...Mountain Man Brewing Company | To: | Chris Prangel | From: | 001706975 | CC: | David Nasser | Date: | 3/4/2013 | Re: | Bringing the Brand to Light | Comments: | For the first time in the company’s history, Mountain Man Brewing Company is experiencing declining sales in response to changes in beer drinkers’ preferences. Mr. Prangel’s response to this problem is introducing a “light beer” form of the popular Lager. In the past six years, the “light beer” industry as increased at an annual rate of 4% while sales of traditional beer has been declining annually by 4%. Although this seems like a probable solution, there are two major problems Mr. Prangel is facing: 1.) Mountain Man’s current target market will not approve of this new beer, and 2.) bringing in a light version of the Mountain Man Lager could ruin the brand image and ultimately destroy the company. Mountain Man’s biggest target market currently, and pretty much since it started in 1925, is males ages 45-54. Most of these males are blue-collar, hardworking males. It has been known as “West Virginia’s Beer” known for its authenticity, quality and its toughness. To the younger beer drinkers, the market the light beer appeals to, view Mountain Man beer as too strong and a “working man’s” beer. Not only do the younger beer drinkers have their negative thoughts about Mountain Man developed, but the blue-collar customers account for a huge percentage of sales. The brand loyalty rate for Mountain Man Lager is 53% which...
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...from leveraging the companies' combined brand portfolio and would have an unmatched portfolio of imports, local premiums and local core brands. This would increase marketing power. Global production and distribution network would lead to cost reduction and revenue growth. Considering the highly complementary footprint of the two businesses, such synergies would largely be driven by sharing best practices, economies of scale and rationalization of overlapping corporate functions. The deal would create the world’s largest beer maker generating $36 billion in net sales by producing 460 million hectolitres of their popular beers. It would be close to impossible to market every Inbev brand because of high costs, market preferences, cannibalization, etc., therefore Inbev should use a focused Brands strategy. With such a diversified portfolio the company should prioritize and focus its energy and money on a few Brands and invest most of its marketing money on the most profitable brands. InBev must continually manage the integration of the cultures, one that is flamboyant and the other one that is down to earth. InBev also needs to figure out how to integrate the cultures and create a new corporate brand that would generate and sustain the value that the takeover would create. The company should also ensure that it constantly fulfills its commitments made to...
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...CANNIBALIZATION-PRODUCT STRATEGY ‘Companies don’t want replacement products to kill the profits of existing products prematurely. Yet they don’t want someone else todo it either.’ MARKET CANNIBALIZATION is the negative impact of a company's new product on the sales performance of its existing related products. Thus one product may take sales from another offering in a product line. In most cases this doesn’t make much sense unless it’s a defensive move toprotect the product line from a competitor stealing market share becausethe current product line is insufficient. Case1- Coca-Cola This is best illustrated by the "Cola Wars" - the marketing fight betweenPepsi and Coca-Cola, which lasted most of the 1970s and 1980s. The soft drink rivalry pushed Coca-Cola Co. to make one of the most famousmarketing blunders in financial history. In the process of creating Diet Coke,the company's chemists discovered a new formulation for Coke. The newconcoction was sweeter and smoother than the century-old formula uponwhich Coke had been built. In fact, it was similar to Pepsi - the drink that waseating away at Coke's domestic market share.On April 23, 1985, Coca-Cola Co. announced that New Coke was on its way. Because of astrong preference for New Coke in consumer taste tests, Coca-Cola decided to pull the old Coke formula from the shelves. Essentially, thecompany was throwing away a century of branding by favoring the new, relatively unknown formula over the one that consumers had grown...
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...qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwer...
