Introduction

Cowgirl Chocolates was started in 1997 by Marilyn Lysohir and her husband, Ross Coates.

Marilyn and Ross are artists and devote much of their time to their artistic endeavors. Marilyn is

a ceramicist and lecturer who is internationally known and has a successful ceramic art business.

Ross is a sculptor and a professor of fine arts at a nearby University. As a labor of love, Marilyn

and Ross began publishing a once-a-year arts magazine called High Ground. More a multimedia

product than a magazine, the 600-copy production of this product does not pay for itself, so

Marilyn and Ross have continually sought other ways to provide income to cover the costs of

production for High Ground. Cowgirl Chocolates began as one of those ways.

Marilyn had experience working with chocolate and, in a prior job, created chocolate sculptures.

From this experience, she saw the love people have for chocolate. Because of her love for hot

and spicy foods, her brother suggested she combine hot and spicy with chocolate and develop a

product. She began experimenting with different combinations and recruited neighbors, friends

and acquaintances to try her creations and give her feedback. She received mixed responses

many enjoyed the hot and spicy chocolates, while some felt the combination didnt work or that

they were too spicy. Marilyn was able to find a local candy company to produce the chocolates

in quantity and, with that, Cowgirl Chocolates was born.

Cowgirl Chocolates motto Sissies Stay Away matches the image of the companys logo.

Looking tough, May Lillie, a turn-of-the-century cowgirl, graces the packaging of every Cowgirl

Chocolates product looking down the barrel of a pistol.

Situation Analysis

Company

Cowgirl Chocolates offers a variety of products including individually wrapped truffles,

chocolate bars and a hot caramel dessert sauce. The truffles are available in chocolate, mint,

orange, lime tequila and espresso. All of these truffles are hot and spicy, with espresso being the

hottest. Truffles can be purchased in gift boxes, in drawstring muslin bags, or in a collectible tin.

They can also be ordered in a plain plastic bag. The - pound muslin bag is the most popular

truffle product making up 16 percent of total revenues, while the - pound tin makes up 12

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percent of revenues. A sampler bag made up of four assorted hot truffles makes up 7 percent of

total sales. Overall, truffles make up 40 percent of the companys total revenues. Spicy

Chocolate Truffle Bars are sold individually and come in two varieties orange espresso or lime

tequila crunch. Sales of this product account for 50 percent of total revenues. The Hot Caramel

Dessert Sauce is sold by the jar and equates to 10 percent of total revenues. The companys

retail pricing is set to achieve an average gross profit margin of 65 percent after ingredients and

packaging. Although gift boxes, buckets, and baskets make up a small percentage of total truffle

sales, these items are made up of a combination of existing truffle and bar products, so the

additional cost to the company is the cost of the box, bucket or basket. Cowgirl Chocolates has

won numerous awards in both the Fiery Food Challenges and the Scovie Award Competitions

held annually. Additionally, the companys distinctive product packaging has won several

awards. Although the company has had some success with its hot and spicy product line, many

potential wholesalers and customers have commented that the product is too spicy. With this in

mind, Marilyn is in the process of developing a mild-mannered truffle without the spice.

Environment

The market for chocolate is vast. Gift baskets are popular purchases, especially around the

holidays, and Cowgirl Chocolates has positioned its product as a gift-type purchase. Yet, while

the market for chocolate is large, the market for spicy chocolate is markedly smaller. While

doing initial product testing, Marilyn discovered this even with her small sample size.

Additionally, at trade shows and other events, Marilyn continues to see the reaction consumers

have to the products. Specialty chocolate products do not hold as significant a percentage of the

market as traditional chocolate products because they are purchased less frequently, yet they may

hold greater customer loyalty and generate repeat customers. Because of their higher price,

specialty chocolate products may be purchased more for special occasions, so these products are

positioned as a gift purchase or special treat for oneself.

Competitors

Although very few direct competitors exist for Cowgirl Chocolates, there are many indirect

competitors other companies that manufacture chocolate and sweets. Cowgirl Chocolates

competes against these companies for shelf space at various retailers and for a portion of the

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disposable income of the consumer. Seattle Chocolates, the company that produces Cowgirl

Chocolate products, has its own line of high quality chocolate, yet without the spice.

Additionally, other companies produce premium chocolate products and charge comparable or

somewhat lower prices for similar sized chocolate bars. Cowgirl Chocolates must also keep in

mind the lower quality chocolate products that also compete for the consumers dollar. Lower

quality means these products sell for a lower price. Consumers may choose these chocolates

more frequently because they cost less.

