Transcript of MKT 538-South Delaware Coors

•Soon to be MBA Graduate Larry Brownlow is considering opening a Coors Distribution Center
in Delaware

•Currently has $15,000 in funds available to

conduct feasibility research and has
commissioned an outside firm to complete

•Issue: Larry has limited funds available and must decide which marketing studies proposed by
the research firm will be needed for him to make an informed decision on whether or not to
pursue the distribution opportunity. Group 2 Situation Summary &
Problem Definition Oral Presentation - South Delaware Coors
Larry: MBA Educated, Financially Stable, Entrepreneurial
Sprit

Coors: Fourth largest brewery in the U.S., Uncompromising

quality, closely controls distributors & vendors

Manson Research: Well respected research firm in the South

Atlantic region, Computer modeling
expertise, thorough, quality work. Situation Summary &
Problem Definition Contd. Study B, Population data and age 21+ can be researched using census
data
Study C, market share can be attained through the Coors' management or research, market watch
shows Coors Light at 8.7% of total volume as of 2011
Total gallons consumed can be calculated through study E, in lieu of Study A
Visiting other distributors in the state, Larry can find out if Coors is as well liked in Delaware as
it is nationwide What Larry Can
Accomplish Himself Start up costs of $800,000, annual costs of approximately $250,000 What
Larry Has Researched Funds available: $500,000 from trust fund, $400,000 from 'other sources'
(assumed family/friends), $400,000 line of credit Beer in bottles/cans is 75% of sales, beer in
kegs is about 25% of sales and is about 45% of the price of bottles/cans per gallon. From Report
E
Industry demand = taxes paid in market area / $.06 per gallon
From Report I
Estimation of the contribution per gallon
Average retail price - average wholesale price / .5625 (6 pack vol. vs liter vol.)
From report C, market share
Multiply market share by industry demand (a) to get expected sales vol.
Multiply this value times contribution per gallon (b) to get Gross Profit What can be Calculated
Based
on Research Facts and Figures involved in the case:
Budget of 15,000 for research
Importance of sales and pricing
Population in the 2 county area
Target market or the percentage of consumers
Expenses of being a distributor of Coors Inc.

The study is limited to only secondary and primary data by Manson and Associates Research

Environmental factors: success of Coors depends on the two wholesalers

Strategic marketing factors: ranking in sales compared to other brands
Financing factors: $500,000 held in trust for Larry, access to only $15,000 for feasibility
research Situation Analysis Opportunities
A well-known brand that is being made available to a new market
Improve the ranking in sales in Delaware
Distribution company becoming successful and bringing in jobs to Delaware
Company promotes environmental issues
The brand has a select market audience due to taste preference
More liquor and Beer Licenses are being issued every year to retailers SWOT Analysis Contd.
Strengths
The product, the company and the distributor are strengths that penetrate a new market in
Delaware
Only two distributors in the state, which lead to more market share
Owner (Larry Brownlow) working on his MBA
Sales experience, people skills, and the ability to analyze the market potential
Strong brand name
High quality and high price product that captures a particular taste preference
A defined and proven market share SWOT Analysis Weaknesses
Owner lacks experience in running a business
Consist of limited capital: $15,000 for feasibility study; and $500,000 of trust money that will be
made available for investment
Well- known competitors, many with lower price points and products with various taste
differentiation
No presence in the State of Delaware SWOT Analysis Contd. Threats
Coors brewery has a negative impression with those customers who support the union and
minority issue
The industry is very competitive
Customer taste may vary from beer to other alcoholic beverages
Product may slip in sales ranking SWOT Analysis Contd. A - National and Delaware Per Capita
Beer Consumption
Information on per capita consumption of beer in both the national scale and in Delaware
Population estimates, it provides information on possible demand of beer in both the national
scale and in Delaware
It cannot provide information to estimate Coors’ potential market demand in Delaware

B - Population Estimates for Two Delaware Counties in Market Area.

Provides information about the number of potential customers
With Beer Per Capita Consumption, it can provide information on the potential demand of beer
in Delaware
It cannot provide information to estimate Coors’ potential market demand in Delaware
C - Coors Market Share Estimates
Quantitative information is provided on Coors’ market share for the two county market area
It cannot provide clear information on Coors’ potential market demand in Delaware Manson &
Associates
Stage One Research Manson & Associates
Stage One Research Contd. D - Estimated Liquor and Beer Licenses for the Market Area.
Information on the number of liquor or beer sales operations in the market area
Information is provided relative to competition in the market area

E - Beer Taxes Paid by Delaware Wholesalers

Sales operations in the market area
Relative information on competition in the market area

F - Industry Composite Financial Statements

Financial information is given on the industry, considering: margins and returns G - Consumer
Study
Offers information on customer preferences and the outlook concerning the product
Concentrates on group interviews and mail questionnaires of to establish customer’s past
experiences, acceptance and intention to purchase Coors beer

H - Retailer Study
Gives information on retailers’ readiness and preferences to sell the product

I - Wholesale and Retail Beer Prices

Provides information on prices charged by wholesalers to retailers Stage Two Research
Primary Data Option 1
Perform no research on his own and only purchase research
Option 2
Perform some of the research on his own and purchase the remaining research from Manson &
Associates
Option 3
Purchase none of the studies from Manson and research everything on his own
With Larry's $15,000 he should:
Perform the research necessary for studies A, B & C on his own
Move forward with studies D, E, F, G, H, and I from Manson and Associates Options
&Recommendations Why Larry Should Perform his Own Studies:

Study A – The purchase of Study E will give all necessary information that study A would
provide
Study B – It is of our opinion that Larry could find comparable information for Study B from the
census bureau
Study C – We believe this information can be attained within a reasonable amount of time by
Larry Reasons for Recommendations Study D – Establishing the amount of expected permits
issued helps factor the number of restaurants and bars Larry can distribute to

Study E – This will not only help Larry complete Study A on his own but also help Larry
estimate what his average sales and taxes may be for future years

Study F – This study helps Larry determine whether his projected budgets are close and what to
expect for future years Reasons for Recommendations
Contd. Study G – Will help Larry determine how well his products will be accepted in the area

Study H – This will help Larry understand how difficult it will be when he solicits retailers to
carry his product

Study I – This study could possibly be performed by Larry if additional funds need to be
reserved. However, this study will help Larry determine whether his price points are in line
among his competitive products. Reasons for Recommendations
Contd. Implementation Larry should delay his graduation by a semester if necessary to research
Larry will spend $14,049.50 by purchasing the suggested reports
If funds need to be conserved Larry can perform Study I himself Larry can then determine
whether a Coors distributorship is the proper move for his future Larry will need information
from almost all the reports
Larry does not have the funds to purchase all the reports
Larry should perform some of the research to make the proper decision on whether to buy a
Coors distributorship Conclusions