Warner-Lambert Ireland: Niconil Case Study Solution
Sales Forecast
The projected income statement is generated along with the calculation of cost of goods sold calculation. It is assumed that the sales revenue would be increasing year to year by the significant margin of 10%. Also, the cost of goods sold includes purchase of ingredients, packaging cost, transportation cost, utilities, wages and other direct expenses. The operating expenses includes salary expense, marketing expense, insurance, office utilities and rent. The calculations can be seen in Appendix C.
Promotional Strategy
The promotion mix and marketing communication mix comprise public relation, personal selling and others. In public relation, the company would use Buzz marketing by using the doctors or opinion leaders, the written articles would help the company in creating the awareness of Nicol in along with its benefits. The company should also arrange seminars under the anti-nicotine awareness programs.In personal selling, the company can arrange temporary selling booth at hospitals, super stores and campuses.
In addition to this, the company should push the support program, because it would increase the potential sales of products, hence leading to the greater rate of success for the product in the market. Furthermore, the company should create an official Nicol in website and blogger outreach strategy, which would allow the company to work with bloggers who will create authentic and genuine content in order to promote the product among customers. Also, the company should place the fact sheet of Nicol in in the Dr’s offices and hospitals.
Appendix A
| Target market and demand | ||||
| Total population of Ireland (2018) | 4803748 | |||
| Total number of current smokers in Ireland | 1104862.04 | |||
| Smokers | Quitters | Never smoked | ||
| 23% | 28% | 49% | ||
| 1104862 | 1345049.44 | 2353837 | ||
| 10% buy a smoking cessation product each day | 134504.944 | |||
| 50% who might buy Niconil in year 1 | 67252.472 | |||
| 60% buy a second pack | 40351.4832 | |||
| 25% buy a third pack | 10088 | |||
| Total demand for year 01 | 117692 | |||
Appendix B
| Pricing | ||
| Proposed price | Premium price | |
| Price to customer | 35 | 65 |
| Less: retail dispending fee | 2 | 2 |
| Retail price | 33 | 63 |
| Tax (25%) | 8.25 | 15.75 |
| Retail markup (50%) | 16.5 | 31.5 |
| Manufacturer price | 8.25 | 15.75 |
| Variable cost | 4 | 4 |
| Manufacturer gross margin | 4.25 | 11.75 |
Appendix C
| Projected income statement | Base Year | Projected years | ||
| Operating revenue | BY | P1 | P2 | P3 |
| Sales revenue | 4119214 | 4531135 | 4984249 | 5482674 |
| Less: cost of goods sold | 485000 | 518850 | 555161 | 594116 |
| Gross margin | 3634214 | 4012285 | 4429088 | 4888558 |
| Less: operating expenses | ||||
| Salaries | 80000 | 88000 | 96800 | 106480 |
| Marketing expenses | 300000 | 330000 | 363000 | 399300 |
| Office utilities and rent | 100000 | 105000 | 110250 | 115762.5 |
| Insurance | 200000 | 204000 | 208080 | 212241.6 |
| Total operating expenses | 680000 | 727000 | 778130 | 833784.1 |
| Income from operations | 2954214 | 3285285 | 3650958 | 4054774 |
| Estimation of GOGS | Base Year | Projected years | ||
| BY | P1 | P2 | P3 | |
| Purchase of ingredients | 200000 | 216000 | 233280 | 251942 |
| Packaging cost | 120000 | 129600 | 139968 | 151165.4 |
| Transportation cost | 50000 | 52500 | 55125 | 57881.25 |
| Utility | 50000 | 52500 | 55125 | 57881.25 |
| Wages | 40000 | 42000 | 44100 | 46305 |
| Other direct expense | 25000 | 26250 | 27562.5 | 28940.63 |
| Total cogs | 485000 | 518850 | 555161 | 594116 |
Appendix D
| Target market | Pricing strategy | Positioning strategy | Promotion |
| Current Irish smokers | Proposed pricing strategy | Low or no side effects
Psychological component Transdermal treatment Easy to use |
Buzz marketing
Seminars under the anti-nicotine awareness programs Written articles push the support program Official Niconil website Blogger outreach strategy Place fact sheet of Nicol in in the Dr’s offices |
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