In addition to competing with other chocolate companies, Cowgirl Chocolates also competes in

the hot and spicy food industry. Although these other products may not have the sweet element,

they could be substitute products in the mind of a hot and spicy food consumer.

Customers

Cowgirl Chocolates sells its products wholesale through a number of different retailers. It has

been successful in placement of the product through various companies in Moscow, Idaho,

where the business is located. The Moscow Food Co-op accounts for 10 to 15 percent of the

companys sales. Most of the products sold at the Co-op are made or grown locally, so Cowgirl

Chocolates products fit nicely. Three other locations in Moscow also carry the product: Wild

Women Traders, Northwest Showcase and Bookpeople. Each of these companies serves a

unique, niche market. Outside of Moscow, the Boise Food Co-op carries the companys

products, as does the Boise Museum of Fine Arts gift shop and three other gift shops in Montana,

Oregon and Ohio. An upscale restaurant in New York called the Kitchen Market carries Cowgirl

Chocolates products and is probably one of the companys steadiest wholesale customers, second

to the Moscow Food Co-op. In addition, a handful of specialty stores that sell hot and spicy

foods carry the products, yet customers at these stores seem unwilling to pay the premium price.

Various online retailers also sell Cowgirl Chocolates products, yet sales from these companies

are not very significant. Marilyn continues to promote the companys products and has tried to

gain placement in bigger name, upscale retailers. In the past, she had been successful in getting

the product placed at the Whitney Museum in New York City, yet the product did not sell well,

so it was dropped. Numerous grocery stores, specialty food stores, upscale restaurants, and high-

end retailers are currently the focus of Cowgirl Chocolates wholesale marketing efforts.

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Cowgirl Chocolates also sells its product retail through the company website. The relatively

simple site is maintained by a small, local Internet service provider. The website address is

included in all packaging materials and is linked to many other upscale shopping sites. Because

the website does not include the features that allow the company to track where customers are

coming from and if they have purchased from the company before, it is nearly impossible for the

company to determine exactly who its retail customer base consists of. Market analysis shows

that men tend to prefer hotter food than women, yet only 15 percent of American consumers

currently eat hot and spicy food.

Because of its packaging and positioning of the product as a specialty or gift purchase, the end-

user evaluates purchase of this product carefully before making a buying decision. Depending

on where they are exposed to the product, consumers will compare Cowgirl Chocolate products

with other chocolate products or other hot and spicy food products. They may also evaluate

other gift package options to make their choice. Price, value, quantity and taste will all be

factors in making the purchase decision.

Problem Definition

The company has been in business for four years and has not achieved profitability nor has it

achieved a significant growth in sales. While Marilyn has had some success positioning Cowgirl

Chocolates products in various locations throughout her town, she has had limited success

expanding outward. Cowgirl Chocolates products serve a very unique niche the products are

not simply for people who enjoy spicy food but for those in that group craving something

distinctive. Because of this extreme specialty, it is not easy to find Cowgirl Chocolates

customers.

Additionally, selling both wholesale and retail has its challenges. The company has identified a

niche within the unique, specialty, or eclectic retail stores. Its products tend to sell well in these

locations. However, because of Marilyns connections, various locations, including museum gift

shops, are also wholesale customers. These locations have been mostly unsuccessful selling

Cowgirl Chocolates. Better identification of potential wholesale customers and a well-drafted

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marketing plan are necessary in order to expand wholesale sales. On the retail side, the company

is missing huge potential by maintaining an inadequate website. The inability to track online

retail customers prohibits Cowgirl Chocolates from properly serving its customer base with the

products they desire. It also does little to aid in the companys marketing efforts, as the company

is unsure what type of consumer purchases its products.

Cowgirl Chocolates has positioned itself as a specialty chocolate company with unique, one-of-

a-kind spicy chocolates. Its tough cowboy or cowgirl image is reflected in the company logo

and packaging which is printed with bold lettering and wording. Market statistics show that

more men prefer hot and spicy food than women. The company logo, Sissies Stay Away, may

draw men toward the product, viewing it as a challenge. However, the logo may have the

opposite effect on women who may assume it is too spicy for them.

