Consumer Promotion Month 2006

Budget allocated to Net incremental ROI in consumer

RBS contribution promotion(%)
Jan 398580 63852 16%
April 174643 22785 13%
June 253390 50615 20%
Sept 253390 60820 24%
Total 1080003 198072 18%

Trade Promotion 2006

Allocated trade Net incremental Incremental sales
budget contribution 2006 in '000
Jan-feb 619562 5728
April 59117
-902
May June 215729
Aug Sept 486221 9192
Oct dec -30331 -2292
Total 5938000 1350298
ROI 22.74%

Notes
1 As seen in the tables above, consumer promotion has given maximum return in September in
2 Trade promotion has given the maximum return in AUG-SEPT in 2006 due to the promotion o
3 Even though there was consumer promotion in May - June, Sales in 2006 dipped in May -June
4 Oct - Dec witnessed maximum dip. This was again due to no trade promotion during this perio
5 Trade promotion has given a higher return (22.74%) as compared to consumer promotion(18.
6 Hence, it can be concluded that trade promotions play a significant role in determining the sa
eturn in September in 2006 (24%). This has been due to the 2 page advertising ( $ 1.5 cash refund on proof of purchase of all th
ue to the promotion of the three boxes via 1w/11.
6 dipped in May -June. This was due to no trade promotions of 1 lb box.
otion during this period.
nsumer promotion(18.34%)
in determining the sales.
n proof of purchase of all the 3
Trade Promotion

8oz 1lb 5lb

Month Units Unit Cost Cost Units Unit Cost Cost Units Unit Cost Cost
Jan-Feb 11 3.38 37.18 39 5.58 217.62 11 24.8 272.8
April 248 7.77 279.57 473 58.59 4018.29
Aug-Sep 11 3.38 87.69471 41 5.58 525.89 11 24.8 656.55
Nov-Dec 150.50 58.59 881.76
Total Cost
527.6 1 w/11
4297.86 Coupon 10% OI+ 5%ad
1270.14 1 w/11 + 5%ad
881.76 10% OI
6977.349
Year 2005 2006 2007
Manufacturer's Price per case
8 oz. 6.18 6.37 7.2
1 lb. 10.33 10.64 12.02
5lb. 46.63 48.03 54.28
Factory Shipments (in 000's of cases)
8 oz. 640 793 714
1 lb. 1099 1362 1226
5lb. 581 720 648
Variable Manufacturing Cost Per case
8 oz. 3.02 3.05 3.38
1 lb. 4.98 5.03 5.58
5 lb. 22.12 22.34 24.8
Gross Sales 42,400 54,125 55,051
Variable Manufacturing Costs 20,258 25,354 25,325
Gross Margin 22,142 28,770 29,726
Gross margin % 52% 53% 54%
Advertising
TV 2862 4,453 3815
Print 687 950 694
Internet 76 238 248
Total Advertising 3,625 5,641 4,757
PR/Media Production Costs 191 297 198
Consumer Promotion 424 1,080 551
Trade Promotion 4240 5,938 5505
Total Marketing Expenses 8,480 12,956 11,011
Profit before SG&A, Overhead and Taxes 13,662 15,814 18,715
% Profit 32% 29% 34%
2008 (Trade Promo.) 2008 CAGR 7.94%

7.77
12.97
58.59

714
1226
648

3.38
5.58
24.8
59,420
25,325
34,096
57%

3815
694
248
4,757
198
551
6977.35
12,483
21,612
36%
1 Promote Trade promotion over consumer promotion
2 1.5 $ refund for purchase of 3 brands is most effective consumer promotion
3 For 8 oz, and 5 lb, 10 OI along with 5 % advertising is most effective trade promotion
4 For 1 lb 1w/11 is the most effective trade promotion
5 Considering response of consumer promotion in 2006 ( 2%, 4%, 7%, 2.5%; it can be inferred that consum
6 Also customer did not recall the price of RBS, to incentivise customer a visible gift (free goodies) must be

Duration Consumer promotion Trade promotion

Jan - March Refund 1w/11
April Coupon 10% OI + 5% adv
Aug-Sept Sweepstakes and refund 1w/11
Oct- Dec Coupon 15% OI
er promotion
ctive trade promotion

, 7%, 2.5%; it can be inferred that consumer promotion is not penetrating in the market)
tomer a visible gift (free goodies) must be provided

on all product exhibit 8 & 9

8 oz and 5 lb
on all product
5 lb