Team Handoff MFers MarketForecasters Cohort Two Industry Bravo Lindsey Battaglia Scott Christensen Matthew Derganc Adam Frey Gregory Young February 6 th,

Team Handoff

MarketForecastersCohort Two

Industry BravoLindsey BattagliaScott ChristensenMatthew Derganc

Adam FreyGregory Young

February 6th, 2013

Team Handoff

Cohort TwoIndustry Bravo

Lindsey BattagliaScott ChristensenMatthew Derganc

Adam FreyGregory YoungApril 12, 2013

MFers

Team Handoff

Cohort TwoIndustry Bravo

Lindsey BattagliaScott ChristensenMatthew Derganc

Adam FreyGregory YoungApril 12, 2013

MarketForecasters

STOCK PRICE EVOLUTION

REVENUES AND PROFITABILITY

Year 5 Year 6 Year 70

20

40

60

80

100

120

140

160

180

200

Mfers RevenueLeading Competitor

Revenue

Year 5 Year 6 Year 70

10

20

30

40

50

60

70

Mfers ContributionLeading Competitor

Contribution

50% Higher

MARKET SHARE

Firm M24%

Firm L29%

Firm S19% Firm T

14% Firm R14%

Year 5

MARKET SHARE

Firm M27%

Firm L28%

Firm S17% Firm T

16%

Firm R12%

Year 6

MARKET SHARE

Firm M32%

Firm L23%

Firm S19%

Firm T17%

Firm R10%

Year 7

9BRIEF BUSINESS REVIEW

•Company Overview/Performance•Dominate Shoppers and Savers•Enter Vodites and Compete•Economies of Scale

10BRIEF BUSINESS REVIEW

•Industry/Competition•Firm S only competitor in Sonite•Vodite Followers highly competitive

11BRIEF BUSINESS REVIEW

MOST 63%

SOLO32%

Other5%

Sonite Savers Market Share

MOVE65%

SOFT21%

Other14%

Sonite Shoppers Market Share

MEGA18%

SEXY24%

REAL2%

LEAD24%

LEGS21%

Other11%

Vodite Followers Market Share

12BRIEF BUSINESS REVIEW

•Consumer Review•High share in Shoppers & Savers•Followers dominate Vodites

13BRIEF BUSINESS REVIEW – SONITE

Explorers5%

Shoppers 33%

Professionals 11%

Highs Earners9%

Savers 41%

Year 7

Explorers4%

Shoppers 34%

Professionals 10%

Highs Earners9%

Savers 44%

Year 8 (Exp)

Explorers2%

Shoppers 34%

Professionals 5%

Highs Earners6%

Savers 53%

Year 12 (Exp)

Year 7 Year 8 (Exp) Year 12 (Exp)

0500

100015002000250030003500

Market Size (KU)

14BRIEF BUSINESS REVIEW – VODITE

Innovators MS %18%

Adopters MS%34%

Followers MS%48%

Year 7Innovators

MS %13%

Adopters MS%

24%

Followers MS%63%

Year 8 (Exp)

Innovators MS %3% Adopters MS%

6%

Followers MS%91%

Year 12 (Exp)

Year 7 Year 8 (Exp)

Year 12 (Exp)

0

200

400

600

800

1000

Market Size (KU)

15BRIEF BUSINESS REVIEW

•Product Line Performance•MOST•MOVE•MOOLA – OOPS?•MEGA

16BRIEF BUSINESS REVIEW

MOVEMOST

Period 0

17BRIEF BUSINESS REVIEW

MOVE

MOST

Period 1

18BRIEF BUSINESS REVIEW

MOVE

MOST

Period 2

19BRIEF BUSINESS REVIEW

MOVE

MOST

Period 3

MOOLA

20BRIEF BUSINESS REVIEW

MOVE

MOST

Period 4

MOOLA

21BRIEF BUSINESS REVIEW

MOVE

MOST

Period 5

MOOLA

22BRIEF BUSINESS REVIEW

MOVE

MOST

Period 6

MOOLA

23BRIEF BUSINESS REVIEW

MOVE

MOST

Period 7

MEGA

24BRIEF BUSINESS REVIEW – BRAND PROFITABILITY

Year 5 Year 6 Year 7$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

MOVEMOSTMOOLAMEGA

Brand Revenue

Year 5 Year 6 Year 7($10,000)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

