Company U’s primary focus is creating products that create value and fill a need in growing markets – it currently has three products. SUSI is the lower quality offering which focuses on weight and volume, marketed towards Singles and Others who are the most price-sensitive and are projected to have the highest growth rates over the next five years. SULI is the high quality electronic offering, distributed primarily to Professionals and High Earners who are driven by performance and convenience. VUGO is a product that was created for the Followers segment of the Vodite market which is projected to have the largest growth over the next five years at over 3300%. Followers require a high performing product, but at an affordable cost. The company has differentiated its investment in advertising to focus consumer perceptions on the most valued attributes of the targeted markets for each product. In addition, Company U takes a keen interest in market research and boasts the largest sales force in the market, investing over $3M in the last two years to hire and train 149 sales representatives.
Products are sold throughout the three distribution channels – specialty stores, department stores and mass merchandisers with distribution to mass merchandisers increasing within the next five years. Sales by Year 10 are projected as follows, a 139% increase for SUSI, a 61% increase for SULI and increase for VUGO. Overall expenses for all products are estimated to be around 66% of total sales by Year 10 with total contribution margin for Sonite products expected to stay around 64% by Year 10 and 49% for Vodite. 2.0 Situational Analysis
Company U currently manufactures two products in the Sonite market, SUSI and SULI. The Sonite market consists of five major market segments. Both Sonite products are distributed in specialty stores, department stores and mass merchandisers. In Year 5, Company U broke into the Vodite market with product VUGO....
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