Delaware Coors Case

Topics: Variable cost, Cost, Costs Pages: 4 (1285 words) Published: November 29, 2010
The purpose of this analysis is to evaluate the potential profitability and market share of the Coors brand upon its implementation into the state of Delaware. By using the data collected by Manson and Associates, our team was able to identify an optimal selling price, total fixed costs, estimated variable costs, the breakeven point in units and dollars, breakeven market share, as well as an overall profitability analysis for 6-pack sales as well as keg sales. Manson & Associates Research

With the $15,000 Mr. Brownlow allocated to feasibility research, the following studies were used during the analysis: •Table A: National and Delaware Resident Consumption Per Capita, 1998-2002 oHelped identify market by providing information regarding consumption demographics. •Table B: Population Estimates for 1996-2006 for two Delaware Counties in Market Area oProvided a combination of population estimates which allowed an efficient estimate of market share. •Table C: Coors Market Share Estimates for 2000-2005

oProvided estimates for market share which aided in breakeven analysis. •Table F: Financial Statement Summary for 510 Wholesalers of Wine, Liquor, and Beer in Fiscal Year 1999 oThis study provided data for variable costs per net sales. •Table H: Retailer Questionnaire Results

oProvided estimates of market share for competitors as well as attitudes towards brand and intent to sell. •Table I: Retail and Wholesale Prices for Selected Beers in the Market Area oGave information on average wholesale prices which determined prices used to analyze the profitability. Analysis

The calculations began with developing an understanding of the potential market the Coors distributors could realize based upon the population of people over the age of 21 in the two distribution counties while taking into consideration the average consumption of beer. As shown in Exhibit 1, the total market for these two counties was 6.3 million gallons. The estimated Coors market...
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