Financial analysis

Welcome to Module 7! In this module, you will get back into your marketing plan for your chosen product or service. Below is taken directly from the final project rubric. PLEASE, follow this. It will guide you on the two sections that are due. Thank you!V. Financial AnalysisAs a marketer, you need to justify your marketing activities no matter if it’s a promotional campaign or development of a new product or service. You achieve this by first having a solid understanding of the financial impact of your marketing initiative and then presenting your financial analysis in a well-structured manner using industry acceptable framework.In the financial analysis section, the first thing to show is sales (unit) and revenue ($) forecasts. Usually, this is done for a period of 3 to 5 years. You also need to show how much market share you are expected to get, and most importantly, illustrate its return on investment (ROI) using the Net Present Value (NPV) method. To help the management get a better idea about the feasibility of your marketing plan, a break-even (BE) analysis is often required. After all, nobody wants to invest in a new product or service that will only break even in 20 years’ time! To polish up your work, it is always a good idea to include a sensitivity analysis to show how these forecasts will be changed under various market conditions (good, normal, bad).In all, your Financial Analysis should consist of the following:1. Break-even analysis2. NPV (net present value analysis)3. Sensitivity analysis for good, normal and bad business scenariosVI. Pricing StructureDetermine the price you will charge. For your service, determine pricing (this may be based on an “average” price per service rendered). You must:• Demonstrate that your price allows reasonable profit in accordance with your profitability strategy (indicate this), allowing for your FC and VC that you determined in the preceding section.• Share the pricing strategy that you have selected, in accordance with those provided by our text author. What is your rationale for the pricing strategy selected?• Identify your total Year ONE Gross Revenues and projected Gross Profitability. Determine this for a three year window, based on reasonable projections. Does your pricing structure reflect volume discounts or other circumstances that might affect your revenue/profitability? • If you are using a channel of distribution, describe the profitability approach are you taking with your channel members to ensure appropriate profit at their end so that they will want to promote your product?• Weigh your pricing strategy with pricing currently offered by your competition. Consider how your proposed price fits into the target market and compares to the competition. Your pricing should allow for sufficient profitability to allow you to cover your essential fixed costs (FC) and variable costs (VC) on which you will want to reflect (but do not have to be listed).

Greetings,

I would like to propose a product that will dramatically increase sales in a short period of time. The product will mainly address the issues that have not been covered by competitors.

The Challenge

Since the invention of the chair, it has provided comfort for many. Companies like IKEA has been making furniture for the past century but it has always been lacking in providing absolute comfort for people who sit many hours and tend to slouch.

The solution

The product will address the problem that has failed to attract many competitors. It will be made of an easily morphable material but not to the extent of unwanted morphing. It will adjust to the structure of the human spine and line accordingly to provide the maximum comfort. Finally, the days of back problems while sitting long hours will be eradicated.

Product or Service Description

My company is situated in Seattle, Washington. My product functions as an application that synchronizes the music you are listening to other people. It works in smartphones and computers, if both persons have the application installed. They can easily sync music with each other. My product can be used by anyone with the interest of sharing good music. I believe there is no application in the market that offers such functionality. I might face challenges that involve starting up because it is still a new concept to many people.

SWOT Analysis

Strength

· Little to no competition

· Quick and easy to use interface

· Free download

· Revenue with advertisements

Weaknesses

· Very specific functionality

· Advertisements may annoy user

· Only available with smartphones and computers

· May only intrigue people who are tech savvy

Threats

· Release of a more advanced app with similar functionality by a more established company

· Technological limitations on electronic devices

Opportunities

· First world consumers may benefit from this the most

· No other application in the market with similar function

Consumer market. The demographics will be the urban folk. People living in big cities have bigger wants for fancy gadgetry. They have far higher disposable income and is more willing to spend it if it provides social segregation. The market is anticipated to grow exponentially in the following years. For the past 50 years, technology has been received by the public in a good way. Technological advances have been welcoming and encouraging.

Because of the uniqueness of my product, there has yet been any competition. They strength of my competition companies will most likely be their good customer care, great service and huge sponsorship from major companies. They are most likely to link Facebook with their services to further expand their territory and market presence.