Bauer ProGlider Hockey Skates Peter is a marketing manager who works for Bauer, a manufacturer of...

   

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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.

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Breakeven Target Market share for the ProGlideR BREAKEVEN in units FIXED COST CONTRIBUTION MARGIN ... View the full answer