Cloud Candy Financial Report

Financial Report

F. REV Cloud Candy prospered at Market Day and became very profitable. One of the main reasons is due to the fact that the product we were selling was one of a kind at the TBR Market. Our business was one of only two businesses with cotton candy as our product. Because of this our direct competition was very low. In contrast, other companies that sold products that were very common such as cookies or cupcakes had very high direct competion. These companies would have to ensure that their product had a certain quality that made them stand out from their competition. In addition, other companies also had a very high operating cost. They would find that they had a very high revenue; however, because their operating cost

was very high, their profits turned out to be very low.

As our operating cost was mostly a flat rate, it was exceptionally lower per unit than that of our peers. In comparison, our prices were high as we only needed to sell them for $0.40 in order to break even. Nonetheless, we sold them for $2 or $3 to ensure that our profits would be as high as we could get them. Lastly, we had a sizeable advantage against our peers as we integrated a pre-ordering system into our company. A large portion of our profit came from pre-orders. As most students at TBR were not aware of the other businesses, they did not have any desire to save their money for other things as they most likely did not know about other products at that point in time.

G. Reflecting on our experiences at TBR Market Day, our business could have become more profitable than it had been by raising our prices, refining our marketing and offering more choices. As our company was one of only two companies selling cotton candy, if we had decided to increase our prices we would

have still gotten the same amount of customers. However since our prices would be increased, our profit would increase as well. As our product was in very high demand and a rarity, our customers would still have paid for cotton candy even if the price fluctuated from $3.00 to perhaps $3.50 or $4.00. If it had been a product with a lesser demand in the market, raising the prices would have the opposite effect and reduce sales rather than expanding them. In addition, to further increase our profits we would have to create marketing that was on a larger scale as well as of more grandeur. Marketing is a large part of the success of a business and had we been allowed to create videos, presentations and other forms of media, it would manipulate the audience into placing our product at a pedestal. Similar to cereal companies, if we had made something that was interesting and appealing to our audience such as animation or humour, our product would remain in people’s minds. Moreover, cotton candy was mostly one of a kind at the market but there was one other producer of cotton candy. We had a few customer come to us to cancel their preorders because they had already gotten cotton candy at the other business. In the future, we would have to have a quality that our competition did not have. For example, if we had offered several flavours instead of just two it would account for a larger amount of people’s tastes thus bringing more customers to our business and more money into our hands.

H. In the duration of this project, we learned different surveying strategies as well as what would work best for our purpose. In addition, we also learned how to incorporate our survey results into advertisements as well as the price of our product. From our survey, we dictated that a majority of our customers would be from the younger grades. Knowing this, we created marketing that would appeal to the younger children. For example, we used celebrities that they would recognize, as our “spokesperson” in order to coax the students into believing our product was worth the buy. We also determined the price of our product from the survey. Had it been too low or too high we would not have been profitable.

As a result of our marketing efforts as well as our pricing, REV Cloud Candy became the most successful venture at the TBR Market. The total revenue and profit was very unexpected and much higher than we had originally predicted. We had hoped for revenue of around $130 and a profit of $18 each. However, we ended with a revenue of $266 and a profit of $42 each.

Had we known that cotton candy would be as high in demand as it was, we would’ve increased our prices and if we had a redo of this project it is something we would definately do.

Also, we would manage our time better as a lot of things we left to the last minute therefore not attaining the highest quality. I would also make more pre-made products as it was quite a hassle to make them at the booth and our customers ended up waiting 5 or 6 minutes if they had a large order. Moreover, we would also offer pre-orders to more people as in view of the fact they were so successful. Initially, we only offered students in grade seven the opportunity to pre-order as we knew they would be absent on the day of the market and they were one of our most interested customers (based on our survey.) However at market day, many pupils in grade 5 and 6 also were very interested in our product. Because of this however, we had a lot of issues regarding the large amount of people at our booth. We all got very stressed and miscalculated change or gave an order to the wrong person. Prior to market day we also had some errors in our graph seeing as our operating cost line did not match the

equation.