The aim of this case is to examine Larry Brownlow's choice to invest in and manage a Coors Distributor in south Delaware. Coors Beer, situated in Golden, Colorado, has numerous distributors that are closely watched across the nation.
Coors is renowned for its commitment to quality by suppliers, wholesalers, and customers. In addition to monitoring wholesalers and distributors, Coors also mandates the use of recycling equipment. Mr. Brownlow had $15,000 at his disposal to investigate the decision of owning the South Delaware Distribution Center. An initial investment of $800,000 is required for the distributor.
Since Coors will enter this area for the first time, it is anticipated that market share will increase as the brand gains establishment over time.
Problem
Larry Brownlow opts to employ a general research firm, Mansion and Associates. Mr. Brownlow sends a req
...uest for proposal to John Rome, a senior research analyst.
Mr. Rome gave Larry a variety of research studies to choose from, to help him decide whether to purchase the distributor or avoid the opportunity. John Rome sent a proposal to Larry that included several studies and stages. However, since Larry's budget for research is only $15,000, he cannot purchase all of the studies provided by Manson and Associates. These studies will cover both secondary and primary data, with the aim of providing Mr. Rome with relevant information.
Larry Brownlow must carefully consider whether or not to invest in the studies proposed by Manson and Associates. The total investment required is a significant amount of money, amounting to $800,000. Due to the limited timeframe, Larry must evaluate all available studies and make a prompt decision. The proposal sent by Manson and Associates outlines the variet
of studies that Manson Research can offer.
All of these proposals have a total cost of $18,549.50, exceeding Larry's allocated funds for research. The proposal consists of two stages: secondary data analysis and the use of computer models developed by Manson, as well as primary data gathering. Study A examines the per capita consumption of both the overall population and the drinking age population. It focuses on studying the consumption patterns in the United States and Delaware between 1998 and 2002. The findings from Study A could provide valuable insights into the quantity of Coors beer required for the Delaware area.
This study costs $1,000. Study B examines the population and drinking age population of Delaware's two counties from 1996 to 2006. It provides a breakdown of the Delaware population by counties. Study B is priced at $1,500.
Study C focuses on examining the market share of Coors in comparison to its competitors, aiming to identify any patterns and forecast future sales. The cost of Study C is $2,000. On the other hand, Study D analyzes the license type that generates the highest Coors sales.
This study is useful for determining the required licenses to maximize beer sales. Study D has a price of $1,000. Study E focuses on the taxes paid by wholesalers in Delaware and provides valuable insights into the amount of profit to be allocated for taxes. Study E is priced at $200.
Study F offers financial information for beer wholesalers, allowing Larry to understand how wholesalers utilize their money. Study F is priced at $49.50. Study G utilizes focus groups and questionnaires to evaluate customer preference and rate Coors and its competitors.
The study costs for understanding
Delaware customers' preferences for beer and the wholesaler experience are as follows: Study G is priced at $6,000, while Study H, which focuses on potential retailers in Delaware and evaluates past sales and experiences, is priced at $4,800. Considering Study H is essential to ensure that the beer is sold by retailers instead of remaining unsold and becoming a financial burden for the shelf.
The final study provided by Manson is Study I. Study I focuses on analyzing the prices of competitors in order to determine the appropriate price for Coors beer in Delaware. This study is crucial for helping Larry Brownlow make informed decisions regarding the potential profitability of investing in a Coors beer distributor in southern Delaware. Study I comes at a cost of $2,000.
Conclusion
Larry Brownlow faces the challenging task of deciding whether or not to invest in a Coors beer distributor in southern Delaware. To evaluate the profitability of this venture, he must gain a thorough understanding of the potential buyers of Coors beer in this market.
Mr. Brownlow intends to buy performance Studies A, C, E, F, G, and I from Manson and Associates. These studies offer the most accurate insights into the preferences of southern Delaware beer consumers. Additionally, they provide valuable information regarding the viability of establishing a Coors beer distributorship in South Delaware. The combined cost of these studies is $11,249.50, leaving Larry with $3,750.50 to allocate for other investments.
Recommendation
Study A examines the beer consumption patterns in Delaware, which will aid in determining the distributor's supply requirements to meet demand.
Study C analyzes Coors' market share, both present and future, to explore company growth
opportunities that arise with increased market presence.
Study E provides Larry with information on the expected taxes for each beer sold, showcasing the percentage of profits allocated towards taxes and ensuring Coors remains profitable after tax deductions.
Study F will assist Larry in evaluating the potential profitability and capital structure of a beer distributor, providing crucial information for comparing asset and liability projections with similar wholesalers in the United States. Simultaneously, Study G plays a vital role in understanding the drinking preferences within the local population. It determines consumer purchasing behavior towards Coors beer and identifies any negative perceptions associated with the brand.
This study includes consumer ratings and comparisons of Coors and its competitors in the South Delaware market to determine their preferences. Study G provides primary data on consumer tastes and preferences. Additionally, Study I is significant as it indicates the profitability level that Larry can anticipate in the South Delaware market based on the chosen price. It also examines other distributors nationwide to help determine the optimal price to charge consumers.
Establishing the appropriate price is crucial as it ensures customer satisfaction and enables profitability.
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