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...CHAPTER - 1 INTRODUCTION Shopping malls are the places where consumer can purchase products even it is planned or unplanned purchase. These stores trade thousands of commodities daily and customers are consuming these commodities at the cost of their revenue. It only dependents on the profits or income of the person, that to what extant and how many times he or she stopover for shopping with stores to purchase products. It is generally seen that punchers buy products which they have not planned and this phenomena of unplanned purchasing is known as impulse buying. Impulsive purchasing, usually explained as a consumer unplanned purchase which is an significant element of buyer behavior. It accounts for as much as sixty two percent of supermarket sales and eighty percent of all sales in definite product categories. Although impulsive purchasing has fascinated attention in consumer research. Unfortunately, there is a lack of research on group-level determinants. 1.1 RATIONALE OF THE STUDY In-store marketing is increasingly becoming an important part of promotion. Advertising is becoming highly diversified. Increased number of media channels has created a clutter for the consumer. Due to the increased demand, the media channels rates have gone up, as they enjoy higher viewership than before. Middle scale businesses can’t afford such higher rates, so they find out newer channels for their product advertisement. This situation has compelled the middle...
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...Perceived Cannibalization Related to Retail Cross Channelization Brandon Toliver, Student, EMSE 6573 Spring 2016 Abstract: The expansion of many businesses in the online environment has been delayed as a result of an assumed negative impact on traditional sales. This presumed cross channel cannibalization should be based on a more empirical analysis that promotes informed decisions. An examination of related existing literature and research will be utilized to present a solution to the following problem: anticipated assumptions, concerns and fears are impacting organizations utilization of the Internet for fear of cross channel cannibalization. The proposed solution presented combines several established quantifiable equations and methods, producing a standardized method of analysis regarding the impact of online sales. This brief paper contends that online sales pose no immediate cannibalization of tradition sales, making these concerns relatively baseless. Problem Overview The phenomenon of concurrent channels being provided by the same company is fairly new, but the emergence of the Internet as an enduring market necessitates the adaption of online retail in order to remain competitive [1][3]. Late entrants into this market are apprehensive about the Internet’s bipolar nature, since it has already demonstrated its ability to catalyze both opportunities and threats [5]. The dot.com bust of the 1990s increased many retailers’ hesitance in expanding their operations...
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...retail sales, toothbrushes currently account for 15.5% of that market. In recent years, many new products have been introduced into the market, making competition fierce. Increased media coverage and awareness of issues, such as gum disease, have lead to the development of a new class of toothbrushes; the super-premium category. Precision marks Colgate’s first foray into this class of toothbrushes. In our opinion by launching Precision as a niche product in the super-premium category, marketers will be able to target the fastest growing segment within the market, production managers will be able to maintain the production schedules and product managers of other lines within the CP family would be less concerned about the potential cannibalization of their products which is a major concern if Precision is positioned as a mainstream brand. Consumer in the oral hygiene market space consider both toothpaste and toothbrush as an important part of their oral care however proper brushing is considered as the most important aspect of their dental care regimen. The toothbrush market is currently segmented in two primary ways. First, segmentation exists with regard to...
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...OVERVIEW Paramount Health and Beauty Company, a leading multiproduct company specializing in shaving products and accessories, is planning to launch a new non disposable razor “Clean Edge”. The company feels that this would be a revolutionary product Paramount needs to establish themselves as an innovative leader in the market. While the existing products by paramount come under the value and moderate product market segment, the company is planning to launch “Clean Edge” in the super premium segment. The problem that they face right now is the decision on how to position “Clean Edge” (niche market or mainstream market) keeping in mind the position of existing products offered by Paramount, Branding and the marketing budget required to introduce the new product in the market. ------------------------------------------------- Calculation for deciding the positioning of CLEAN EDGE RAZOR | | | NICHE | MAINSTREAM | | | YEAR 1 | YEAR 2 | YEAR 1 | YEAR 2 | Calculation for Contribution of Razor | | | | | | Volume of Razor | Units | 1000000 | 1500000 | 3300000 | 4000000 | Sale price for the company | $ per unit | 9.09 | 9.09 | 7.83 | 7.83 | Production Cost | per unit | 5.00 | 5.00 | 4.74 | 4.74 | Total Sales of Razor | $ | 9,090,000.00 | 13,635,000.00 | 25,839,000.00 | 31,320,000.00 | Total Variable Cost | $ | 5,000,000.00 | 7,500,000.00 | 15,642,000.00 | 18,960,000.00 | Total Contribution (Razor) | $ | ...
