Bauer ProGlider Hockey Skates Peter is a marketing manager who works for Bauer, a manufacturer of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Bauer ProGlider Hockey Skates Peter is a marketing manager who works for Bauer, a manufacturer of ice hockey equipment. Bauer plans to launch a new hockey skate, called "ProGlideR" throughout the USA. Peter claims that the ProGlideR are the most comfortable, and environmentally friendly pair of hockey skates for hockey players. The ProGlideR comes with high quality sustainable material, which include a different kind of padding, lightweight material, and specific blades. The retail price of the ProGlideR is set at $160. The market: Peter did some quick research and found that the US population is roughly 300 million people and the overall US retail market size for hockey skates is $1.93 billion. However, Peter obviously knows that not all people living the the U.S. will have an appreciation for the ProGlideR. The new skates will be primarily targeted at hockey enthusiasts, which are both men and women and make up 8% of the U.S. In addition, Peter believes that due to the lightweight material, the ProGlideR has a better chance of succeeding if it targets Junior hockey players (13-17 years old), which make up 30% of the U.S. hockey market. This target market also tends to grow fast, therefore changing their skates often. In fact, research shows that junior hockey players buy, on average, 0.8 pairs of skates per year. Production and Cost Information: Initial investment to expand the production facility with equipment is estimated at $1,300,000, and Bauer requires $145,000 for general overhead expenses. Peter estimates that the company will need to spend $400,000 on advertising to promote the ProGlideR in the first year, which will be used for billboards, radio, and print advertising. Peter expects 15% of the retail price to go for labor costs, 25% of the retail price for raw material and packaging expenses, and 5% of the retail price for transportation expenses. Finally, Bauer decides to first start selling the ProGlideR through a distributor rather than directly to retailers. The distributor expects contribution margins of 20% while retailers look for 25% contribution margins on figure skates. 2. [4 points] Given the information above, calculate the breakeven target market share for the ProGlideR if Bauer wants to breakeven in the first year after U.S. national launch (assume no price promotions). Please make your calculations clear. Bauer ProGlider Hockey Skates Peter is a marketing manager who works for Bauer, a manufacturer of ice hockey equipment. Bauer plans to launch a new hockey skate, called "ProGlideR" throughout the USA. Peter claims that the ProGlideR are the most comfortable, and environmentally friendly pair of hockey skates for hockey players. The ProGlideR comes with high quality sustainable material, which include a different kind of padding, lightweight material, and specific blades. The retail price of the ProGlideR is set at $160. The market: Peter did some quick research and found that the US population is roughly 300 million people and the overall US retail market size for hockey skates is $1.93 billion. However, Peter obviously knows that not all people living the the U.S. will have an appreciation for the ProGlideR. The new skates will be primarily targeted at hockey enthusiasts, which are both men and women and make up 8% of the U.S. In addition, Peter believes that due to the lightweight material, the ProGlideR has a better chance of succeeding if it targets Junior hockey players (13-17 years old), which make up 30% of the U.S. hockey market. This target market also tends to grow fast, therefore changing their skates often. In fact, research shows that junior hockey players buy, on average, 0.8 pairs of skates per year. Production and Cost Information: Initial investment to expand the production facility with equipment is estimated at $1,300,000, and Bauer requires $145,000 for general overhead expenses. Peter estimates that the company will need to spend $400,000 on advertising to promote the ProGlideR in the first year, which will be used for billboards, radio, and print advertising. Peter expects 15% of the retail price to go for labor costs, 25% of the retail price for raw material and packaging expenses, and 5% of the retail price for transportation expenses. Finally, Bauer decides to first start selling the ProGlideR through a distributor rather than directly to retailers. The distributor expects contribution margins of 20% while retailers look for 25% contribution margins on figure skates. 2. [4 points] Given the information above, calculate the breakeven target market share for the ProGlideR if Bauer wants to breakeven in the first year after U.S. national launch (assume no price promotions). Please make your calculations clear.
Expert Answer:
Answer rating: 100% (QA)
Breakeven Target Market share for the ProGlideR BREAKEVEN in units FIXED COST CONTRIBUTION MARGIN ... View the full answer
Related Book For
Posted Date:
Students also viewed these general management questions
-
Serena did some quick research and found that the U.S. population is 300 million people, and the overall U.S. retail market size for women figure skates is $2.2 billion. But Serena knows that not all...
-
New Day Bank plans to launch a new deposit campaign next week in hopes of bringing in from $100 million to $600 million in new deposit money, which it expects to invest at a 4.25 percent yield....
-
Mien Co. plans to launch its new product, the Nixit, in April of this year. The company is budgeting April sales of 53,000 units. Miens budget requires 6,000 units of Nixit in its finished goods...
-
To add new components or tools into the NetBeans IDE, one can use . a. The JFrame tool b. Plugins c. The PHP tool d. JavaFX
-
How are bonds and notes the same? How do they differ?
-
The MEP of the Otto cycle of Problem 9.1 is nearest: (A) 370 kPa (B) 410 kPa (C) 440 kPa (D) 475 kPa Figure 9.36 7in 9-0 dout
-
What are common-size financial statements and how are they used?
-
Dunstreets Department Store would like to develop an inventory ordering policy of a 95 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the...
-
The investments of Harlon Enterprises Included the following cost and fair value amounts ($ in millions): Fair Value, December 31 Equity Investments A Corporation shares Cost $ 20 2024 $ 14 2025 B...
-
Jenny Atkinson is reviewing employment offers. The employment offer from ILU, Inc. includes private health insurance that ILU, Inc. will purchase on her behalf. ILU Inc. will have to pay a $1,840...
-
While normally only quantitative outcomes are "formally" analyzed in capital budgeting decisions, nonfinancial factors (the number of accidents in a manufacturing plant or employee morale) are...
-
Vaughn Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $8.00 per pound $ 8.00 Direct labor-1.50 hours at $11.90...
-
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $124,000 in current E&P that accrue evenly throughout the year. At the beginning of the year, Lone Star's...
-
3. Suppose that the Phillips curve is given by: t = + a-but, where is the inflation rate, is the expected inflation, u, is the rate of unemployment and, a and b are two positive parameters. Suppose...
-
For the next fiscal year , you forecast net income of $48,600 and ending assets of $502,500. Your firm ' s payout ratio is 9.9%. Your beginning stockholders ' equity is $299,600, and your beginning...
-
Frank and Helen are not married. Helen has a child (Mary) from a prior relationship. (The father of Mary is deceased.) Frank and Helen have been living together for several months. After an argument,...
-
Question Time is discrete and denoted t = 1,2,3...00. The economy is populated by a sequence of two-period-lived overlapping generations. As usual, Nt denotes the number of people born in time t and...
-
(8%) Problem 6: A student attaches a f= 3.5 kHz oscillator to one end of a metal rail of length L = 25 m. The student turns on the oscillator and uses a piezoelectric gauge at the other end to...
-
Explain the purpose of the inventory turnover ratio .
-
Differentiate between market value and book value.
-
Comment on the various types of performance standards.
-
As long as human _________ exceed available _________, scarcity will exist.
-
The scarce resources that are used in the production of goods and services can be grouped into four categories: _________, _________, _________, and _________.
-
Well-defined property rights encourage a. investment. b. innovation. c. conservation. d. exchange. e. economic growth. f. all of the above.
Study smarter with the SolutionInn App