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    Anonymous tvA58EWlRg
    The document outlines the costs associated with manufacturing, advertising, distribution, and sales of washing machines in India to achieve an 8% market share in the first year. Total advertising costs are estimated to be Rs. 346 Cr across various regional and national channels. Distribution costs are estimated to be Rs. 88 Cr. To achieve the sales target of 1,50,000 units at a retail price of Rs. 37,000 per unit, the total costs per unit are Rs. 32,066 with a 15% profit margin of Rs. 4,810 per unit.

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    Anonymous tvA58EWlRg
    38 views3 pages
    The document outlines the costs associated with manufacturing, advertising, distribution, and sales of washing machines in India to achieve an 8% market share in the first year. Total advertising costs are estimated to be Rs. 346 Cr across various regional and national channels. Distribution costs are estimated to be Rs. 88 Cr. To achieve the sales target of 1,50,000 units at a retail price of Rs. 37,000 per unit, the total costs per unit are Rs. 32,066 with a 15% profit margin of Rs. 4,810 per unit.

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    The document outlines the costs associated with manufacturing, advertising, distribution, and sales of washing machines in India to achieve an 8% market share in the first year. Total advertising costs are estimated to be Rs. 346 Cr across various regional and national channels. Distribution costs are estimated to be Rs. 88 Cr. To achieve the sales target of 1,50,000 units at a retail price of Rs. 37,000 per unit, the total costs per unit are Rs. 32,066 with a 15% profit margin of Rs. 4,810 per unit.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    38 views3 pages

    Pricing

    Uploaded by

    Anonymous tvA58EWlRg
    The document outlines the costs associated with manufacturing, advertising, distribution, and sales of washing machines in India to achieve an 8% market share in the first year. Total advertising costs are estimated to be Rs. 346 Cr across various regional and national channels. Distribution costs are estimated to be Rs. 88 Cr. To achieve the sales target of 1,50,000 units at a retail price of Rs. 37,000 per unit, the total costs per unit are Rs. 32,066 with a 15% profit margin of Rs. 4,810 per unit.

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    of 3

    Pricing

    As given cost of manufacturing Rs. 9000

    Advertisement

    State-wise advertisement

    Regional tv ad cost per second = Rs.28001

    2 regional tv channels advertising 15 seconds of ad 3 times per day throughout the year

    =2800x15x3x365x2 = Rs.9.198 Cr

    Regional newspaper ad2 per square cm= Rs.40

    3 regional newspapers advertising half page in 30 days in a year

    =40x800x3x30 = Rs.0.288 Cr

    Banner and other promotion = Rs. 2.00 Cr

    Total ad cost per state per year = Rs. 11.486 Cr

    Total state ad cost = Rs. 11.486x 20 states = Rs. 229.72 Cr

    Nation-wise advertisement

    National tv ad cost per second (Star tv) = Rs.6640

    National tv ad cost per second (Color tv) = Rs.4950

    National tv ad cost per second (Sony tv) = Rs.4500

    3 national tv channels advertising 15 seconds of ad 3 times per day throughout the year

    = Rs.26.43 Cr
    1 www.themediaant.com

    2 www.ad2publish.com
    National newspaper ad per square cm= Rs.60

    3 national newspapers advertising half page in 30 days in a year

    =60x800x3x30 = Rs.0.432 Cr

    Total ad cost nation-wise per year = Rs. 26.86 Cr

    Online ad cost per year = Rs. 1 Cr

    Net total ad cost = Rs. 229.72 + 26.8 + 1 = Rs. 257.58 Cr

    Distribution Cost

    100 exclusive showroom metro cities = Rs. 24 Cr (assumptions)

    200 exclusive showroom in tier-2 cities = Rs. 24 Cr (assumptions)

    Logistics cost per year = Rs. 20 Cr (assumptions)

    Sales & service cost per year = Rs. 20 Cr (assumptions)

    Total = Rs. 88 Cr

    Grand total ad cost = Rs. 345.58 Cr ~ 346 Cr

    Total Indian market share assumption = Rs. 7000 Cr (Source IBEF for FY 18)

    We estimates our strategy to develop 8% market = Rs. 555 Cr for the first
    year

    To achieve it our target the variable cost of the washing machine = Rs. 555 – 346 Cr

    = Rs. 209 Cr

    Sales quantity estimates for first year = 1,50,000 units

    Promotion cost per unit = 346 Cr/ 1.5 lakh units

    = Rs. 23,066

    Cost of manufactured per unit = Rs. 9,000

    Total cost of washing machine per unit = Rs. 32,066

    Profit margin 15 % = Rs. 4,810


    Retail Price per unit = Rs. 36,876

    ~ Rs. 37,000

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