Subject Market Based Management

Roger Best 6th Edition

Farm Fresh Milk Malaysia is a successful partnership business of a Malay and a Chinese entrepreneur. All its products are made from fresh milk, contain no preservatives and colorings, and are freshly bottled before being transported to the local supermarkets. After just 7 years since inception, the company now produces the bestselling fresh milk in Malaysia and its milky and creamy flavors are loved by many Malaysians. After experiencing a big success in the local market, Farm Fresh (FF) is ready to penetrate Brunei Darussalam (BDS), Malaysia's neighboring country with the smallest population, around 500000, but able to be one promising market for Farm Fresh in ASEAN market in 2022. Farm Fresh plans to export its milk and yoghurt products to Brunei in November 2021, to allow its marketing staff to make an early preparation before its launching date on 15th January 2022. Their products will be available in all supermarkets in Brunei starting on 1st January 2022. Farm Fresh will introduce UHT Milk of 200ml with a price of BND2.00, and Farm Yogurt of 120ml with a price of BND1.50 (the exchange rate for BDN1.00 = RM3.00). Based on the previous record, the current market demand for dairy products in Brunei Darussalam (BDS) is 20 million units in 2022. Farm Fresh expects to gain a market share of 8% in the year 2022. To successfully capture Brunei Darussalam market, Farm Fresh has to rely on the local channel distribution which cost them about 30% of the average price. 1) With the information given above, you need to calculate Farm Fresh total unit sold for 2022, average price of products, channel cost, net selling price, sales revenue, gross profit, net profit before tax, net marketing contribution (NMC), marketing ROS, and marketing RO1. Based on these calculations, fill up the missing data in the Marketing Profitability Metrics of Table 1 below. Table 1: Marketing Profitability Metrics Data for 2022 (in BND) 20 million units for each product Market demand Market Share 8% Total Unit sold per year Average Price for both items (actual) Channel Discount (30%) Average Net Selling Price (actual) Sales Revenue Percent margin 50% Gross profit Marketing & Sales expenses (MSE) 400000.00 General & Administrative expense (GAE) 100000.00 Other expenses 50000.00 Net Profit before tax Net Marketing Contribution (NMC) Marketing ROS Marketing ROI