Your internal records and past research suggest that your current target market consists of 118 million US households. You further learn that 38% of the 118 million target households will have tried your other two products (sticks and fillet) by the time you launch burgers. Hence, they will be familiar with your brand and the value you offer.

Your internal research shows that given the strong following your current products have, existing customers of sticks and fillet are more likely to attend to the new product advertising from your company. As such, awareness of the new product among your sticks and fillet users is expected to be twice as high as for non-users: roughly 44% for users and 22% for non-users.

Your primary research with 600 households in the target market involved a concept testing exercise. Specifically, respondents (a) saw the picture of the product and packaging, and (b) read a description of the product. Based on these two stimuli, they were asked to indicate their likelihood to purchase these plant-based fish burgers at a retail price of $6.35. The table below provides the purchase likelihood data obtained through this research.

Likelihood to purchase the new burger product	Users of your sticks and fillet products (n=220)	Non-users of your sticks and fillet products (n=380)
Definitely would buy	50%	33%
Probably would buy	66%	19%

Your experience with the fillet and sticks products has taught you that many people offer a socially desirable response during surveys. Such responses result in people often inflating their purchase likelihood/intentions.

In your experience, 60% of the respondents who indicate that they definitely would buy and 45% of those who indicate that they probably would buy actually end up buying the new product.

The survey also showed that, of the households who would actually buy the product, each would buy 1.6 packs on average as a trial purchase. Based on prior experience, company management expects that 38% of sticks and fillet consumers who buy the new burgers would become repeat purchasers, whereas only 20% of the non-users of sticks and fillet products who buy new burgers would become repeat purchasers. Repeat purchasers are expected to purchase 1.3 additional packs on average during the first year. The supply chain for this product will be: Nature Inc Retailer End consumer. The Retailer margins are 30% and total variable costs per unit for Nature Inc. are expected to be $ 3.63.

The CEO, CMO, and the finance chief want you to know that the company has already spent money ($600,000) to conduct pre-launch marketing research and their policy is to treat that expense as a fixed cost for Year 1.

Further, they are allocating $6.38 million for advertising for Year 1. Your past research suggests that this will produce 37% awareness overall.

For trade promotions, they are allocating $8.15 million for Year 1. A survey of supermarket buyers suggests that this amount should lead to an ACV of 48%. Your company spent similar amounts of the first two products and has been able to achieve ACV of 60% for those products in the short span of five years.

Given that you are a relatively young company, the primary financial concern of your senior management team with this new product introduction is breaking even.

They would like you to conduct a detailed financial analysis and answer the following questions for them:

How many units do we need to breakeven at the retail price of $6.35?

Are we going to breakeven at the current retail price of $6.35?

Given the current demand forecast, what should the minimum retail price be for us to breakeven?