Compared to other specialty chocolate companies, Cowgirl Chocolates offers smaller package

sizes and similar or higher prices. Customers who purchase the product and open a tin filled to

the rim with chocolates may feel satisfied that they got their moneys worth; however, a

comparison on the shelf may prove different results. Cowgirl Chocolates smaller tin with a

higher price tag may be passed over for the purchase of a competitors larger tin. Additionally,

the smaller packaging sizes may make the product appear to be an exclusive product that is

enjoyed occasionally in small quantities.

While marketing and sales efforts are the immediately visible problem with Cowgirl Chocolates,

the underlying problem may be uncertainty as to the companys mission. A possible mission

statement for a company such as this may be, To provide quality chocolate products to our

customers using premium ingredients and processes while being attentive to our customers

needs. Yet, Cowgirl Chocolates did not start with the sole purpose of providing an excellent

chocolate product. It started as a way to fund High Ground, the arts magazine created and

published by Marilyn and Ross - their true passion. A vision for Cowgirl Chocolates must be

identified in order to point the company in the right direction.

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Alternatives

Cowgirl Chocolates must evaluate many different alternatives in order to grow the business or

even to simply stay in business. Improvement of the website and focus on increasing online

retail sales is one avenue of growth. Determining who the customer is will be the first step in

choosing a new website design and which online retailers to offer the companys products

through. This option includes development of the analytical capabilities of the website in order

to determine what type of person is purchasing the products, with what frequency they make

their purchases, and how they find the website. Cowgirl Chocolates could also expand its

wholesale business by first determining what types of retailers should be targeted. By learning

more about the end-user of its products, the company can develop a target wholesale customer

base that consists of retailers that are frequented by hot and spicy chocolate lovers.

Cowgirl Chocolates also has options to evaluate that are centered on its product line. The

company could develop additional products based on its customers preferences or it could

discontinue parts of its product line that have sold with no or minimal success.

Cowgirl Chocolates must also evaluate a variety of marketing options. Marilyn is considering

writing a cookbook to promote Cowgirl Chocolates products. The company must determine if a

cookbook has the potential to increase product sales. Additionally, Cowgirl Chocolates should

evaluate the feasibility of doing additional focused marketing during the holiday seasons. While

other companies in the industry see increased sales around the holiday seasons, Cowgirl

Chocolates has not noticed a marked increase in sales. Marketing strategies to capitalize on this

opportunity should be explored.

Lastly, Cowgirl Chocolates must evaluate the potential for continued viability of this business.

Identifying and understanding the target customer and projecting income and expenses for the

next few years can help determine if the company has the ability to generate profits and be

successful.

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Evaluation of Alternatives

Increase Online Retail Sales

Sales through the company website account for about 1/3 of the companys total sales. The

website also accounted for much of the increase in sales from 1999 to 2000. Retail sales produce

higher gross profit margins than wholesale sales. As illustrated in Appendix A, retail sales of

Spicy Chocolate Truffle Bars earn a 61% gross profit margin, while wholesale sales of the same

product earn 23%. This result is similar for all other products, not including the 1-pound plastic

bag that is only sold retail. A 10 percent increase in online retail sales ($883) would result in

$574 in additional profits, assuming an average gross profit margin of 65%. Unfortunately,

because of the low sales volume the company is currently generating, in order to cover the

$20,000+ cash shortfall generated from operations in 2000 using the same 65% gross profit

margin, a minimum of $31,000 in online retail sales would need to be generated. Cowgirl

Chocolates has already established itself as an online retailer. However, the website does not

provide features to allow the company to track its customers. Adding these features to the

website should have a very reasonable, minimal cost.

Another area to be evaluated is the size of orders placed on the internet and the appropriate

shipping and handling costs for each order. Although shipping costs are fully passed on to the

customer, the amount of time necessary to package and ship the products is not accounted for,

nor is the cost of shipping materials. For online retail sales, we will assume that each product is

purchased individually except candy bars which are purchased in pairs. If each order takes 15

minutes to prepare and package for shipping, the person preparing the order makes $10 per hour

and the shipping materials cost $1.00 per order, this will add $3.50 to the cost of each order.

Online retail sales in 2000 were $8,839.14. Using the percentage of total sales of each product

and the product prices, means approximately 1,375 online orders were placed. This additional

cost, ($4,812) must either be used in determining the retail sale price of the product or the

shipping and handling cost on each order. Shipping preparation and materials costs will not

typically change as the size of the order changes. However, as retail sales increase, employees

may be needed to package products and prepare them for shipping. Please see Appendix C for

calculations.

