Delaware Coors Case Essay

1286 WordsDec 10, 20106 Pages
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 o Helped identify market by providing information…show more content…
Knowing this data, and having information about competitors market share, simple calculations showed the market share in gallons for each competitor, keeping in mind that the Bud Light brand and Budweiser brand were grouped together under the Budweiser Co. This is the same for Miller and Miller Light. Budweiser Co. had the largest market share at 34.8% followed by Miller Co. at 20.6%. Busch was below our expected market share at 6.4%, meaning Coors is in a similar position as Busch. This information is shown in Exhibit 3. After analyzing the market size and having a better understanding of the competition, the next step was to decide if it would be profitable to become the distributor for Coors. In order to begin the analysis, selling price must be determined. To find selling price the team looked at the average 6-pack price wholesalers were selling to retailers, which ended up being $3.16, the prices used for the average were found in Table I. To determine the most feasible price for Coors to sell to retailers, analysis was performed on the average price of $3.16 as well as 5% below the average ($3.00) and 5% above the average ($3.31). Price per keg was determined using the information gathered from discussions with wholesalers. They said keg prices were 45% of 6-pack price per gallon (which is 177% more than the wholesaler price), making the average keg price per gallon $2.51. Since there are 15.5 gallons in a keg, the average keg price is $38.96.

More about Delaware Coors Case Essay

Open Document