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...Urban and Regional Innovation Research Unit Faculty of Engineering Aristotle University of Thessaloniki PRODUCT LIFE CYCLE MANAGEMENT IOANNIS KOMNINOS Electronic Engineer, B.Eng M.Sc.(Eng) Thessaloniki 2002 Product Life Cycle Management 2 CONTENTS INTRODUCTION PART 1: PRODUCT LIFE CYCLE MODEL DESCRIPTION 1. PRODUCT DEVELOPMENT PHASE 2. INTRODUCTION PHASE 3. GROWTH PHASE 4. MATURITY PHASE 5. DECLINE PHASE PART 2: ANALYSIS OF PRODUCT LIFE CYCLE MODEL PART 3: PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE: PRODUCT CANNIBALIZATION 1. UNFAVORABLE CANNIBALIZATION 2. OFFENSIVE CANNIBALIZATION STRATEGIES 3. DEFENSIVE CANNIBALIZATION STRATEGIES PART 4: PRODUCT LIFE CYCLE IN RESPECT TO TECHNOLOGY LIFE CYCLE PART 5: USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL PRODUCT LIFE CYCLE ANNEX 1 ANNEX 2 REFERENCES 3 4 4 5 6 7 8 9 12 12 13 14 16 18 20 23 25 URENIO - Urban and Regional Innovation Research Unit http://www.urenio.org Product Life Cycle Management 3 INTRODUCTION All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s...
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...Urban and Regional Innovation Research Unit Faculty of Engineering Aristotle University of Thessaloniki PRODUCT LIFE CYCLE MANAGEMENT IOANNIS KOMNINOS Electronic Engineer, B.Eng M.Sc.(Eng) Thessaloniki 2002 Product Life Cycle Management 2 CONTENTS INTRODUCTION PART 1: PRODUCT LIFE CYCLE MODEL DESCRIPTION 1. PRODUCT DEVELOPMENT PHASE 2. INTRODUCTION PHASE 3. GROWTH PHASE 4. MATURITY PHASE 5. DECLINE PHASE PART 2: ANALYSIS OF PRODUCT LIFE CYCLE MODEL PART 3: PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE: PRODUCT CANNIBALIZATION 1. UNFAVORABLE CANNIBALIZATION 2. OFFENSIVE CANNIBALIZATION STRATEGIES 3. DEFENSIVE CANNIBALIZATION STRATEGIES PART 4: PRODUCT LIFE CYCLE IN RESPECT TO TECHNOLOGY LIFE CYCLE PART 5: USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL PRODUCT LIFE CYCLE ANNEX 1 ANNEX 2 REFERENCES 3 4 4 5 6 7 8 9 12 12 13 14 16 18 20 23 25 URENIO - Urban and Regional Innovation Research Unit http://www.urenio.org Product Life Cycle Management 3 INTRODUCTION All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s...
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... ANALYSIS The given information regarding the Attendance and Revenues is as follows: Revenues | Year | 2006 | 2005 | 2004 | Box Office Revenue | - | 308,673,000 | 209,440,000 | Concessions Revenue | - | 137,323,000 | 85,423,000 | Other Revenue | - | 44,303,000 | 20,923,000 | Attendance | 61,000,000 | 39,945,000 | 28,096,000 | Total Revenue | - | 530,244,000 | 343,882,000 | Box Office Revenue per Patron | - | 7.73 | 7.45 | Concessions Revenue per Patron | - | 3.44 | 3.04 | Based on this information The Incremental Attendance is Calculated and then Cannibalization Rate is incorporated to find out the Incremental Attendance with the Cannibalization Rate of 12.5, 25 and 50% respectively. Attendance | Year | | 2006 (E) | 2005 | Attendance | | 61,000,000 | 39,945,000 | Incremental Attendance | | 21,055,000 | | Attendance with Cannibalization Rate | Cannibalization Rate | Incremental Attendance...