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Expand the Wholesale Business

Majority of Cowgirl Chocolates sales come from the wholesale side of its business. The

company has explored many options to find companies or organizations that are a fit with its

product. It has had success with many local stores which could be the result of Marilyns

reputation in the community. Sporadic success has been achieved outside the local market. The

most success has been achieved at two Food Co-ops and at the Kitchen Market, an upscale

restaurant and gourmet-food take-out business. Yet, limited or no success has been achieved at

museum gift shops and specialty food stores featuring hot and spicy foods. Wholesale gross

profit margins, after ingredients and product packaging, range from 23 to 47 percent, with an

average of 33 percent. This is 32 percent less than retail gross profit margins. Wholesale

markets offer additional exposure for the product and larger distribution channels. Continuous

contact with existing and potential wholesale customers is necessary to expand this side of the

business. In addition to marketing directed toward the end-user, Cowgirl Chocolates must

market to wholesale customers as well, educating them about the products and securing

placement on their shelves. Through experiences with different wholesale customers, Marilyn

has determined that the product will typically sell better if it is positioned with other like-priced

products or if it is found in a unique, high-end store.

Evaluate and Make Changes to the Product Line

Evaluating the existing product line and identifying products that could be discontinued or added

may help the company achieve greater profitability. The company feels it is currently achieving

a 58 to72 percent gross profit margin on each product. Yet, without accounting for packaging

time, this is inaccurate. Packaging labor must be included regardless of which company,

Cowgirl Chocolates or Seattle Chocolates, does the packaging. While Marilyn feels she may be

able to hire employees to package the product at a lower cost than Seattle Chocolates charges,

this analysis uses the packaging costs of Seattle Chocolates. It also assumes that the gift bucket,

gift basket, and 1-pound plastic bag have $1.00 in packaging costs, as the process for packing

these products should be similar to that of the gift box and -pound tin. The packaging and

production costs for the Hot Caramel Dessert Sauce was found by using Marilyns time to

produce 21 cases with 12 jars each. Including drive time of five hours round-trip and eight hours

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of production at a $12 per hour rate equates to $0.62 cost per jar. Please see Appendices A, B

and C for more details. The addition of these costs drops gross profit margins by 2 to 10 percent

on the retail side and 3 to 17 percent on the wholesale side depending on the product.

By conducting this analysis, it is apparent that the lowest gross profit margin produced on the

retail side (48%) and the wholesale side (11%) is the Hot Caramel Dessert Sauce. The sauce also

makes up the lowest percentage of total company sales at 10 percent. Marilyn has been looking

into the possibility of having a sauce company in Montana make the Hot Caramel Dessert Sauce.

This company will make and package the sauce and sell it to Cowgirl Chocolates for $2.75 per

jar. The company requires a minimum order size of 72 cases (864 jars), but may be willing to

produce and sell in half batches initially. In addition to a shipping cost of $70 - $90 per delivery,

Cowgirl Chocolates would incur one-time costs of creating new label designs to fit on the jars

used by this sauce company. If Cowgirl Chocolates maintains its current pricing, it will achieve

3 percent additional gross profit margin on the retail side if it purchases in full batches and 2

percent additional if it purchases in half batches. On the wholesale side, it will achieve 8 percent

additional gross profit if it purchases in full batches and 7 percent if it purchases in half batches.

Please see Appendix D for calculations.

The next lowest gross profit margin on the retail side comes from the one-pound plastic bag at 57

percent and from the -pound gift box on the wholesale side at 18 percent. Both of these

product currently generate about 1% of total sales. However, in anticipation of increased sales,

Cowgirl Chocolates has more gift box inventory on hand than it normally does.

Implement New Marketing Strategies

The first step in determining which marketing strategies have a greater chance of success is to

determine who the target customer is for Cowgirl Chocolate products. Then, company

management must determine the most effective ways to reach these customers. In order for the

new ad in Chile Pepper magazine ad to cover its cost, Cowgirl Chocolates must generate

additional revenue of over $9,000. Many competitors have seasonal sales pattern and see large

increases in sales around holidays such as Valentines Day and Christmas. Marilyn is

considering the purchase of an email list which would be used to send information and product

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specials at times when potential customers are shopping for gifts. Because a local jewelry store

may be willing to split the $300 cost of purchasing the list, the $150 cost would need to generate

$462 in increased sales to cover it. Another option Marilyn is considering is writing a cookbook

to promote Cowgirl Chocolates products. The time involved developing the book, cost of

materials, potential sales price, and ability to generate additional product sales must all be

evaluated. Cowgirl Chocolates could develop and implement a new marketing campaign

including the above options. If it doubled its current advertising budget, that additional $8,000 in

marketing expense would need to generate nearly $25,000 in sales to cover its cost. Please see

Appendix E for calculations.

