IM.6: International Market Profit Potential & Risk (see Figure 30)

Analysis Scale
Millions
Year 1 2 3 4 5
Market Demand
76
Market Growth Rate
6.5
%
Market Share Objective
0.5
%
1.0
%
1.5
%
2.0
%
2.5
%
Volume Sold
1.5
0.5
0.5
0.4
0.2
Average Consumer Price
$80.00
$
$80.00
$
$80.00
$
$80.00
$
$80.00
$
Channel Expenses (% Price)
65.0
%
50.00
30.00
25.00
75.00
Company Net Price
60.0
25.0
15.0
10.0
15.0
Sales
1.5
0.5
0.5
0.4
0.2
Cost per Unit
$16.00
$
$16.00
$
$16.00
$
$16.00
$
$16.00
$
Percent Gross Margin
24.0
10.0
7.5
2.5
4.5
Gross Profit
1.5
0.5
0.5
0.4
0.2
Marketing & Sales Expenses ($)
$12.0
$
$10.0
$
$10.0
$
$10.0
$
$10.0
$
Marketing & Sales Expenses (% sales)
15.5
6.0
5.5
1.0
2.0
Net Marketing Contribution
5.5
2.0
3.5
-1.0
0.0
General Administration (% sales)
4.5
%
4.5
%
4.5
%
4.5
%
4.5
%
General Administration (dollars)
0.5
1.1
1.8
2.6
3.4
Operating Income
182
150
275
67
80
Discount Rate
30.0
%
Present Value Factor
182
150
275
67
80
Present Value
182
150
275
67
80
Profitability & Risk Metrics
Net Present Value
182
Internal Rate of Return
43
%
Return on Sales
182
150
275
67
80
Breakeven Market Share
182
Marketing ROI
182
150
275
67
80
Starting Data Scale
Millions
Year 1 2 3 4 5
Market Demand
76
Market Growth Rate
6.5
%
Market Share Objective
0.5
%
1.0
%
1.5
%
2.0
%
2.5
%
Volume Sold
1.5
0.5
0.5
0.4
0.2
Average Consumer Price
$80.00
$
$80.00
$
$80.00
$
$80.00
$
$80.00
$
Channel Expenses (% Price)
65.0
%
50.00
30.00
25.00
75.00
Company Net Price
60.0
25.0
15.0
10.0
15.0
Sales
1.5
0.5
0.5
0.4
0.2
Cost per Unit
$16.00
$
$16.00
$
$16.00
$
$16.00
$
$16.00
$
Percent Gross Margin
24.0
10.0
7.5
2.5
4.5
Gross Profit
1.5
0.5
0.5
0.4
0.2
Marketing & Sales Expenses ($)
$12.0
$
$10.0
$
$10.0
$
$10.0
$
$10.0
$
Marketing & Sales Expenses (% sales)
15.5
6.0
5.5
1.0
2.0
Net Marketing Contribution
5.5
2.0
3.5
-1.0
0.0
General Administration (% sales)
4.5
%
4.5
%
4.5
%
4.5
%
4.5
%
General Administration (dollars)
0.5
1.1
1.8
2.6
3.4
Operating Income
182
150
275
67
80
Discount Rate
30.0
%
Present Value Factor
182
150
275
67
80
Present Value
182
150
275
67
80
Profitability & Risk Metrics
Net Present Value
182
Internal Rate of Return
43
%
Return on Sales
182
150
275
67
80
Breakeven Market Share
182
Marketing ROI
182
150
275
67
80
Comments: