Posted on by Gabor Roman

M1S1 – DUCK beer

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Author

László Ketskeméty

Mini Project ID

BMEMPBEER1

Description

The DUCK brewery produces two types of products, a light and a brown beer. Product developers have also experimented with a third product, a liqueur produced by malt fermentation. Market researchers found in the stands set up in stores that consumers would welcome the new product if the price of the product did not exceed 60 euros per barrel. It was then examined how many barrels of malt liqueur production would be worth for the brewery. The development is strongly driven by the management of the plant, because the competing brewery, the DOVE brewery, has already launched a similar concentrated product, beer enriched with whisky. According to DUCK executives, the Whisky beer product is selling well, and the DUCK factory expects its new similar product to be able to drive its rival out of the market.

Management has no idea how much DOVE will realize with their new product, but if they want to squeeze them out, they can only market DUCK liqueur at some kind of advertising price. This will be unprofitable in the short term, but after the elimination of competition, the new liqueur may be dominant in the market, so the initial loss may pay off with great benefit.

What research questions should the answered?

Sector

VET

Data

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Model

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Calculation

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Solution

At the producer meeting, the management asked a professional committee appointed by them to answer the following questions:

  1. What improvements need to be made to bring the total revenue to at least EUR 120000?
  2. What production plan should be chosen in the rest of the year for the introduction of a new product, assuming that the brewery’s loss due to each unit of revenue loss is EUR 1 and each additional tonne of malt used generates a loss of EUR 30 for the brewery?
  3. What permits are required to obtain from the authorities in order to start series production of the liqueur? Does the product comply with all health, consumer protection, and patent regulations?
  4. Malt is available in limited quantities; the stock available cannot be increased indefinitely. Since the production of the new product also requires the use of malt for brewing, to what extent does this limit brewing capacity? How much extra malt would you need to get to maximize your total income?
  5. What promotional strategy should be used to launch the new product on the market and at what cost?
  6. What should the new product look like? What brand is being marketed with? In what unpacking and wrapping should it be marketed?

 

Presentation

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