Projecting Anticipated Earnings for a New Half-Gallon Cherry Vanilla Ice Cream
We must first decide who our target market is before we can anticipate sales and costs for this new product. Our profit margin equals 100% less the cost of goods sold divided by the selling price. Your selling price must be $20 before any discounts or other costs are considered.
We must first decide who our target market is before we can anticipate sales and costs for this new product. Our profit margin equals 100% less the cost of goods sold divided by the selling price. Your selling price must be $20 before any discounts or other costs are considered.
We must first decide who our target market is before we can anticipate sales and costs for this new product. To achieve this, we must first decide how many units to produce and which market segment will most likely buy our product.
We can estimate the total cost of producing these units once we’ve decided who our target market is and how many we want to produce. This includes all expenses related to producing the product (labour and materials) and all expenses related to marketing and distribution (advertising, packaging design, etc.).
After figuring out these expenditures, it’s time to project sales! Our profit margin equals 100% less the coequals sold divided by the selling price if we sell all our products at the total retail price without a discount.
Thus, your selling price must be $20 before any discounts or other costs, such as overhead or transportation, are considered if you want to profit $10 on each unit sold (which would be regarded as “good”). If you intend to heavily mark down your goods to ensure that they sell quickly—or, better yet, if you intend to sell.
Examples:
I would forecast that my sales would increase by 10% and my costs would increase by 5%. For example, if I sold 100 “units of” my “product at $10 per unit,” then my total sales would be $1,000.
If I sold 110 “units of” my “product at $10 per unit,” then my total sales would be $1,100.Similarly, if my costs were $500, my total would be $525 if I produced 110 product units.
References
Neelamegham, R., & Chintagunta, P. (1999). A Bayesian model to forecast new product performance in domestic and international markets. Marketing Science, 18(2), 115-136.
Dean, J. (1969). Pricing pioneering products. The Journal of Industrial Economics, 165-179.
Blattberg, R., & Golanty, J. (1978). Tracker: An early test market forecasting and diagnostic model for new product planning. Journal of Marketing Research, 15(2), 192-202.
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Question 
Projecting Anticipated Earnings for a New Half-Gallon Cherry Vanilla Ice Cream
Your firm is in the business of making food items, primarily desert-type products—the firm plans to launch a new product, a half-gallon size of cherry vanilla ice cream. The firm has never produced ice cream before. Your job forecasts the anticipated earnings (i.e., projected revenues, fewer costs) over the next seven years. How would you forecast your sales and your costs for this new product?
Your discussion post must be 5-6 paragraphs in length, and it must be substantial. You need to pull in information from the chapter we read this week.