QUESTION 2

CONSUMER PROMOTIONS (Exhibit 7, 1st row of each table)

Event Time Type (p3, last paragraph) Cost
1 Jan-06 cash refund $ 398,580
2 Apr-06 coupon $ 174,643
3 Jun-06 twin pack + cash refund $ 253,390
4 Sep-06 cash refund + sweepstakes card $ 253,390
TOTAL $ 1,080,003

TRADE PROMOTIONS
2006 $ 5,938,000

(Exhibit 1)

ANSWER: With 23% ROI, trade promotions were more effective than consumer promotions (with only 18% ROI) in 2006.

2005 2006 2007E

$ 42,400,000 $ 54,125,000 $ 55,051,000

2005 2006 2007E

$ 2,320,000 $ 2,875,000 $ 2,588,000

Price Unit sales Revenue

 (Exhibit 7, 2nd row of each table)
7, 1st row of each table)
Net Incremental Contribution ROI
$ 63,852 16%
$ 22,785 13%
$ 50,615 20%
$ 60,820 24%
$ 198,072 18%

$ 1,350,298 23%

(Exhibit 9, last column for 2006)

motions (with only 18% ROI) in 2006.

Dollar sales growth (Exhibit 1, first number in each column)
2005-2006 2006-2007
28% 2%

Unit (case) sales growth (Exhibit 4, last row, total cases)

2005-2006 2006-2007
24% -10%
CUT OF MARKETING EXPENSES

2005 2006 2007E 2008

Manufacturer's price per case
8 oz
1 lb
5 lb
Factory shipments (in 000s of cases)
8 oz
1 lb
5 lb
Variable manufacturing cost per case
8 oz
1 lb
5 lb

Gross sales (in $000s)

Variable manufacturing costs (in $000s)
Gross margin (in $000s)

Advertising (in $000s)

TV
Print
Internet
Total advertising (in $000s)

PR/Media production costs (in $000s)

Consumer promotion (in $000s)
Trade promotion (in $000s)

Total marketing expenses (in $000s)

Profit before SGA, overhead & taxes (in $000s)

2008 target profit

(SGA = sales, general and administrative costs)

Notes for 2008 calculations (eg assumptions, rationale, implications)
PRICE INCREASE

2005 2006 2007E 2008 Notes for 2008 calculations (eg

Manufacturer's price per case
8 oz
1 lb
5 lb
Factory shipments (in 000s of cases)
8 oz
1 lb
5 lb
Variable manufacturing cost per case
8 oz
1 lb
5 lb

Gross sales (in $000s)

Variable manufacturing costs (in $000s)
Gross margin (in $000s)

Advertising (in $000s)

TV
Print
Internet
Total advertising (in $000s)

PR/Media production costs (in $000s)

Consumer promotion (in $000s)
Trade promotion (in $000s)

Total marketing expenses (in $000s)

Profit before SGA, overhead & taxes (in $000s)

2008 target

(SGA = sales, general and administrative costs)

Notes for 2008 calculations (eg assumptions, rationale, implications)
PRICE INCREASE + MARKETING EXPENSE INCREASE

2005 2006 2007E 2008 Notes for 2008 calculations (eg

Manufacturer's price per case
8 oz
1 lb
5 lb
Factory shipments (in 000s of cases)
8 oz
1 lb
5 lb
Variable manufacturing cost per case
8 oz
1 lb
5 lb

Gross sales (in $000s)

Variable manufacturing costs (in $000s)
Gross margin (in $000s)

Advertising (in $000s)

TV
Print
Internet
Total advertising (in $000s)

PR/Media production costs (in $000s)

Consumer promotion (in $000s)
Trade promotion (in $000s)

Total marketing expenses (in $000s)

Profit before SGA, overhead & taxes (in $000s)

2008 target

(SGA = sales, general and administrative costs)

Notes for 2008 calculations (eg assumptions, rationale, implications)