MOVEMOSTMOOLAMEGA

Brand Contribution

25BRIEF BUSINESS REVIEW

SPI vs. R&D and Advertising % of Revenue

0 1 2 3 4 5 6 7 80

500

1000

1500

2000

2500

3000

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

SPIR&DAdvertising

Backups

27BRIEF BUSINESS REVIEW

• Company Overview/Performance• Dominate Shoppers and Savers• Enter Vodites and Compete

• Industry/Competition• Firm S is our leading competitor in the Shoppers and Savers segment of the Sonite

Market• The Followers segment of Vodites is highly competitive with 3 Firms and 4 products –

Firm L leading in overall Market Share.• Consumer Review

• The Shoppers and Savers segments are expected to continue growing over the next 5 periods making up a combined 87% of the 3,432 unit (* 1000) Sonite market

• The High Margin, Low Volume Vodite Market is expecting to maintain strong growth over the next 5 periods with Followers making up 91% of the 903 unit (*1000) Vodite Market.

• Product Line Performance• MOST is the top selling brand by volume in the low margin Savers segment of the

Sonite market. With a 2 to 1 advantage in Market Share and Purchase Intentions over our closest competitor, our firm has established a dominant position by capitalizing on economies of scale.

• MOVE generates the highest retail sales of any other product and with a $50 million net contribution in Period 7, it remains our cash cow with a 3 to 1 advantage in Market Share and Purchase Intentions over our closest competitor.

• MEGA has not performed as well in the Vodite market since our launch in Period 6 due to increased competition in the Followers segment. However, with the cash flows our Firm is generating from the Sonite Market, we have the capital required to fund a high advertising budget to steal Market Share, raise Brand Awareness, and increase Purchase Intentions in the future.

STOCK PRICE EVOLUTION - FACTORS

Key Factors Y1 vs. Y0 Y2 vs. Y1 Y3 vs. Y2 Y4 vs. Y3 Y5 v. Y4 Y6 vs. Y5 Y7 v. Y6Net Contribution 21% -2% 47% 95% 11% -1% 38%Revenues 18% -7% 54% 68% 23% 31% 28%Market Share 0% -3% 5% 5% 1% 3% 5%R&D $0 $2,170 -$1,130 -$1,040 $6,115 -$1,735 -$3,040

SONITE MARKET TRENDS

R&D EXPENDITURES

COMPETITIVE REVIEW

SegmentsBrands MOST SOLO MOVE SOFT MEGA SEXY REAL LEAD LEGSSegment Market Share 63% 32% 65% 21% 18% 24% 2% 24% 21%Brand Awareness 65% 67% 64% 59% 26% 27% 9% 41% 23%Purchase Intentions 62% 31% 62% 23% 18% 21% 6% 20% 18%Advertising ($M) $1,790 $2,410 $2,030 $2,410 $2,210 $1,440 $250 $860 $680Sales Force Size 123 152 137 151 46 77 15 68 68Price $189 $225 $267 $300 $399 $475 $520 $569 $550Base Cost $132 $105 $149 $161 $267 $280 $267 $261 $261Unit GM $57 $120 $118 $139 $132 $195 $253 $308 $289Unit GM % Price 30% 53% 44% 46% 33% 41% 49% 54% 53%

Sonite - Savers Sonite - Shoppers Vodite - Followers

SegmentsBrands MOST SOLO MOVE SOFT MEGA SEXY REAL LEAD LEGS

High Market Share

High Unit Margin

High Market Share

Large Sales Force

High Ad Budget

High Market Share

High Unit Margin

High Unit Margin

High Purchase Intent

Low Base Cost

High Purchase Intent

High Ad Budget

Highest Sales Force

Highest Brand Awareness

High Ad Budget

Low Base Cost

Highest Purchase Intent

Low GM Low Market Share

Low Ad Budget

High Base Cost

Low Unit Margin

High Base Cost

Lowest Market Share

Low Ad Budget

Low Ad Budget

Smaller Sales Force

Low Purchase Intent

Smaller Sales Force

Lowest Ad Budget

Lowest Purchase Intent

Sonite - Savers Sonite - Shoppers Vodite - Followers

Strengths

Weaknesses

COMPETITIVE REVIEW

• Actions of Key Competitors• Firm S, with SOLO and SOFT, are heavily advertising in the both the Savers and

