Mountain Beer Brewery Company - A New Brand Of Beer In The Market (Research Paper Sample)
The research paper is about introducing a new brand of beer in the market.source..
Introducing a light beer in the United States market, Chris has to evaluate both the merits and demerits of taking such an approach. The advantage of perpetrating into the market, with a potential of almost $38 billion annually, this will lead to an expected increase in revenue. The venture will help meet the growing demand for youth and distributors who make 28% of the market hence making Mountain Man popular in pubs and restaurants.
On the contrary, advertising expenses will increase hence weaken the brand image. Operational costs like marketing, Selling, general and administrative expenses at $750,000 and $900,000 respectively will rise thus reducing the company's profitability. It is recommended to launch a light beer by brand extension. The company should give price offers and discounts to retailers who buy in large quantities. Distribution and advertising of the new brand should be done frequently to get it known by the young generation.
Mountain Man light projected revenue analysis;
Net revenue(2005):$50440000, Barrels sold 520000, price per barrel $97.
With 0.25% annual market share, light beer share (2005):$18,744,303 with 4% compound
annual growth rate.
In 2006, $19,494,075 Mountain Man Brewery Company market share, $48735, Mountain Man Brewery Company revenue from Light beer($48,735*97)=$4,727,295.
2007, $20,273,838, market share, $101,369,
Revenue from light beer(101,369*97)=$9,832,793.
Break-even point=Fixed cost/Variable cost
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