Product and Portfolio Management

Question 1

Total Volume

Answer 1

= Total volume + Repeat volume

Question 2

Adjusted trial rate

Answer 2

= estimated trial rate (%) x awareness rate (%)

x distribution rate (%)

Question 3

trial population

Answer 3

= target population (#) x adjusted trial rate (%)

Question 4

Trial sales volume

Answer 4

= trial population (#) x units per purchase (#)

Question 5

Repeat Buyers

Answer 5

= trial population (#) x repeat rate (%)

Question 6

Repeat volume

Answer 6

= repeat buyers (#) x repeat volume per occasion (#)

x repeat occasions (#)

Question 7

Forecasted sales volume

Answer 7

= Trial volume + Repeat Volume

Question 8

Cannibalization

Answer 8

The reduction in sales ($ or #) of a firm’s existing

products due to the introduction of a new product.

Question 9

Cannibalization rate (%)

Answer 9

= Sales lost from existing products (#,$) / Sales of new product(#,$)

Question 10

weighted contribution margin

Answer 10

= Unit Cm of New Product - (Unit Cm of Old Product x Cannibalization Rate)

Question 11

Breakeven Volume

Answer 11

= New fixed cost ($) / Weighted contribution margin ($)