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...Standing Huicun Ning Kai Yuan Zheng Introduction The introduction of B&B Health’s new product, Besthelp Cough and Cold, poses many threats to the sales of Allround’s Cold Liquid product. Up until now, Allround has had strong sales in the cold segment, controlling 21.4% of the segment before the Besthelp release. Upon the release of the new Besthelp product, the marketers of Allround projects that Allround’s market share in the cold segment will drop if nothing is done in response. The marketing team at Allround suggest they respond by releasing a new product, however, it is also noted that if Allround does release a new product, they can experience 5-15% of cannibalization from their current customers. In order for Allround’s marketing team to make the correct decision, we must analyze the cost of cannibalization and the net income that will be gained from the new cough syrup product. Projected: Not introducing new product after Besthelp C&C It is projected that if Allround does nothing in response to the Besthelp C&C release, their market share of the cold segment will drop from 21.40% to 18.4%. The following is the projected sales and income numbers for this drop. | Before Besthelp | After Besthelp | % change | Sales | 214.3 | 184.0 | -14.14% | Net Income | 50.7 | 32.0 | -36.88% | Profit Margin | 23.66% | 17.37% | -26.59% | With no response to the Besthelp C&C release, the Allround product will have sales number decrease to 184 million, a...
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...DEPARTMENT OF ACCOUNTANCY UNIVERSITY OF ILLINOIS MEMORANDUM TO: Mr. Chris Prangel FROM: Merik Ducker - Section AE1 - Group 8 DATE: September 22, 2015 SUBJECT: Product Launch: Mountain Man Light INTRODUCTION The memorandum will analyze the proposed new product launch of Mountain Man Light (MMLight) for Mr. Chris Prangel, the future owner of the Mountain Man Beer Company (MMBC). More specifically, the memorandum will consider the advantages and disadvantages of launching MMLight, as well as a cost-volume-profit analysis of the proposed new product launch. The memorandum will conclude with recommendations for Mr. Prangel’s consideration. MMBC’S GOALS AND BRAND IMAGE MMBC has retained leadership among premium lagers in West Virginia for nearly 50 years by serving brand loyal, middle-aged, blue-collar males at off-premise locations (such as liquor stores and supermarkets). Though respected for its independence and superior quality, MMBC now faces an aging demographic, a shrinking market segment, and changing consumer preferences. Without alienating existing customers, eroding core brand equity, or succumbing to industry titans, MMBC must find a way to remain competitive and restore falling revenues. ADVANANTAGES OF LAUNCHING MMLIGHT Changing Market Segments The launch of MMLight represents an opportunity to capture shifts in market segments and improve MMBC's recent 2% decline in revenues. Light beer consumption is growing at a 6-year compound annual growth rate...
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...the market and meet the above breakeven unit calculation. The loss of sales of premium beer to the new light beer market is estimated between 5 and 20%. The analysis shown in Exhibit 6B shows possible cannibalization in a best (5%) and worst (20%) case scenario. In both scenarios, the Mountain Man Light product proves to be a favorable addition to MMBC’s declining income statement. With MMBC selling 70% of its product to off premise locations, there is a certain risk that these suppliers would buy the same volume from MMBC, just distributed differently, leading to self-cannibalization. It is also possible that cannibalization could be minimal because often this type of product line expansion helps secure additional shelf-space. The cannibalization rate is dependent on the execution of the light beer positioning and campaign execution. If a 5% cannibalization rate was realized, MMBC might not have to obtain the 60% brand awareness with the initial advertising campaign necessary to realize a net profit in two years. Although there are many factors to consider if marketing expenditures were decreased, such as effects on initial market share and subsequent growth of market share, MMBC could decrease advertising expenditures for the launch of Light. As the realized cannibalization rate increases, MMBC would have to achieve a higher brand awareness in order to gain a higher market share to negate the...
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...it has to take one of two paths: &Mac183; New capacity will have to be bought or built when capacity runs out, in which case the opportunity cost will be the higher cost in present value terms of doing this earlier rather than later. &Mac183; Production will have to be cut back on one of the product lines, leading to a loss in cash flows that would have been generated by the lost sales. Again, this choice is not random, since the logical action to take is the one that leads to the lower cost, in present value terms, for the firm. Thus, if it cheaper to lose sales rather than build new capacity, the opportunity cost for the project being considered should be based on the lost sales. How should we treat product cannibalization in capital budgeting? Product cannibalization refers to the phenomenon whereby a new product introduced by a firm competes with and...
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