are two examples. Suppose you had 60% Awareness last year. One third will be lost, leaving 40% of customers aware of your product. If you spent $1M, you would end the year with 62%. A $2M budget would yield 85% Awareness, and $3M would yield 89%. Suppose you attained 100% Awareness last year. This will decay by 33% to 67%. Replacing the loss would cost about $1.4M.

SALES BUDGET:

Sales budget this year (in thousands). Sales budget drives Accessibility. Accessibility examines the question, "How easy is it for customers in the segment to interact with your company during and after the sale?" It measures distribution channels, sales force, shelf space, order entry systems, customer support, etc. The easier it is to interact with your company, the more likely it is customers will choose your products. A 60% Accessibility rating means that 60% of customers find it easy to work with you and 40% do not. Put simply, if you and a competitor offer identical products, you are more likely to win the sale if your Accessibility is higher than your competitors. Accessibility is a segment issue. Products within the segment are assigned the segment's accessibility. Products in the rough cuts are pro-rated. Diminishing returns apply. If you have one product in a segment there is no additional benefit for spending more than $3M. If you have two or more products in a segment, there is no additional benefit for spending more than a combined $4.5M. Accessibility decays over time. You lose about 1/3rd each year. A $1M sales budget (combined across all products in the segment) adds 7%, $2M adds 22%, $3M adds 32%, and $4.5M adds 35%. For example, suppose you had 60% Accessibility in a segment last year. One third will be lost, leaving 40% of your customers happy with their interactions with you. You offer two products in the segment. If your combined Sales Budgets are $2M (say $1M each), you would end the year with 62% Accessibility. A combined $3M would attain 72% and $4.5M would attain 75%.

FORECAST:

Enter the number of units (in thousands) that you believe you will actually sell. If you leave "Your Sales Forecast" at zero, the Proforma financial reports will use the computer's Unit Sales Forecast.

Tip: It is important to develop a sales forecast for each product. Estimate your sales based upon current market conditions, then develop a best/worst case spread.

For example, if you think demand will be about 1000, then a worst case might be 800 and a best case 1200. Enter 800 here. Produce enough new inventory on the Production spreadsheet to have 1200 on hand for sale. This will force the Proforma Balance Sheet and Income Statements into your worst case scenario below expected sales with inventory consuming your cash. If you project even a tiny amount of cash in this nightmare world, you will not take an emergency loan from inventory expansion. Save your decisions, then enter your best case into the Your Sales Forecast column. Your Proforma financials will now project the best possible world above expected sales with all of your inventory converted to cash. If your forecast is good, the actual results will fall somewhere between your worst and best cases.

