Market Analysis: South Delaware Coors, Inc. Overview: The following summarizes the Market Analysis conducted to address the objective: Determine market potential of a Coors beer distributorship for a two-country area in southern Delaware. The resulting aspects of consumer behavior would mean Coors’ sales in Delaware would depend greatly on efforts of the two wholesalers planned for the state. We will base our definition of market potential on five selected studies of research provided by The Manson and Associates Research Proposal.
Key Findings and Rationale: Study A:National and Delaware Per Capita Beer Consumption for 1998-2002. Cost: $1,000 Rationale: Study A gives us a good base of consumption. Upon receiving the report, we observed that Delaware has consumed at least 3 gallons more than the rest of the United States per capita annually. If data revealed Delaware consumption were less than the National consumption, then demand would be unreasonably low to open a distributor. Study C: Coors Market Share Estimates for 2000-2005
Cost: $2,000 Rationale: We need Study C to understand Coors’ estimated market share, which would project the estimated target audience who would purchase the product. This estimate is essential to understand the market potential for the two-country area in prospective with the Coors’ nationwide projection model. Study E:Beer Taxes Paid by Delaware Wholesalers for 1997 and 1998 in Market Area. Cost: $200 Rationale: Essential piece of information which reveals the demand in Delaware for all beer.
Beer taxes paid by Delaware wholesalers aids to determine the demand for the beer market in Delaware. Study H:Retailer Study Cost $4,800 Rationale: We need to know market perception of the Coors brand in Delaware, and the retailer’s likelihood to stock and sell the product. Study I:Survey of Retail and Wholesale Beer Prices Cost: $2,000 Rationale: This study enables us to determine average wholesaler price per gallon among other distributers in the area. Is the distributorship feasible? Yes.
With a break-even volume of 380,000+ gallons and an estimated expected volume of 522,000 gallons, substantial profits can be obtained. Because of such a high profit margin, the distributorship is feasible. Do you think Larry should apply for the distributorship? Based on the research, we believe Larry should apply for the Coors distributorship. The research done by Manson and Associates gives us a strong basis to reconcile this decision. Pursuing the Coors distribution in the South Delaware two county area seems both feasible and profitable.
With investment funds from Larry’s trust fund, Larry’s family, and a line of credit from the bank he has the required capital to start up this distributorship. Break-even analysis was completed and we found that 380,435 gallons is our break-even volume. The tax values from Table E were used to determine the demand for the area. The demand estimated was 6,000,000 gallons. With the market share estimated in Table C we were able to determine our expected sales volume of 522,000 gallons. This value exceeds our break-even volume; covering costs and allowing profits to be made. Appendices: