Scenario You are the global marketing vice president at Dyson. You have been ask

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Scenario You are the global marketing vice president at Dyson. You have been asked to attend a meeting with James Dyson, the company's founder. Dyson's CEO and the head of Dyson's New Product Innovation department will also be in attendance. "Thanks for meeting with me today," James says. "Market intelligence has shown that our major competitors—Hoover, Shark, and Bissell—are all developing new cordless vacuum cleaners with a longer battery life than what's currently available." James Dyson looks to you: "I need you to participate in a new cross-functional product development team that will research the feasibility of creating a cordless vacuum cleaner that works for one hour on a single charge. We also need to know if there's even a market for this type of vacuum," he says. "We envision that this new vacuum will be used primarily in the home, but keep in mind, we want to be able to adapt it easily and cheaply for light commercial use. One way of doing this is by using swappable battery packs." Your financial analysis should include average unit cost, average unit price, number of units per batch, any outsourcing costs, a breakeven analysis, a sales forecast, and an expense forecast (including marketing and sales expenses). In addition, explain your schedule for implementation, the controls you intend to put in place, and how you intend to proceed (i.e., contingency plans) when your benchmarks are not met.

Explanation / Answer

This can be launched and implemented just before the Christmas season of the holiday season to attract attention and awareness

The schedule includes an initial pull marketing advert campaigns for 3 months, big bill boards with watch this space, and Radio and TV adverts

The 6 months can be a severe advert and marketing campaigns till the product climbs the growth stage and reaches the saturation stage

When the bench marks are not met, the incontinency plans would be to pause and redesign the development stage and re launch the sales campaign

Average Unit Cost = $300 300 Average Unit Price = $700 700 Number of Units per Batch = Economic Batch Quantity (EBQ) = 1250 Cost of Outsourcing = $115 Break even Analysis: Sales Forecast: 1250*700= 875000 Forecasted Expenses: Sales cost for selling the goods 75 Salary 2675 Sales and Marketing Expenses 105 Other expenses 25 Total expenses contributing to the unit cost of $300 2880 General and office Admin Expenses 1529 Tax on the payroll = 25% of Salary 668.75 Eearnings Before Interest and Tax 867042.25

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