case study analyze and list the critical strengths and weaknesses of Cowgirl Chocolate marketing homework help

case study analyze and list the critical strengths and weaknesses of Cowgirl Chocolate marketing homework help

Discussion Questions

1. Please analyze and list the critical strengths and weaknesses of Cowgirl Chocolates? Do you believe the weaknesses can be overcome by the strengths of the business? Why or why not? (20 points)

2. Please comment on Marilyn’s current promotional efforts. In order for Marilyn to increase the sale of her chocolates, should she use a push or pull marketing? Why? (20 points)

3. For a small business like Cowgirl Chocolates, what benefits and/or potential problems does a Website offer? If Marilyn insists on emphasizing on promotion through her website, please list your recommendations to her. (20 points)

4. Use information in Exhibit 5, attempt to compute the breakeven revenue for three different conditions: (1) assumes Marilyn wants to cover only the annual fixed costs through operations, and without paying a salary for herself; (2) assumes Marilyn wants to cover the annual fixed costs, and charges a modest $30,000 in salary and benefits, to cover her cost of inventory, her previous year’s loss and some other personal expenses; (3) assumes Marilyn can manage to cut the Cost of Sales by 10%, and she wants to cover the annual fixed costs and charges a modest $30,000 in salary and benefits. (20 points)

Hints: The key is to identify fixed and variable costs from Exhibit 5, because

Breakeven Sales Revenue = Fixed Operating Costs/ 1 – (Variable Costs/Net Sales)

You may opt to provide detailed explanations, justifications and computation step by step. This will help you to earn partial points.

5. Please attempt a “percentage of sales” pro forma analysis and conduct a Cowgirl Chocolates Financial Forecasts. (20 points)

Marilyn has two proposals (A and B) for her business expansion in 2001. Proposal A is a modest one. The numbers in column 1 and column 2 of Table 1 can be rationalized by simply assuming that Marilyn is successful in obtaining a large regional or national distributor contract that would yield $140,300 in sales. Please study the % numbers and the $ values carefully to understand the rationale and inter-relationship among these numbers. Then, try to finish the unknown ?%s and $?s for Proposal B in column 3 and column 4, for which Marilyn is attempting to achieve an ambitious $300,000 in sales.

After you finish your computation, just replace the ?%s and $?s in the table with your answer. During the process, please make your reasonable assumptions. It is recommended to think about some basic ?%s, define them first, and then finish the computation for the $?s. Your recommendation will help Marilyn to make the final decision for business development. For your ease, some numbers are provided already.

Hints: Besides filling the unknowns, you may opt to provide additional explanations, justifications and computations to me in writing. This will help you to earn partial points.

Table 1. Cowgirl Chocolates Financial Forecast with Assumed National Contract and in Operating Improvements in Operating Cost Percentages

Revenue

2001

% Of

2001

% Of

Proposal A

Sales

Proposal B

Sales

Column 1

Column 2

Column 3

Column 4

Product Sales

$122,000

85%

$255,000

85%

Miscellaneous Income

$18,300

15%

$?

15%

Total Net Sales

$140,300

100%

$300,000

100%

Cost of Sales (shipped portion of Choc,Caramel, Packaging, and Printing)

$56,120

40%

$?

?%

Gross Margin

$84, 180

$?

(% Gross Margin)

60%

?%

Operating Expenses

Advertising/Promotion

Trade Shows

$7,500

$?

Web site

$1,500

$?

Subtotal, Advertising And Promotion

$9,000

6.40%

$?

?%

Travel

$14,030

10.00%

$?

?%

Miscellaneous

$2,806

2.00%

$?

?%

Payroll Expense/Benefits (@20%)

$23,000

Marilyn’s salary

$30,000

Marilyn’s salary

Shipping and Postage

$18,300

15% of product sales

$?

15% of product sales

Insurance, Lawyers, Prof. Memberships

$2,525

1.80%

$5,400

1.80%

Brokers

$4,209

3.00%

$6,000

2.00%

Office Expenses (phone, supplies, photography, taxes)

$4,209

3.00%

$9,000

3.00%

Total Operating Expenses

$78,079

$?

Grand Total All Expenses

$134,199

$?

Profit Before Interest and Taxes

$6,101

$?

Taxes Incurred (Credit @18% -approx tax rate)

$1,098

$?

Net Profit After Taxes

$5,002

$?

(Net Profit After Taxes / Sales)

3.57%

$?