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Questions: 1. How many units of OASIS juice were sold in 2010? and, how many units are planned to be sold in 2011? 2. What will be the new price for the next year? and, what are the planned 2011 sales in $? 3. What should be the percent increment of each marketing activity to increase sales by 10% in 2011? (Please consider the units of measurement of each activity, See Table 2) 4. What should be the optimal marketing resource allocation for 2011 in CS? Table 2: Sales Response Elasticities Elasticities Marketing Activities (Unit of measurement) Advertising (C$) 0.036 Promotion (% of sales volume on promotions) 0.277 Distribution (% of coverage) 2.424 Price (C$) -1.734 The brand manager knows that she has to invest $2000 per each incremental point (1%) in retail coverage, and $0.4 for each unit on sales promotion. She also plans to decrease the juice price in 1% for 2011. Table 1: Allocation of Resources 2010 Marketing Program (C$) Advertising 60,000 Promotion 20,000 50,000 Distribution Assume also that currently this product is available in 80% of all retailers in the province, with an average price of C$4 per unit. In 2010, 20% of all units sold are dedicated to promotions (e.g. sales promotion), equal to 50,000 units. Laura, the regional brand manager of Oasis is developing her marketing plan for 2011 and your team is asked to help design the optimal marketing budget allocation for that year. Marketing Plan for 2011 The regional brand manager is planning to increase OASIS sales by 10% next year. The brand manager knows allocation of marketing resources is critical for the success of OASIS. Therefore in order to support her planning, one of her assistants expert in marketing modeling developed a sales response statistical analysis showing the following elasticities for each marketing activity. Table 2 shows elasticities of each marketing activities. For example, if the company decides to reduce price in 1% the effect of this decision on sales would be the price elasticity times the price reduction objective, -1% x -1.734 = 1.734, which means that sales will increase by 1.734%. Marketing Planning in Consumer Packaged Goods Market Oasis juices have been on the Canadian market since 1979. The brand prides itself for offering 100% pure and healthy juices. With a wide offering with multitude of formats and delicious flavours, Oasis brand aims to satisfy every taste, no matter the age. The company behind Oasis juices, A. Lassonde Inc., strives to be a Canadian leader in the development, production, and marketing of an innovative and distinctive range of fruit and vegetable juices and drinks. It was founded in 1918 in the heart of the Montrgie region in Quebec. Today, A. Lassonde Inc. markets its products in every Canadian province. The company has production and warehousing facilities that include two plants in Rougemont, Quebec; two plants in Ontario, one in Ruthven, one in Toronto, one in Port Williams, Nova Scotia and one in Calgary, Alberta. Assume that you are part of the marketing team for Oasis that is in charge of the marketing program and marketing budget allocation for your province. The allocation of resources for the current year is as follows