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Cottle-Taylor: Expanding the Oral Care Group in India

MEMORANDUM To: Brinda Patel, Director of Oral-Care Marketing
From: Kunal Gulati and Gunjan Sharma, Assistant executives
Date: October 31, 2009
Subject: Report on feasibility of 25-30% growth in the toothbrush market
Ms. Patel,
We have attached our projection report.
As per our analysis, Mr. Lang’s idea of increasing advertising budget by 3% of sales will increase the unit sales by nearly 30% that will lead to $17.63m of profit from operations whereas, according to original marketing plan would fetch $18.2m profit from operations .Therefore, original projections will be more beneficial.
Also, Mr. Lang had predicted his estimates based on the success in Thailand, but the
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Brinda had a marketing plan which would bring about a 20% increase in sales but her manager has advised her that the company could higher sales growth by investing more in advertisements.
Brinda Patel’s manager Michael Lang had increased unit sales growth by 25% in Thailand by investing around 3% of sales to advertisement. Langs’s suggestion of opting the same strategy as that in Thailand will not suffice the purpose in India because of the huge demographic difference between the two countries.
Problem Statement
What is the feasibility of achieving a 25% to 30% growth in toothbrush business of Cottle India in 2010?
Brinda patel basically has two options with her.
One was to go with her own option to stick to the original marketing plan and increase her sales by 20% or
Another option is to go by Lange’s target of 20-25% growth in unit sales in the financial year by increasing the budget of advertising.

Criteria for Evaluation
Financial analysis is one of the main criteria to evaluate the options present in the situation. In the current scenario revenue generation and increasing the profit are the main things to be taken into account. Since there are two criteria for evaluating the criteria we start with is the profit increasing option.

Evaluation of options
Option 1: Brinda Patel should revise her marketing plan to achieve 30% unit sales growth
Lang projected a growth rate of the toothbrush sales by 16% for low end range, by 120%
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