You are the new US marketing manager for Purity Vodka, which is a brand of organic vodka from Sweden. The product has been available in the US for a while but you have been hired to grow the brand. You are currently working on your marketing plan for 2018.

To convince the rest of the management team of the soundness of your strategy you need to analyze the financial aspects of it as well. In order to complete the analysis you have to:

a) determine a suggested retail price (MSRP) for the product (per bottle) b) forecast your sales volume c) select which promotional activities you will use.

The cost of manufacturing a 750 ml bottle is $12 dollars. Shipping, tariffs and distribution within the US is an additional $1.25 dollars per bottle. You will focus on selling directly to retailers such as Binnys, high end grocery stores and online specialty stores, and calculate that these expect a trade margin of 30 percent. You do not have to include overhead into your analysis. Keep in mind that the MSRP does not represent your own revenue per bottle.

The Market and Competitive Environment

The market for vodka in the US is competitive and includes both domestic and global brands. You have found a lot of useful data for the US market in the Passport database that will help you develop your marketing plan. You will be able to use information about the total size of the market and brand level market shares to put together your sales forecast.

Options for your promotional strategy

You have already researched a range of activities to include in your communication strategy. The table below lists the cost of each option. While you think all options are potentially valuable you realize that you may not be able to afford all. If you are going to use print advertising you need to determine if you are going to advertise in one or both magazines and also the size and number of ads you will use.

Activity	Cost (in dollars)
USA Trade Testing, all costs included	90,000
Sales rep (the cost is per sales rep., everything included)	50,000
Social media program (one fulltime employee)	40,000
Advertising in Saveur (only doing the other magazines.)	0
Advertising in Food and Wine(1/2 page Two Color 12x run)	66,400
Full page ad in the Gourmet Retailer (a trade magazine)	30,000
Billboards in select markets	2,200

What you will turn in You will turn in an analysis should include: a) a justification/explanation for your promotional and price strategies

b) a break-even analysis that shows the number of units you have to sell to break even given your selected promotional cost structure, your price, and the cost of manufacturing,

c) a pro forma income statement that is based on your price, your sales forecast and your costs, you should use information from Passport to calculate your sales forecast

d) a calculation of your gross margin. This is all the information given to me....