The Panama Liquor Co.

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I.Summary of Facts
1.Recent trends indicate U.S. market move toward non-whiskey products 2.Young drinkers have strongest demand for wine, vodka, tequila etc. 3.Market Development – new market, existing product
4.Vodka top selling in U.S.
5.Light drinkers (31% of U.S.)
6.Economic Market- Monopolistic Competition
2.Other alcoholic beverages – gin, rum, whiskey, cognac, wine and anis 3.Seco treated as member of vodka category in U.S.
i.Core- Experience of unique drink (brand name)
1)Easy mixing with numerous beverages or juices.
2)Alternative to vodka
3)Unique distillation – pure sugar cane juice rather than molasses 5.PLC. Growth- A rapid increase in sales.
1.Large margins to motivate channel members
2.$7 per liter retail market average for premium branded vodka (~$63 case) 3.VC $8.30 per case
4.Elasticity- Somewhat elastic
1.National Panama Airline used “seco” as promotion on international flights 2.Seco seen as national drink of Panama
3.Generally budget $2-$4 per case for advertising (shared btwn distiller and importer) 4.Expansibility- Expandable
1.New York Distributors
2.Panama City Headquarters
3.Current rum exports to Guatemala, El Salvador, and Costa Rica 4.Channel- PL > NY Importer (National Distributor) > Wholesalers F.Other
1.No Tariff on vodka imports from Panama to U.S.
2.Panama would give exemption from many taxes
II.State of the Problem/Opportunity
A.Primary-How to utilize excess plant capacity
1.Whether or not to enter U.S. market
2.Enter as new category, “seco” or as new type of vodka 3.Problem in marketing Seco in a product differentiation strategy because its higher prices may be outside the young drinker’s price range III.Recommendation Action

A.Primary – Enter U.S. market; promote Seco as alternative to vodka. B.Secondary.
1.Stick to what PL...
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