BRITA PRODUCTS COMPANY

PROFIT FORECASTS BASED ON THE VANTIS STUDY

SYSTEMS FILTER2 TOTAL GR ADV
1 3
SCENARIO UNITS PRICE REVENUE REVENUE MARGIN BUDGET
1 340000 $26,92 $9 152 800 $3 400 000 $6 177 800 $5 400 000
2 350000 $26,92 $9 422 000 $3 500 000 $6 359 500 $5 400 000
3 395000 $23,07 $9 112 650 $3 950 000 $5 656 400 $5 400 000
4 970000 $26,92 $26 112 400 $9 700 000 $17 624 900 $11 100 000
5 1125000 $23,07 $25 953 750 $11 250 000 $16 110 000 $11 100 000
6 1160000 $23,07 $26 761 200 $11 600 000 $16 611 200 $11 100 000
7 1205000 $26,92 $32 438 600 $12 050 000 $21 894 850 $15 000 000
8 1245000 $26,92 $33 515 400 $12 450 000 $22 621 650 $15 000 000
9 1350000 $23,07 $31 144 500 $13 500 000 $19 332 000 $11 100 000
10 1395000 $23,07 $32 182 650 $13 950 000 $19 976 400 $15 000 000

1
ASSUMES RETAILER TAKES 30% MARKUP TO GET TO THE MIN ADVERTISED PRICE
2
ASSUME 1.25 UNITS AT $8 PER UNIT
3
WITH DIRECT COSTS =$15(SYSTEMS) and $3(FILTERS)

 
 

BRITA PRODUCTS COMPANY : LIFETIME VALUES

PITCHER
ACQUISITION(SYSTEMS) FAUCET MOUNT CUSTOMERS4 CUSTOMERS5
PER PER
SYSTEMS $$$ CUSTOMR SYSTEMS $$$$ CUSTOMR
GROSS MARGIN(Price of $26.92 - direct cost of $15) $11,92 5266000 $38 700 000 $7,35
LESS ADV AND PROMO $ 1 1205000 $26 400 000 $21,91 5266000 $31 000 000 $5,89
PROFIT/LOSS PER INITIAL SALE -$9,99 $1,46

RETENTION(FILTERS)

FILTERS/YEAR PER INSTALLED SYSTEM 1,25 2,5

X RETENTION RATE 80% 80%
X GROSS MARGIN PER UNIT $5 $2,05
GROSS MARGIN EARNED PER CUSTOMER $5,00 $4,10
LESS RETENTION EXPENSE2 0 13390000 $18 000 000 $1,34
NET FILTER PROFIT PER CUSTOMER $5 $2,76
NET PRESENT VALUE OF A NEW CUSTOMER3 $5,89 $9,30

1
FOR PITCHERS, ASSUMED 1/2 OF ADV $ IS FOR ACQUISITION
AND 1/2 IS REMINDER TO BUY FILTERS
2
FOR PITCHERS, ACQUISITION COSTS DIVIDED BY
INSTALLED BASE(CUMULATIVE SALES ADJUSTED FOR 80% RETENTION)
FOR FAUCET MOUNT INITIAL SPENDING ALL GOES TO ACQUISITION
3
DISCOUNTED AT 15%, ASSUMING 5 YEAR CUSTOMER LIFE
4
SEE SHEET 1
5
SEE EXHIBIT 7