K9FuelBar:

An Energy Treat for Dogs

29118 301 - Annisa Setiawati Soemodinoto
29118 377 - Mas Zuchrizal R Winata
29118 515 - Syarief Abdul Fattah
29118 535 - Farhan Mawaridz
About K9FuelBar

Energy bar for dogs, made with mostly organic,

wheat- and corn-free, non GMO ingredients

Come in two flavors: liver & peanut butter

Dog owner ● 34% of Canadian household owned one or
more dogs (total population ~6.5 million

characteristics dogs)

● 90% of the dog owners considered their pets

as their family

● Nearly one-quarter of dog owners are willing

to spend significantly more to get healthier,
higher quality foods for their dogs
 Assumption = each dog owner has only one
Market Size
●
dog

Estimation ● By the owner’s awareness of dog health

○ One-quarter of dog owner willing to pay more
for healthier, higher quality food for their dogs
○ Potential market =6.5 million x ¼ = 1.625
million potential buyer

● By owner’s hobby in outdoor activities

○ 5% of dog owners like to do outdoor activities
○ Potential market = 6.5 million x 5% = 325,000
potential buyer

● We choose the second calculation as our

target market (325,000 potential buyer)

● Since it would take time to develop this

market, early market size was undoubtedly
lower
Profit Calculation
Yearly costs and revenues

Cost allowance Potential

Expected Expected gross Cost Units have to Production
Price ($) for distribution gross margin
Year revenue ($) margin ($) allowance ($) be sold (pc) cost ($)
($) ($)
P Re Me CA=Re-Me Q=Re/P Cp=Q*0.85 Cd=CA-Cp Mp=Re-Cp
2.99 5017 4,264.21 1,735.79 10,735.79
1 2.79 15,000 9,000 6,000 5376 4,569.89 1,430.11 10,430.11
2.59 5792 4,922.78 1,077.22 10,077.22
2.99 25084 21,321.07 8,678.93 53,678.93
2 2.79 75,000 45,000 30,000 26882 22,849.46 7,150.54 52,150.54
2.59 28958 24,613.90 5,386.10 50,386.10
2.99 50167 42,642.14 17,357.86 107,357.86
3 2.79 150,000 90,000 60,000 53763 45,698.92 14,301.08 104,301.08
2.59 57915 49,227.80 10,772.20 100,772.20
Distribution Methods

Web MEC Veterinarian PetSmart Orvis/Amazon Trade shows

Margin (%) 0 40 50 40 40 0
MERP ($) 2.99 2.99 2.99 2.99 2.99 2.99
Price margin ($) 2.99 1.79 1.50 1.79 1.79 2.99
COGS ($) 0.85 0.85 0.85 0.85 0.85 0.85
Profit per unit ($) 2.14 0.94 0.65 0.94 0.94 2.14
Method expenses
($) 0 5000 0 1000 7500 2495
 Social media (Facebook, Twitter)
Promotion methods
●
○ Time-consuming
○ a
● Partnership with Veterinarians without
Borders
○ Donate 1% of gross revenue
■ Year 1 = $150
■ Year 2 = $750
■ Year 3 = $1500

● Targeted, direct marketing at selected group

of customers or retail partners
○ Purchase list of customers/partners for $0.05
per name
○ Postcard promotion ($2 for customers, $5 for
retailers)
Our Recommendation
 The following calculations are based on
Disclaimer
●
Hutchinson’s yearly expected revenue as the
benchmark.

● In order for Hutchinson to maximize her

profit from the sales of K9FuelBar, she
should opt for selling the product at the
same amount of its target market at the very
least (ie: no. of items produced is not 5,017
units, but 325,000 units)

● We decided not to follow the latter

assumption because it was stated on the
case that Hutchinson had a tight budget, but
it does not state the tangible data over her
situation.
 Assume we are going for $2.99 price point,
Year One
●
the cost allowance for distribution methods
would be $1,735.79, should K9FuelBar is
Aims for initial market exposure of about to be sold at 5017 pcs.
the product.
● With $1,735.79 allocated for distribution
channel, K9FuelBar might opt for either Web
(opt 1), vet (opt 3) and PetSmart (opt 4).

● Website and PetSmart could be the most

feasible option for distributing the product
on year one; Website for minimizing
expenses and taking advantage of
Hutchinson’s willingness to ‘spend more
time’, and PetSmart distribution for
widespread exposure and penetrating the US
market.

● $1.735.79 - $1000.00 = $735.79 remaining

budget for promotion.
 Assume we are going for $2.99 price point,
Year Two
●
the cost allowance for distribution methods
would be $8,678.93 should K9FuelBar is
Aims for maximum exposure about to be sold at 25084 pcs.
possible to show the viability of the
business. ● With $8,678.93 allocated for distribution
channel, K9FuelBar might opt for either
PetSmart (opt 4) and a Trade Show (opt 6).
More items produced could mean more
items that could be distributed via PetSmart.
The Trade Shows could also significantly
crank up the market exposure of K9FuelBar;
selling to the potentially most promising
market for the product.

● $8,678.93 - $1000.00 - $2,495 = $5,183.93

remaining budget for promotion, her salary,
and savings for later funding.

Year Three
Aims for getting the optimal profit for
future expansion and diversification
of the product.
Assume we are going for $2.99 price point,
●
the cost allowance for distribution methods
would be $17,357.86 should K9FuelBar is
about to be sold at 50167 pcs.
● With $17,357.86 allocated for distribution
channel, K9FuelBar might opt for either MEC
(opt 3), PetSmart (opt 4) and Online Stores
(opt 5). Product availability through different
channels should be put at the highest
priority. Moreover, penetrating online stores
allows K9FuelBar to sell worldwide.
● $17,357.86 - $5000 - $1000 - $7,500 = $3,857
remaining budget for promotion, her salary,
and savings for later funding.
Favored Method
of Promotion

We suggest that K9FuelBar use its partnership

program with Veterinarian without Borders as
their mode of promotion through their 3-year
marketing plan, since this is the most optimal
plan (less time consuming than social media and
also much cheaper than direct marketing)