Teamname: Erie SimID: C115669 Round: 3 Year: 2023 Draft saved at Apr 04, 2020 09:50PM EDT $ 31,748 $ 9,024 $ 4,790 3.7% 0.0% Assets Current Assets Cash 0 Accts Receivable Inventories Total Current Assets Fixed Assets Plant & Equipment Accum. Deprec. O Total Fixed Assets TOTAL ASSETS 0.0% $ 5,147 $0 $ 0 $0 $ 68,500 Proforma Balance Sheet Liabilities & Owner's Equity Liabilities 22.6% Accts Payable 6.4% Current Borrowing 3.4% Emergency Loan 32.4% Maturing L.T. Debt Long Term Debt 117.0% Total Liabilities (49.3%) Common Stock 67.6% Retained Earn. O 100.0% Total Equity TOTAL LIAB. & O.E. $ 45,562 $ 164,600 ($ 69,440) $ 73,647 0.0% 48.7% 52.3% 29.7% 17.9% 47.7% 100.0% $ 41,860 $ 25,213 $ 95,160 $ 140,721 $ 67,073 $ 140,721 Assets Liabilities & Owner's Equity STONE Coach File Undo Decisions Proformas Reports Help Recalculate M Marketing Your Less Name Price * Minimum value is 6 Sales Budget Forecast Eat * Minimum value is 6 * Minimum value is 6 Benchmark | Prediction 2,478 3,383 663 867 929 0 Ebb Echo Edge * Minimum value is 6 * Minimum value is 6 Gross Revenue $ 70,610 $ 67,623 $ 25,857 $ 29,485 $ 31,565 $ 0 $ 0 $0 $ 225,140 Teamname: Erie SimID: C115669 Round: 3 Year: 2023 Draft saved at Apr 04, 2020 09:39PM EDT Variable Contrib Costs Margin Promo/Sales $ 40,262 $ 30,349 $ 26,049 $ 25,357 $ 42,266 $ 37,966 $ 15,720 $ 10,137 $ 5,837 $ 20,294 $ 9,191 $ 5,291 $ 19,891 $ 11,674 $ 7,374 $ 0 $ 0 $0 $ 0 $0 $ 0 $ 121,523 $ 103,617 $ 82,517 Egg 0.00 $0.0 $0.0 $0 $0 NA NA NA Total $0 $ 0 $ 0 $ 9,900 $ 0 $ 0 $0 $ 11,200 $0.0 $o 8,321 0 A/R Lag (days) : 30 A/P Lag (days) : 30 Unit Sales Forecast Revenue Forecast 75 - $70,611 $67,623 3,383 2,478 Revenue forecast (in 000's) Unit Sales forecast (in 000's) $31,565 $29,485 $25,857 867 929 663 Eat Egg Eat Echo Edge Egg Ebb Variable Cost Echo Edge Marketing Margin After Marketing Ebb Trad Low High Pfmn Size Teamname: Erie SimID: C115669 Round: 3 Year: 2023 Draft saved at Apr 04, 2020 09:50PM EDT $ 31,748 $ 9,024 $ 4,790 3.7% 0.0% Assets Current Assets Cash 0 Accts Receivable Inventories Total Current Assets Fixed Assets Plant & Equipment Accum. Deprec. O Total Fixed Assets TOTAL ASSETS 0.0% $ 5,147 $0 $ 0 $0 $ 68,500 Proforma Balance Sheet Liabilities & Owner's Equity Liabilities 22.6% Accts Payable 6.4% Current Borrowing 3.4% Emergency Loan 32.4% Maturing L.T. Debt Long Term Debt 117.0% Total Liabilities (49.3%) Common Stock 67.6% Retained Earn. O 100.0% Total Equity TOTAL LIAB. & O.E. $ 45,562 $ 164,600 ($ 69,440) $ 73,647 0.0% 48.7% 52.3% 29.7% 17.9% 47.7% 100.0% $ 41,860 $ 25,213 $ 95,160 $ 140,721 $ 67,073 $ 140,721 Assets Liabilities & Owner's Equity STONE Coach File Undo Decisions Proformas Reports Help Recalculate M Marketing Your Less Name Price * Minimum value is 6 Sales Budget Forecast Eat * Minimum value is 6 * Minimum value is 6 Benchmark | Prediction 2,478 3,383 663 867 929 0 Ebb Echo Edge * Minimum value is 6 * Minimum value is 6 Gross Revenue $ 70,610 $ 67,623 $ 25,857 $ 29,485 $ 31,565 $ 0 $ 0 $0 $ 225,140 Teamname: Erie SimID: C115669 Round: 3 Year: 2023 Draft saved at Apr 04, 2020 09:39PM EDT Variable Contrib Costs Margin Promo/Sales $ 40,262 $ 30,349 $ 26,049 $ 25,357 $ 42,266 $ 37,966 $ 15,720 $ 10,137 $ 5,837 $ 20,294 $ 9,191 $ 5,291 $ 19,891 $ 11,674 $ 7,374 $ 0 $ 0 $0 $ 0 $0 $ 0 $ 121,523 $ 103,617 $ 82,517 Egg 0.00 $0.0 $0.0 $0 $0 NA NA NA Total $0 $ 0 $ 0 $ 9,900 $ 0 $ 0 $0 $ 11,200 $0.0 $o 8,321 0 A/R Lag (days) : 30 A/P Lag (days) : 30 Unit Sales Forecast Revenue Forecast 75 - $70,611 $67,623 3,383 2,478 Revenue forecast (in 000's) Unit Sales forecast (in 000's) $31,565 $29,485 $25,857 867 929 663 Eat Egg Eat Echo Edge Egg Ebb Variable Cost Echo Edge Marketing Margin After Marketing Ebb Trad Low High Pfmn Size