Marketing Strategy Recommendations & Financial Projections

Include the title of the case ?Green Ox? and your name at the top of the first page.
There are three parts to this assignment. It is worth a total of 20% of your course grade.
Application of marketing concepts is part of the grading.

Assume that Green Ox?s key performance objective is to maximize profit. Note carefully the SWOT

analysis discussed in class Tuesday. Your recommendations must be consistent with the SWOT

analysis.

(A) (approximately one page to a page and a half)
Prepare a bulleted, point form list of your marketing strategy recommendations for the launch of

Green Ox. Structure your recommendations using the main bulleted headings below. Include a brief

rationale (justification; explain why) for each recommendation and where appropriate apply relevant

basic marketing concepts. Your marketing strategy recommendations should include at a minimum the

following.
? Target market with detailed profile
o Note: assume that for the launch year you are competing only in the sports drink market although

the case indicates that sports drink consumers may also take pills and drink V7
? Product strategy
o Brand name (you don?t have to stick with Green Ox, but either way justify your brand name)
o Product line (how many and which flavors ? and why)
o Product positioning statement – structured as follows.
? For (descriptive name for your target market), Green Ox is the brand of Sports Drink that is [key

attribute(s); point of difference; what distinguishes them from competition] among [who are their

direct competitors for positioning purposes] because they [reason to believe; state evidence that

the product can deliver the benefit that is its point of difference within its frame of reference].
? Pricing strategy
o (new product) pricing strategy and your actual mnft. price as well as MSRP (see Revised Table 2

appended below); note that price elasticity should influence your pricing, therefore you should

provide some analysis and use that information as part of the rationale for your prices.
? Channel strategy
? Promotion strategy
o Promotion mix
o Budget (calculate your total promotion budget using $10M per flavor based on the number of

flavors you decide to launch; note that is just how the total promotion budget is calculated and

does not mean you should allocate $10M to each flavor; e.g. if you launch 3 flavors your total

promotion budget will be $30M), also explain your allocation of the promotion budget by promotional

mix element and your advertising portion of that total budget allocated by media
o Message strategy (advertising appeal, slogan, & brief description of message content); your

message strategy must be consistent with your positioning strategy

(B) (approximately one half page ? see format next page)
Prepare a pro forma income statement for the launch year based on your recommendations. Include a

footnote briefly explaining how you developed your sales forecast. For cost of goods sold, assume

the unit variable cost given in the case. Note that marketing (promotion) fixed expenses are $10

million per flavor launched as explained above, but there is also $30M in additional fixed costs

(overhead etc.) x the number of flavors introduced and those fixed costs must be included in your

pro forma statement. So, for example, if you launch three flavors, your marketing (promotion)

budget is (3 x $10M) $30M and there will be an additional (3 x $30M) $90M in ??other? fixed costs.

Note carefully Tuesday?s class discussion of the SWOT analysis for Green Ox. Your sales forecast

must be realistic and must be consistent with the SWOT analysis. Appended to these instructions is

a revised Table 2 that replaces Table 2 in the case.

(C) Worth 15 out of the total 200 points (three or four lines)
Provide a breakeven analysis based on your budgeted total fixed costs. Calculate the number of

bottles you must sell to break even, both in bottles sold and in market share of Sports Drink

market. Show all your calculations.
Note: Breakeven in units = Total Fixed Costs / (unit price ? unit variable cost)

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Revised Case Table 2

Predicted Green Ox Trial Rates (aka market share) Among Sports Drink Consumers
(For Various Numbers of Flavors Offered)

Retail Price*
Per Bottle Mnft. Price
Per Bottle If Five Flavors,
Market Share is? If Four
Flavors If Three
Flavors If Two
Flavors If One
Flavor
$1.19 $0.79 8% 6% 4% 2% 1%
$0.99 $0.66 15% 11% 7% 3% 1.5%
$0.79 $0.53 20% 15% 10% 5% 2.5%
$0.59 $0.39 22% 16% 11% 6% 3%
$0.39 $0.26 25% 18% 12% 7% 3.5%
* Case table 1 indicates retailer margins or markups ranging 33% – 50%. Assume the retailer markup

is approximately 50% on Sport Drinks. For example, if the manufacturer price to retailers is $0.66,

then retailers add 50% to that ($.33) to arrive at a retail price of $0.99.

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Example format for pro forma income statement

Pro forma Income Statement for Launch Year ? Green Ox

Sales revenue $XXXXXXX (1)
Less COGS $XXXXX
Gross Profit $XXXXXXX

Fixed Marketing Costs:
mix element 1 xxxx
mix element etc. xxxx
ad ? media 1 xxxx
ad ? media 2 xxxx
Total fixed marketing costs $XXXXX
Other Fixed Costs $XXXXX
Total Fixed Costs $XXXXX

Net Income Before Tax $XXXXXXX

(1) Note 1: Briefly explain how you derived your sales forecast.

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