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According To The Information Received From Consultant
According To The Information Received From Consultant
Date: 26-11-2019
Case Study
Each year zymurgy Distributors has the beer concession for the fair.
The profit usually amounts to about 2 Dollar per attendee. That’s more
profit in a weekend than your yearly salary plus bonus. You were in
charge of deciding which beers to sell at the Wing Thing this year, and
you were desperate to make the right decision.
How much light beer versus regular beer? How much of premium and
specialty beers? How many beer stations should be located around the
fair? Where should they be located? How many people should you hire to
staff the beer stations? Lots of questions and you were responsible for
having the correct answers.
But this year, things were bad. Thirty-nine thousand people attended, a
new record. But the profits from beer sales were less than 50,000 Dollars.
You should have made almost 80,000 Dollar in profits. You knew you did
badly, and the visit from your boss just made it worse. You wouldn’t get
fired, but there wouldn’t be a bonus this year. Even worse, your boss
wants to take the Wing Thing away from you next year.
To keep the Wing Thing, you’ll have to analyze what you did wrong,
explain to your boss how you ‘d fix the problem, and make a great plan
for next year. You’ve been thinking about what went wrong, and you have
plenty of ideas.
One thing was that you were unsure of yourself, and so you hired a
marketing consultant to make recommendations. That report was mailed
to you and arrived the Monday after the Wing Thing weekend. Several
pieces of information were in the report. One Prediction was that 10
percent of the people at the fair would bring a pet. That was interesting,
but it didn’t help to predict beer sales.
Age and gender have been two good predictors in the past. People aged
21 to 25 tend to purchase less-expensive beers. Those older than 25 tend
to purchase more-expensive beers which have higher profit margin.
Women tend to drink more light beer.
Weather is also a predictor. The warmer the day, the more beer that will
be sold. The weather forecast for next two days has always been pretty
accurate, so you could have used that information to predict beer sales.
ASSIGNMENT
Q1: Information should be timely, accurate, complete and relevant.
Discuss the information you received from the consultant in these terms.
Be as specific as you can. Don’t just say something was wrong, explain
why it was wrong and what could have made it right.
Q2: Assume your boss lets you run Wing Thing beer sales next year. Also
assume that you want to collect information during Wing Thing that will
help predict beer sales for the following year. What information should
you collect? How is the information timely, accurate, relevant and
complete?
ANSWERS
(1)
According to the information received from consultant, as people aged 21-25
purchase Less Expensive Beers so most of people who attended Wing Thing
were of age 21-25. So, profit was less. This loss can be managed if most of
the people attending Wing Thing are above 25.
It is also possible that we got Short of Special Beers and people above 25
cannot buy, this factor also contributes to less profit. It can be adjusted if we
have sufficient quantity of special beers to serve all people.
Moreover, while arranging Wing Thing we do not focus on Weather
Conditions, it was not much warmer so the sales were less. So, weather
prediction is necessary for best sales.
Other possibility is that the Number of Women attending Wing Thing were
more than men and as women tend to buy lighter beer so less profit was
earned. So, fair should include some factors that allow more men to attend
Wing Thing.
It is also possible that while counting no of people who attended Wing Thing,
10% People’s Pet Count was also included and so the predicted profit was
more as compared to the people attending Wing Thing. So, counting of people
to predict correct profit is important and it can be corrected if we have proper
mechanism of counting only people not the pets.