Part 1:

You are a marketing consultant and have been asked to evaluate the following information regarding Product X and Product Y. The company has asked that you to stress NMC, MROI and profit in your analysis.

Part 2:

The brand managers of Product X and Y have each requested an additional $200,000 in advertising. You are able to grant only one of the requests. Based on your analysis, what would be your recommendation? What additional information would you need to make this decision?

	Product X Financials
	Actual	Planned
Retail Price	$4.00	$4.00
Retailer Margin	25%	25%
Wholesaler Margin	20%	20%
Raw Materials Cost	0.4	0.3
Direct Labor Costs	0.4	0.4
Energy/Fuel Costs	0.12	0.12
Sales Commission	10% of sales	10% of sales
Promotion Expense	10% of sales	10% of sales
Packaging	0.2	0.2
Fixed Manufacturing Costs	$250,000	$250,000
Advertising Expense	300,000	225,000
Customer Service Expense	125,000	100,000
Sales Salaries	80,000	80,000
Units Sales Volume	1,500,000	1,750,000
Total Market Sales	5,000,000 units	5,000,000 units
Market Growth Rate	12%	12%
Market Characteristics: Annual growth rate approximately 20%, increasing competition with expected margin price pressure within the next two years.

	Product Y Financials
Units Sales Volume	1,500,000	1,750,000
Total Market Sales	5,000,000 units	5,000,000 units
Market Growth Rate	12%	12%
Retail Price	$2.50	$4.00
Retailer Margin	20%	25%
Wholesaler Margin	20%	20%
Raw Materials Cost	0.4	0.3
Direct Labor Costs	0.4	0.4
Energy/Fuel Costs	0.12	0.12
Sales Commission	15% of sales	10% of sales
Promotion Expense	10% of sales	10% of sales
Packaging	0.2	0.2
Fixed Manufacturing Costs	$400,000	$250,000
Advertising Expense	300,000	225,000
Customer Service Expense	125,000	100,000
Sales Salaries	80,000	80,000
Units Sales Volume	1,500,000 units	1,400,000 units
Total Market Sales	5,000,000 units	5,000,000 units
Market Characteristics: Annual growth rate approximately 5%, highly competitive with increasing margin pressure as the result of price competition and increased customer service demands, and decreasing brand loyalty.