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MENDING MOLSONChris Alimena, Alexandra Bruno, Irene Hartnett, Stanley Stilwell, Anthony Yu
20%80%
Source: Apex publisher
Preview
Preview
Market Share In US Beer
Market
Source: Philip H. Howard, 2011
Source: S&P Net Advantages
20%80%
Source: Apex publisher
Preview
Drinking population: 56.1%
Women
Source: US Census Bureau
One Standard Drink
Preview
Television advertisement
Advertising Agency
Preview
Product Development Benchmark
• 6% alcohol
• 4 years of
development
• Issues with taste and
higher alcohol content
• 9% alcohol
• 2 years of
development
• Use the lessons
learned in
development of
Platinum
Chicago, IL
New Years Eve
http://www.millercoors.com/who-we-
are/locations.aspx
Costs
Category Assumptions Price
Product Development Estimated development costs $1,500,000
Focus GroupsBase Price- $61,000 + 8 Focus groups, with 10 people in each, paid $50 per person $65,000
Production costs $0.27 per bottle x 2,000,000 bottles $540,000
Advertising
Network Television Ad Estimated cost for prime time television $600,000
Print Ads Cosmopolitan full page ad price $289,110
Billboards $600,000
Social Media Facebook, Twitter, etc… $0
AgencyPrice based off of previous product campaign $750,000
Miscellaneous Any unpredicted costs $500,000
Total $4,844,110
Looking back
MENDING MOLSON
Any
Questions?
Breakdown of Revenues
Price Per
Bottle $3.00
Number of
bottles
expected to
be sold in
the first
year
2,000,000
Revenue $6,000,000
These numbers are estimated based on the prices and bottles sold of Molson’s current products
Molson’s sells about 3.7 millions bottles per brand each year
Acsia is an above premium product and will be priced higher than the average beer
Projected profit for Acsia’s First
Year
Profit=revenue-cost
Profit=$6,000,000 - $4,844,110
Profit=$1,155,890
These numbers are based on high estimates
for costs and low estimates for profits
These numbers are for the first year only, as
the brand grows we expect profits to grow as
well and reach the success of Molson’s current
products
Molson’s debt-to-capital ratio
Molson’s debt-to-capital ratio in 2011 was
20.4%
The industry average according to Yahoo
Finance is 52.4%
This means that Molson can issue afford to
issue more debt in order to finance
We choose to issue more debt instead of using
equity because Molson is already lagging
behind ABI in net profits each year by $6.92
billion, so we want to hold onto our profits and
ride on some more debt to finance our plan.
Molson Coors-SAB Miller Joint
Venture
In 2008 Molson Coors and SAB Miller entered
into a joint venture
This created what is now known as Miller
Coors
This applies to the two companies in the
United States only
Average Women Alcohol
Consumption
According to Gallup’s Alcohol Consumption
Measures by Key Demographics show:
64% of women drink alcohol
When drinking alcohol, women choose:
wine 52% of the time
liquor 22% of the time
beer 23% of the time.
These stats are one of the reasons why we
chose this segment to market to. We believe
that Molson has an ample opportunity to offer
its products to the female segment of the
market.
Average Women Alcohol
Consumption by Age
Age Average Number of drinks per week
18-34 years 5.4
35-54 years 3.6
55 and older 3.9
Taxation on Beer in America
• Taxation on beer in America is based on the Alcohol Proof, per gallon within one barrel of a Malt Beverage.
• The average rate of all states tax on beer equals $0.26 per gallon.
• 32 States are above this nationwide average.
• 18 states are below this nationwide average.
• The median rate in the US is $0.185 per gallon of beer.
• With the product Acsia, Molson can focus on the average rate of states tax on beer in the US, therefore, we can presume that the overall cost of tax will not hurt this product on a grand market scale.
Source: Center for Science in the Public Interest
Product Evaluation Process
Implement new product
Analyze data
Conduct product trial
Outline committee process
Determine information required
Identify need for new product, technology, or practice innovation