Determine Viability of the Business

Lack of profitability for the last four years that the company has been in business is a key driver

for the evaluation of this option. As discussed above, adding in estimated packaging labor

reduces overall gross profit margin for the company from 45% of sales to 22% of sales in 2000.

This equates to over $6,000 in less net income for the company based on current year sales.

Additionally, this business was started with the purpose of funding the development of High

Ground, the arts magazine created by Marilyn and Ross. Up to this point, Cowgirl Chocolates

has not provided any funding for the magazine. It has only drained Marilyn and Ross of their

personal savings. In the analysis, it was estimated that the 600-issue production of High Ground

cost $100 per issue to produce. If this $60,000 need is added to the 2000 financial results of

Cowgirl Chocolates, Net Profit Before Taxes would drop to ($72,000) a $72,000 Net Loss. To

look at this another way, because Cowgirl Chocolates was not able to generate the income

necessary to fund the production of High Ground and it generated more expenses than income

from operations, Marilyn and Ross were required to use their personal savings in the amount of

$72,000 to cover both Cowgirl Chocolates and High Ground. Please see Appendix B for

calculations.

A break-even analysis of Cowgirl Chocolates identifies many variable costs including

ingredients, packaging materials and packaging labor. Once subtracted from total sales

(including shipping income) of $30,046, the result is a 32 percent contribution margin. The

contribution margin is what is available to cover the fixed costs which were identified to be

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advertising, travel, miscellaneous, memberships, brokers, office expense, and the necessary

funds for High Ground. Total fixed costs equal $82,024. In order to determine what level of

sales Cowgirl Chocolates needs to meet to meet its goal of providing adequate funding for High

Ground, I divided total fixed costs by the contribution margin. The analysis shows that over

$250,000 in annual sales is needed. This is a 741% increase in sales!

Recommendations

Positioning Cowgirl Chocolates as a premier, high-quality chocolate company is an appropriate

strategy. However, because of the uniqueness of the product, Cowgirl Chocolates does not have

equal footing with its competitors. The spicy aspect of the chocolates limits its ability to directly

compete in the specialty chocolate industry. On the other hand, the sweetness of the product,

limits the companys ability to compete in the hot and spicy food industry. Cowgirl Chocolates

should maintain its positioning strategy as a chocolate company and hot and spicy food

company, but it should become better aware of who it customer truly is to capitalize on its

uniqueness in both industries. This positioning strategy will be best served by establishing

Cowgirl Chocolates as a brand. The company can best do this by directly influencing the

consumer through its website and other marketing tools and selecting only the wholesale

customers that offer high-quality, specialty products or hot and spicy food.

In order to keep the company alive, the following recommendations must be followed:

1. Increase Online Retail Sales

The backbone for this revenue source is already in place, yet it is not adequately utilized.

Although the company can currently determine which products sell better online than

others, it cannot identify who is purchasing what. This knowledge will be a major step in

development of the companys overall marketing strategies. The tracking features

installed on the website will also allow the company to determine how customers arrive

at its website. Marilyn can then determine the effectiveness of paying to have the website

listed on other sites. Additionally, she can better choose potential sites to link to when

she learns more about the customers buying habits and preferences.

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As online retail sales increase, a greater number of small orders will be generated. These

orders are time consuming to prepare and package for shipping. Employees will need to

be hired to manage and ship orders. In order to ensure an adequate profit is being earned

from online retail orders, Cowgirl Chocolates could consider establishing a minimum

online order or increasing its shipping and handling costs to cover these costs.

Retail sales generate significantly greater gross profit margins than wholesale sales.

Because the company has the ability to sell retail through its website, it should maximize

these efforts while keeping in mind the added costs of hiring employees.

