This sample marketing plan was created with Marketing Plan Pro software.
This section will offer a financial overview of H20 Industries and their activities related to marketing. This will include break-even analysis, sales forecasts, expenses forecasts, and how they link to the marketing strategy.
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The break-even analysis indicates that $55,686 will be needed in monthly sales to match the total planned expenses.
|Monthly Revenue Break-even||$42,151|
|Average Percent Variable Cost||30%|
|Estimated Monthly Fixed Cost||$42,121|
Sales are running at $24,000 monthly, exclusive of rental revenue. This approximates 285 cubic ft per month. The plant capacity will be 100 cu. ft. per day, on a one-shift basis. Based on the potential market outlined in the Marketing Section of this plan, growth in sales of regenerated segregated resin should reach 433 cu. ft. per month by October (equals 20 cu. ft./day) which is this plan's starting point, and growing steadily each month until 80 cu. ft. per day is reached (80% capacity) by the end of the first year. Total production of segregated resin is assumed to be split into equal quantities of anion, cation, and mixed bed.
Once the 80% capacity utilization level is reached (October 2003), unit sales will grow by 5% in year two and 5% again in year three. This growth can be achieved within the capacity limits of 100 cu. ft. daily (26,000 cu. ft. per annum) without increases in production labor. Further increases in segregated regeneration would require overtime labor charges. Also, for the projection purposes, direct unit costs for years two and three remain at the level of year one.
The bulk regeneration pad will have a capacity of 20 cu. ft. and can handle two batches during an eight-hour shift, totaling 40 cu. ft./day. We will assume sales for bulk regeneration will grow at the rate of 5 cu. ft./day in the first month reaching capacity of 40 cu. ft./day after eight months. Sales are split between mixed bed 50%, 25% anion, and 25% cation. Sales of bulk resin will grow 15% each of the first three years. As the bulk regeneration, unlike the segregated regeneration, is not labor intensive, this 15% growth can be achieved without increases in production labor.
|Per ten cu. ft.||Regular unit prices||Dealer, self-delivery
|Weighted average of|
retail and dealer prices
|Anion or cation
|Cation or anion
Variable Unit Costs:
|Per cu.ft.||Summary of Anion
|Summary of Cation
|Carbon filtering and DI||$1.80||$1.46||
|Gas to heat water||$1.08||$0.00||$0.13|
Tank Rental Income:
Due to the high costs of purchasing tanks, many new customers opt for renting tanks on a monthly basis. For purposes of these projections we will assume that:
It is assumed that those customers who do not opt to rent their tanks will already have their own tanks or will purchase tanks from H20 Industries. Sales of tanks is assumed at only five percent of the number of monthly rental tanks. Sales price is $1,200. Cost equals $450.
The expense forecast, detailed in the next section, will be used as a tool for the organization to keep the company on target for set marketing goals. The forecast will provide indicators when the company is not on target and modifications are needed for the proper implementation of the marketing plan.
|Marketing Expense Budget|
|Total Sales and Marketing Expenses||$230,200||$255,400||$275,000|
|Percent of Sales||29.20%||13.44%||12.03%|
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