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Abe Rio

on 5 December 2011

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Transcript of GatorGum

Gum of the past... PointsOF
Failure DisContinue prime Perform recover Threats Weaknesses Strengths Opportunities Year 1 how? Break Even Year 2 Market Re-entry 400 million 6 months 800 Million $200 Million $800 Million 4 P's Product Strategy
distinct long lasting flavors
Place Strategy
sell in tandem with G-series products
Price Strategy
bundle discounts
Promotion Strategy
76% of target market participates in running questions ? Appendix A: Assumptions We assumed that the variable cost of producing one unit of GatorGum will be approximately $1.00.  We used this number in all our calculations.
We assumed a cost of $200 million for equipment, events, and promotional coupons. This is based on prices for new chewing gum manufacturing equipment and the promotional events (5K and half-marathon runs and promotional coupons).

In order to calculate the total market size, we assumed that 52% of the United States population purchases Gatorade when buying a sport drink. Of those consumers, 53% said that they suffer from “dry-mouth” while exercising. Of those, 53% said that they would chew gum to prevent this from happening. From there we assumed that only 75% of that segment would actually purchase GatorGum. Assuming a US population of 307 million, we got our final answer of approximately 33 million potential customers. We also assumed that each customer would buy about 12 packs a year, based on how frequently they said they exercised in our survey.

Appendix B: Fixed Costs Product/Service Cost Equipment Floor space Initial promotions/marketing Initial promotions/marketing Initial promotions/marketing Total Fixed Costs $106,000,000 $42,000,000 $31,000,000 $15,000,000 $6,000,000 $200,000,000 Appendix C: Calculations Break-even Calculation:
First Year Fixed Costs= 200 million
Revenue per unit= $1.99
Variable Cost per unit= $1.00

------------------ = 202,020,202

Break-even point at 2.02 million units

Potential Market Size Calculation:

307 Million X 52% who buy Gatorade = 159,640,000
159,640,000 X 53% suffer from dry mouth while exercising= 84,609,200
84,609,200 X 53% who would chew gum to prevent dry mouth= 44,842,876
44,842,876 X 75% who say they would buy GatorGum and actually would= 33,632,157
Appendix D: Research Appendix D: Research Continued
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