Finally, the company should choose middlemen to sell Baskin Robbins ice cream Vanilla with Saffron to customers. In this regard, the company should choose large retailers to distribute its new product nationwide. To put it more precisely, the company should focus on such large retailers as Wall-Mart and Target. In addition, the company can negotiate the distribution of Baskin Robbins ice cream Vanilla with Saffron through the Starbucks’ network because Starbucks can be an effective middleman to distribute the ice cream. The use of the largest retailers in the US allows the company to maximize its sale rates because large retailers attract mass customers (Gwynn, 2004). Therefore, the company can reach its target customer group easily and boost its sale rates from the beginning of the introduction of the product. In such a way, the company will use reliable retailers because large retailers are renowned and contribute to the fast distribution of the ice cream nationwide. They have well-developed network and can provide the company with the possibility to increase its sale rates from the beginning of the introduction of the new product in the market.

The budget of the introduction of the new product and expected revenues and expenses of the company in the course of three years since the introduction of Baskin Robbins ice cream Vanilla with Saffron in the market are presented in the table 1:

Table 1. Budget 2012-2014

2012

(thousands USD) 2013

(thousands USD) 2014

(thousands USD)

Sales $461,900 $484,735 $508,712

Direct Costs of Goods $277,140 $282,620 $288,210

Hidden Row $0 $0 $0

———— ———— ————

Cost of Goods Sold $277,140 $282,620 $288,210

Gross Margin $184,760 $202,115 $220,501

Gross Margin % 40.00% 41.70% 43.35%

Expenses

Payroll $86,240 $88,840 $92,840

Marketing/Postage/Other $6,000 $6,000 $6,000

Depreciation $2,500 $2,500 $2,500

Legal $1,200 $1,200 $1,200

Books/Accounting $1,200 $2,400 $2,400

Licenses/Permits/Memberships $900 $900 $900

Delivery/Transportation $4,800 $4,800 $4,800

Insurance $3,600 $3,600 $3,600

Rent $30,000 $30,000 $30,000

Utilities $12,000 $12,000 $12,000

Equipment/Supplies $4,800 $4,800 $4,800

Building/Equipment Maintenence $1,200 $1,200 $1,200

Payroll Taxes $12,936 $13,326 $13,926

Other $1,200 $1,200 $1,200

———— ———— ————

Total Operating Expenses $168,576 $172,766 $177,366

Profit Before Interest and Taxes $16,184 $29,349 $43,135

EBITDA $18,684 $31,849 $45,635

Interest Expense $5,997 $5,107 $4,179

Taxes Incurred $3,056 $7,272 $11,687

Net Profit $7,131 $16,969 $27,270

Net Profit/Sales 1.54% 3.50% 5.36%

Thus, taking into account all above mentioned, it is important to place emphasis on the fact that the introduction of Baskin Robbins ice cream Vanilla with Saffron will need the development of the effective and reliable distribution strategy and distribution channels. In this regard, the company should focus on the US market and distribute its products nationwide, but Alaska. In addition, the company should develop its production facilities nationwide. The localization of the production will allow the company to decrease costs of the delivery of the new product to the target customer group. The product is seasonal. Therefore, the company should increase and decrease the production and delivery of the product respectively to the demand of the market. Finally, the company should use large retailers to sell Baskin Robbins ice cream Vanilla with Saffron nationwide.

 

REFERENCES:

Breneman, D. W., & Taylor, A. L. (eds.). (1996). Strategies for promoting excellence in a time of scarce resources. San Francisco: Jossey-Bass.

Gwynn, T. (2004). The Sweet Spot: The Story of the San Diego Padres Petro Park. New York: Routledge.