Marketing Case Assignment

Instructions: In a simplified, direct-response, fashion to ADVANCED MATERIAL'S SBU Executive Oversight Group by clarifying the six specific matters sought by the panel, articulated below in the following items.  LIMIT your responses for all six items to the FIRST PAGE of your report--supported by EXHIBITS [which follow on] as you see fit to help substantiate your calculations or to show arguments in support of your conclusions/recommendations.  

Questions to be considered and responded to in the Nundies Case.

[1] What is the situation facing ADVANCED MATERIALS with respect to Nundies in Jan08?

Here you might want to consider wholesale sales [omitting 285 units sold on-line] and total contribution to overhead.  And weigh these income values to [a] the summation of expenses for product and process [manufacturing] development, marketing research, launch, etc. in the first year; and [b] the installed capacity to manufacture 100,000 liners [or, put differently, 20,000 packages. 

[2] What is the break-even [BE] for ADVANCED MATERIALS assuming annual marketing and manufacturing overhead expenses that are currently and expected to remain at $400,000?

Here [and for all subsequent items in this assignment] you should assume that ADVANCED MATERIALS has decided to allocate NO funds in the foreseeable future to consumer advertising of any sort; promotion dollars such as they exist is solely directed at selling to the trade. 

[3] What is the market share that ADVANCED MATERIALS would need to BE if the sales potential for disposable liners is 8,000,000,? 

[4] Is selling Nundies to consumers via the internet a viable option for ADVANCED MATERIALS?  Explain, briefly how effective this “channel” might be viewed to work in the first three years of Nundies brand life. 

[5] Assess the overall merit of the Nundies diversification venture in the light of what’s necessary to be successful from the ADVANCED MATERIALS corporate executives POV.  What’s your advice to them regarding Nundies?  Justify briefly.

To be viewed in a favorable light, an SBU such as Nundies is expected to throw-off an expected minimum ROI of 25% with respect to the annual allocated overhead expenses noted in Item #2.

[6]  What’s your advice to ADVANCED MATERIALS regarding the Nundies SBU?  Justify briefly.