York University - B2B Final project presentaion

1. Product
 Competition
> INDIRECT (convenience)
Plastics – Visa, MasterCard, Amex, Discover, debit card , gift cards, etc
Estimated 37 million debit cards and 72 million credit cards in circulation in Canada (2010)
> DIRECT
Cash Back – Wal-Mart, Loblaw's, No Frills, etc

2. Price
• Nautilus Hyosung Monimax 7600T
• Made in Korea
• Designed & manufactured in-house
• Multifunctional machine that is designed to
support features such as dispensing cash or
envelope depository
• Product weighs in at 265lbs
• 3 separate security dimensions that can be
integrated with the financial institutions own
security or a third party security monitoring and
protection company.

3. Price & Pricing Strategy
 $2400 CAD - Hardware only
 $2700 CAD - Hardware and software package
(software developed by in-house software programmers and engineers)
 Price quoted is CIF
 Low price factors – Economies of Scale, co-location with raw material
suppliers & all manufacturing done in-house
 20-22% mark up
 Retail price ($3215 CAD) = Cost ($2700 CAD) + Markup (20%)
 ETP Limited ATM Network including Interac and Star in Canada

4. Distribution
•D I R E C T S E L L I N G
•D I S T R I B U T O R S
•V A L U E A D D E D R E S E L L E R S ( V A R S )

5. Promotion Advertising
 Trade shows
 Product catalogues of Direct Mail
 Industry Journals
 Personal Selling

6. Sales Promotion
 Service Bundling
 Hardware And software linkage
 Maintenance and repair contracts
 Exclusive features

7. Distribution
 Market exposure
 Channel type
 Transportation
 Warehousing

8. Sale Promotion
Objectives :
> Increase awareness
> Stimulate derive demand
> Create a favorable image
> Create a favorable environment for our sales force

9. Strategies
 Increase attendance at trade shows
 Increase distribution catalogues
 Utilize social media
 Comparison advertising

10. Sales Promotion Objectives
 Establish long term relationships with our clients
 Stand out as primary supplier of ATMS
 Emphasize superiority of products
 Attract new clients

11. Sales Promotion Strategies
 Secure long term contracts
 Provide value added services
 Create synergy
 Use of demonstrations and trade shows
 Focus on up-selling and cross selling

12. Price Issue & Strategy
 Market Penetration Strategy
 Low price – High sales volume , marginal profit
 To increase market share and/or sales volume, rather
than making a profit in the short term.
 Creates barriers of market entry for new competitors
 $2800 CAD

13. Price
REVENUE YEAR 1 YEAR 2 YEAR 3
Gross Revenue $60,000,000 $66,000,000 $72,600,000
Cost of goods sold $48,000,000 $52,000,000 $58,080,000
Total operating $2,150,000 $2,670,000 $3,280,000
expenses
Earnings Before $11,000,000 $13,090,000 $13,405,000
Taxes
Taxes on $3,300,000 $3,927,000 $4,021,000
income 30%
Net $7,700,000 $9,163,000 $9,384,000
Income
#21459

14. Break Even Analysis
The formula for break-even analysis is
FIXED COST/UNIT SELLING PRICE-VARIABLE COST.
The fixed cost for year one is 2,150,000
The unit selling price for an ATM is $2,800
The variable cost is $80.27
For year one the break-even is
2,150,000/2,800-80.27 = 2,150,000/2,719.73 = 790.52
For year two the break-even is
The break-even is 2,670,000/2,800-90.63= 985.47
For year three the break-even is
The break-even is 3,280,000/2,800-101.20= 1,215.35