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please solve step 2 only Scenario You will assume that you are the brand manager at a Chicago based company that makes better-for-you cookies. The
please solve step 2 only
Scenario You will assume that you are the brand manager at a Chicago based company that makes better-for-you cookies. The company currently has one brand called Oaties. Oaties is a brand of oatmeal cookies with different flavors. You are selling directly to Whole Foods, which will carry your product in all its Midwest stores. In other words, your distribution channel includes a retailer only. Your product comes in a box of 20 cookies. You are currently evaluating the launch of a different brand of cookies that will be higher in protein. Your goal is to evaluate the financial impact of launching this new brand. To make this evaluation you need to decide on a retail price for the new product, estimate how many units you will sell of the new product, and estimate the effect of cannibalization. The financials for the old and the new product that you start with are the following: Step 1. Calculating your selling price and unit contribution You first need to decide on the retail selling price for your new product. It can be the same as, or higher or lower than the price for your existing brand. Keep in mind that the new product will be slightly more expensive to make due to more expensive ingredients. Please add an explanation for your decision (1-2 sentences will be sufficient). Once you have decided on your retail price, you can calculate the price at which you will sell it to your retailer using the channel partner's margin, and your unit contribution based on your selling price and the COGS per unit. Step 2. Sales Forecast for the New Product The unit sales forecast for 2022 for the existing product is already provided above. To calculate a sales forecast for the new brand for 2022, you need to estimate a sales forecast per month and then add up the monthly sales projections for a yearly sales projection. To complete the forecast, you need to make assumptions about the number of customers that will try this product every month, a repeat purchase rate, a purchase frequency, and how many units you think the average consumer with buy at a time. The table below provides an example of how you would organize the analysis for your sales forecast. You can either assume that the new customer number, the repurchase rate (95% in the example below), the average purchase frequency and the average purchase volume, is consistent from month to month or that these will change over time. While there are no right or wrong assumptions, you need to explain your thought process for making them (the calculations below are from Excel and minor inconsistencies are the effect of rounding). Keep in mind that the table above is just an example of the structure of this analysis. It will likely be reasonable with higher numbers of new customers each month given that you will be selling the cookies in all Whole Foods stores in the Midwest. Step 3. Calculating total contribution with and without cannibalization in the final step of your analysis, you will determine what the total contribution will be with and without cannibalization Step by Step Solution
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