Shoppers segments in an effort to improve their Market Share and Purchase Intentions

• Firm S is also utilizing a large sales force to promote their product through their distribution channels

• Firm S maintains a high advertising budget in Vodites with SEXY and with the highest sales force, they lead in Market Share and Purchase Intent

• Competitor Strengths/Weaknesses• Sonites – Savers

• Firm S Strengths: High Unit Margin, Low Base Cost, and High Advertising Budget

• Firm S Weaknesses: Low Market Share and Low Purchase Intentions• Sonites – Shoppers

• Firm S Strengths: Large Sales Force and High Advertising Budget• Firm S Weaknesses: High Base Cost which drives a higher price to maintain

competitive margins• Vodites – Followers

• Firm S Strengths: Large Sales Force, and Highest Purchase Intentions• Firm S Weaknesses: High Base Cost• Firm L Strengths: Highest Unit Margin, Brand Awareness, and Market Share• Firm L Weaknesses: Low Advertising Budget

MARKET SIZE AND GROWTH

Sonite Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 (Exp) Y12 (Exp)Market Size (KU) 841 971 1234 1386 1746 2030 2323 2580 2728 3432Market Growth (YoY) 15% 27% 12% 26% 16% 14% 11% 6% 26%Explorers MS % 22% 18% 13% 11% 9% 8% 6% 5% 4% 2%Shoppers MS % 17% 18% 18% 21% 25% 32% 32% 33% 34% 34%Professionals MS % 19% 22% 22% 19% 18% 17% 16% 11% 10% 5%Highs Earners MS % 12% 15% 16% 17% 15% 14% 12% 9% 9% 6%Savers MS % 29% 28% 30% 32% 33% 30% 34% 41% 44% 53%

Vodite Y4 Y5 Y6 Y7 Y8 (Exp) Y12 (Exp)Market Size (KU) 60 112 206 322 510 903Market Growth (YoY) 87% 84% 56% 58% 77%Innovators MS % 68% 48% 30% 18% 13% 3%Adopters MS% 27% 41% 43% 34% 24% 6%Followers MS% 5% 11% 27% 48% 63% 91%

34BRIEF BUSINESS REVIEW

• Company Overview/Performance• Dominating largest Sonite consumer segments, Shoppers and Savers, with MOVE and

MOST• Our lead in Market Share and Net Contribution has given us the capital to enter Vodite

market and compete • Industry/Competition

• Firm S is our leading competitor in the Shoppers and Savers segment of the Sonite Market

• The Followers segment of Vodites is highly competitive with 3 Firms and 4 products – Firm L leading in overall Market Share.

• Consumer Review• The Shoppers and Savers segments are expected to continue growing over the next 5

periods making up a combined 87% of the 3,432 unit (* 1000) Sonite market • The High Margin, Low Volume Vodite Market is expecting to maintain strong growth

over the next 5 periods with Followers making up 91% of the 903 unit (*1000) Vodite Market.

• Product Line Performance• MOST is the top selling brand by volume in the low margin Savers segment of the

Sonite market. With a 2 to 1 advantage in Market Share and Purchase Intentions over our closest competitor, our firm has established a dominant position by capitalizing on economies of scale.

• MOVE generates the highest retail sales of any other product and with a $50 million net contribution in Period 7, it remains our cash cow with a 3 to 1 advantage in Market Share and Purchase Intentions over our closest competitor.

• MEGA has not performed as well in the Vodite market since our launch in Period 6 due to increased competition in the Followers segment. However, with the cash flows our Firm is generating from the Sonite Market, we have the capital required to fund a high advertising budget to steal Market Share, raise Brand Awareness, and increase Purchase Intentions in the future.