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  • MKT Assig 3

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    The document discusses the marketing assignment of two beers, MM Lager and MM Light. It provides sales volumes, costs, revenues, and profit margins for 2005. It then calculates the loss in contribution if MM Lager sales cannibalize MM Light sales by 5% and 25%. It also determines the number of additional MM Light barrels that would need to be sold to recover the loss in contribution from cannibalization.

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    The document discusses the marketing assignment of two beers, MM Lager and MM Light. It provides sales volumes, costs, revenues, and profit margins for 2005. It then calculates the loss in contribution if MM Lager sales cannibalize MM Light sales by 5% and 25%. It also determines the number of additional MM Light barrels that would need to be sold to recover the loss in contribution from cannibalization.

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    Download as XLSX, PDF, TXT or read online from Scribd
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    13 views2 pages

    MKT Assig 3

    Uploaded by

    L
    The document discusses the marketing assignment of two beers, MM Lager and MM Light. It provides sales volumes, costs, revenues, and profit margins for 2005. It then calculates the loss in contribution if MM Lager sales cannibalize MM Light sales by 5% and 25%. It also determines the number of additional MM Light barrels that would need to be sold to recover the loss in contribution from cannibalization.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 2

    marketing assignment

    mm lager light
    barrels/sold 520000
    cost 66.93 71.62
    net revenue/05 50440000
    cogs/05 34803600
    price 97 97

    contribution = revenue/barrel - cost * barrels sold


    30.07
    total contribution 15636400
    canibalization 5%
    loss of contribution 781820

    mm lager light
    barrels/sold 520000
    cost 66.93 71.62
    net revenue/05 50440000
    cogs/05 34803600
    price 97 97
    gross margin 30.07 25.38

    contribution = revenue/barrel - cost * barrels sold

    total contribution 15636400


    canibalization 5%
    1 question loss of contribution 781820

    2 question barrels sales light to recover canibalization 30805

    canibalization 25%
    3 question loss of contribution 3909100
    barrels sales light to recover canibalization 154023

    4 question margin new/ margin old 84%


    it can be interpreted that the company can tolerated the maximum of the 84% in canibalization,
    so 5% predict is total acceptable.

    5 question new fixed cost


    adv 750000
    SG&A 900000
    total 1650000

    BEQ - fixed cost/unit profit margin


    fixed cost 1650000
    unit profit margin 25.38
    break even quantity 65012

    6 question mm larger loses 25%


    3909100
    fixed cost 1650000
    total $ to offset 5559100
    unit profit margin 25.38
    MM Light sell needed 219035

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