A$.$ Calculate the net marketing contribution for a firm that serves a market of about $10$ million sport enthusiasts, who buy in average $2\mathrm{.}5$ times per year and spend each time about $$20.$ The company has about $20\%$ market share. It sells directly to the customers through its website, and spends about $10\%$ of sales on advertising. The costs for shipping and handling are about $$2$ per order and the company has a gross margin of $50\%.$ Present your answer clearly.

Ans.: $$30$mil

B$.$ Yearly performance for Mina$$s World Company is presented in the table bellow. Should the company be concerned? Why or why not? As a member of the board of directors what do you advise the company to devote the attention to first of all?

Mina's World $($mil$.$$$)$ Year $201020112012$

Sales Revenue $251293341$

Cost of goods sold $115135167$

Gross Profit $136158174$

Mkg and Sales Expenses $738289$

General and Admin. Expenses $303541$

Other expenses $232624$

Pre$-$tax Profit $101520$

Financial metrics

Pre$-$tax return on sales $4\mathrm{.}00\%5\%6\%$

Sales$-$to$-$Assets Ratio $0\mathrm{.}90\mathrm{.}951$

Return on Assets $4\mathrm{.}40\%5\mathrm{.}30\%6\mathrm{.}00\%$

Marketing Metrics

Market Growth $20\mathrm{.}50\%22\mathrm{.}50\%21\mathrm{.}50\%$

Sales Growth $15\mathrm{.}30\%16\mathrm{.}70\%16\mathrm{.}40\%$

Market share $10\%9\mathrm{.}30\%8\mathrm{.}10\%$

Customer Value $282516$

Customer Satisfaction $787264$

NMC $($MIL $$)$

MKT ROI

MKT ROS

C$.$ SweetJuice Inc. would like to streamline their product line to become more efficient. What do you recommend to them? Anything that they should be aware of$,$ that an experienced marketing manager could advice? Is there any insight that they would gain from computing NMC$?$

Sweet Juice

$($millions$)$ Cherry Blueberry Blackberry Apricot Company

Total

Sales Revenue $55201513103$

Cost of goods sold $35109862$

Gross Profit $20106541$

Operating Expenses $1387533$

Net Profit $72-108$

D$.$ Calistro currently operates in a market that has been estimated to have about $5$ mill. customers and it is estimate that it has a market share of $8\%.$ The average customer purchase is of $$100$ per year. The gross margin of Calistro is of $60\%$ and the company$$s current budget allocates $$12$ mil. for marketing and sales expenses. The marketing team debates two options:

$1)$ to create a marketing campaign to show the benefits of the Calistro products compared to competitors in order to increase the market share to $10\%.$ The estimate is that the campaign would cost about $$2$ mil. extra.

$2)$ to allocate an extra million to the sales team in order to increase the sales per customer by $5\%($gross margin would remain the same $\%).$

As Calistro$$s CMO, which initiative would you support and why? For full and partial credit show your work clearly!