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ted in Beijing ? Processing and packaging facilities located a mile away from the dairy farms ? Various structures such as milking parlor, maternity pens, straw store, feed store, milk room, manure pit, an office, barns, sheds, and machinery Supplies ? Average American dairy farm has 115 mature cows ? A mature cow can produce 7 gallons a day which is nearly 2,500 gallons a year ? Roughly 500 sq ft. of land required per animal ? Abundant amount of land outside of major cities and in Eastern China ? With our 300 purebred dairy cows imported, Hood will have 3 running dairy farms in the North Eastern regions of China Packaging ? Cardboard Milk cartons ? Plastic Milk bottles Current milk Sales in China *These 4 panies are our largest petitors in China Pricing Strategies Peration Pricing: ?offer a low initial price to get it out into the mass market right away ? lowers per unit production costs ?marketing costs per unit are greatly diminished ?A low initial price discourages petitors from entering the market ?*Firm may want to maintain initial price to gain profit lost from low introductory level. OR lower the price further, counting on the new volume to generate the necessary profit. Price ?Foreign pany with domestic production and distribution ?Competitive price: 20 RMB (slightly less then some of the other foreign milk petitors in China) ?The information and data we have gathered has showed us we need to sell in this price range to have a chance in the market while being petitive and profitable BREAK EVEN Analysis ? Price: 20 RMB (per liter) ? Cost: 5 RMB ? Fixed: 1,800,000 RMB Breakeven= fixed costs/ (unit selling price variable costs per unit) =1,800,000/(20 – 5)= 120,000 units Financials Item co w s 2 0 0 4 9 9 d o l l a rs p e r cw t so l d G ro ss v a l u e o f p ro d u ct i o n : M i l k so l d Ca ttle O t h e r i n co m e 2 / T o t a l , g ro ss v a l u e o f p ro d u ct i o n O p e ra t i n g co st s: Feed Pu rch a se d f e e d H o m e g ro w n