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Case 1 paper Essay Example

A principal drawback in the sale of Coors is that it is perceived as being very expensive by both retailers and consumers, where price is considered most important by slightly less than one-third of the consumers. However, as long as the taste and brand name are enhanced and supported, this should conquer about two-thirds of the regular beer consumers.The industry demand is arrived at through the per capita approach and the taxes paid approach. The per capita approach involves the calculation of overall consumption in the industry, based on the historical data on the consumption per person and the growth of the target segment of the population that consumes the product (Billings & Jones, 2008). In Table 1 below are shown the US and Delaware per capita (i. per head or per person) consumption, while Table 2 shows the growth of the population in the two counties which comprise the market area. By multiplying the rate of consumption per person in Table 1 with the corresponding number of persons estimated in Table 2, then the result (in Table 3) is the estimated total consumption in units. This describes the total industry demand for the product. For those tables which do not have figures for the pertinent years, such as Table 1, the compound annual growth rate is calculated for the data present, and this trend is extended to those years for which data is not present. From the results in Table 3, the demand based on the population over 21 is growing at a 13% rate in Sussex and a 7% rate in Kent, using the per capita approach.Tables 4 and 5 below show the alternative beer taxes paid approach, where the number of units sold by each company (A to F) is calculated based on the specific tax imposed per unit. Table 4 only has two years’ data, thus the growth rate between them was calculated and presumed to be extended over the next years, to 2006. The number of units are taken to be the consumption rate for those years.The two approaches differ in that the beer tax approach derives its data from the suppliers while the per capita approach calculates the consumption from the demand side. The advantage of using the beer tax approach over the per capita approach is that the units calculated are the actual units released in the market by the producers, and the tax is an amount certain and verifiable from the

References

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Alleman, J H & Noam, E M (1999) The New Investment Theory of Real Options and Its Implications for Economics. Norwell, Massachusetts: Kluwer Academic Publishers

Billings, R B & Jones, C V (2008) Forecasting Urban Water Demand, 2nd edition. American Water Works Association.

Brigham, E F & Houston, J F (2009) Fundamental of Financial Management, 12th edition. Mason, OH: South-Western Cengage Learning

Cafferky, M & Wentworth, J (2010) Break Even Analysis: The Definitive Guide to Cost-Volume Profit Analysis. New York, NY: Business Expert Press, LLC

Miron, J A & Tetelbaum, E (2009) ‘The Dangers of the Drinking Age.’ Forbes. Retrieved from http://www.forbes.com/2009/04/15/lowering-legal-drinking-age-opinions-contributors-regulation.html

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preview essay on Case 1 paper
  • Pages: 8 (2000 words)
  • Document Type: Essay
  • Subject: Marketing
  • Level: Ph.D.
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