2. Strategically Expand the Wholesale Business

Wholesale customers are a good way for Cowgirl Chocolates to cover additional parts of

the market. When seeking out wholesale customers, the company must keep in mind its

high-quality, specialty and hot and spicy image. Stores offering hot and spicy products

alone will not be ideal candidates as wholesale customers. Cowgirl Chocolates must

utilize wholesale channels that offer products with comparable quality and price. Other

companies similar to Kitchen Market and the local Food Co-ops, should be sought.

Consumers who enter these stores expect high quality, unique products and they are

comfortable paying more for them.

3. Evaluate and Make Changes to the Product Line

Cowgirl Chocolates should discontinue the Hot Caramel Dessert Sauce for a number of

reasons. It currently achieves a much lower gross profit margin than all other products

and accounts for only 10 percent of the companys sales. The commitment to this

product is one full day of Marilyns time on at least a quarterly basis to achieve $2,600 in

total sales. The other option, utilizing a sauce company to manufacture the product,

requires a large commitment from Cowgirl Chocolates to purchase 432 or 864 jars at one

time. Unless a strong sales and marketing effort is implemented that focuses on this

product, the purchase of 864 jars of caramel sauce will last the company one year.

Because of the low margins and high level of commitment to the product, it is not

feasible to continue production.

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4. Implement New Marketing Strategies

In order to capitalize on the growing trend of gift baskets and on the increased sales

around the holiday seasons, Cowgirl Chocolates must not only position itself as a high-

quality, specialty product, it must position itself as a gift option. The company has

unique packaging for all of its products which makes all of them suitable as gift

purchases. Price-conscious consumers may choose a less expensive tin over the large gift

basket because even alone, the tin makes an attractive gift. Additional marketing of the

gift bucket and gift basket around the holidays may increase sales of these products. The

gift bucket is currently priced to achieve the highest gross profit margin of all products.

Offering discounted pricing on this product to wholesalers during the holiday seasons

may increase their purchases of this product. Selling additional gift buckets also has the

added bonus of using up the overstock of inventory in gift baskets. A special price on

gift buckets could also be included on the companys website and other marketing pieces

to gain additional retail sales of the product, as well.

Purchasing the email list seems to be a cost effective new marketing strategy. To this list,

the company can add retail customers from the website and wholesale customers and

prospects. All new marketing strategies must be evaluated to determine the level of sales

needed to cover the cost, which products have the greatest marketing potential, and which

avenues are most effective in reaching its target customers. As stated earlier, only 15

percent of the American consumers enjoy hot and spicy foods, and men prefer hot and

spicy foods more than women do. Based on this information, the content of the ad placed

in Chile Pepper magazine should appeal to Cowgirl Chocolates target customer men

who enjoy hot and spicy foods.

Development of a cookbook as a marketing strategy for Cowgirl Chocolates is a huge

time and cost commitment with uncertain results. Marilyn and Ross already have

commitments to their full-time careers, to Cowgirl Chocolates, and to High Ground.

Finding time to write and market a cookbook will be difficult.

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Although the above recommendations should increase sales and profitability for Cowgirl

Chocolates, this is not a guarantee that the company is viable. For four years, Cowgirl

Chocolates has had difficulty identifying how to best reach the end-users of its products.

Because of the extreme uniqueness of its product line, the customer base is very small. Unless a

company has identified the best channels to reach the customer or the customer purchases in

large quantities, it is difficult to achieve sufficient profitability to stay in business. Cowgirl

Chocolates has not achieved either of these milestones. Additionally, the level of sales needed to

bring the company to a sufficient level of profitability is more than three times existing sales.

Until this occurs, the company will continue to drain the owners personal savings. In my

opinion, the recommendations made to keep the company alive will have too small of an

impact and be unable to turn the company around quickly. It appears the goal of providing

funding for High Ground is too insurmountable for the market potential of Cowgirl Chocolates.

Unless Marilyn is willing to re-focus the mission of the company and remove the burden of

providing funding for High Ground, Cowgirl Chocolates will not remain a viable business.

However, even without the burden of High Ground, viability will be difficult. Ultimately, I

would recommend re-defining the company and developing a mission statement that does not

include funding another organization. Then, I would develop a budget and projections for the

year 2001, implement recommendations #1 through #4 above, and evaluate performance against

the budget at the end of the year. Continuation of the business should only be done if the owners

are aware of and accept the potential personal contribution they may need to make if the

company fails to meet its projections. If the company fails to meet expectations after one year, I

would stop production and close the business.

Jennifer Pontinen

MBA 8711: Marketing Management

Spring 2010