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    Mountain Man

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    Meera K
    Mountain Man generated $50.4 million in net revenue in 2005 with a 31% gross margin, though annual revenue was declining 2% and their light beer product was growing 4% with a market share of 0.68%. Their light beer variable cost was $71.62 per barrel and contributed $30.07 per barrel while cannibalizing 20% of larger beer sales. Projections showed light beer could increase market share to 3.4% by 2010 while maintaining profitability.

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    Mountain Man

    Uploaded by

    Meera K
    51 views2 pages
    Mountain Man generated $50.4 million in net revenue in 2005 with a 31% gross margin, though annual revenue was declining 2% and their light beer product was growing 4% with a market share of 0.68%. Their light beer variable cost was $71.62 per barrel and contributed $30.07 per barrel while cannibalizing 20% of larger beer sales. Projections showed light beer could increase market share to 3.4% by 2010 while maintaining profitability.

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    Marketing Management

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    Mountain Man generated $50.4 million in net revenue in 2005 with a 31% gross margin, though annual revenue was declining 2% and their light beer product was growing 4% with a market share of 0.68%. Their light beer variable cost was $71.62 per barrel and contributed $30.07 per barrel while cannibalizing 20% of larger beer sales. Projections showed light beer could increase market share to 3.4% by 2010 while maintaining profitability.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    51 views2 pages

    Mountain Man

    Uploaded by

    Meera K
    Mountain Man generated $50.4 million in net revenue in 2005 with a 31% gross margin, though annual revenue was declining 2% and their light beer product was growing 4% with a market share of 0.68%. Their light beer variable cost was $71.62 per barrel and contributed $30.07 per barrel while cannibalizing 20% of larger beer sales. Projections showed light beer could increase market share to 3.4% by 2010 while maintaining profitability.

    Copyright:

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

    Case info

    Net Revenue of Mountain Man 2005 $ 50,440,000.00


    COGS 34,803,600
    Gross Margin 31%
    Annual revenue loss 2%
    Annual revenue growth of light beer 4%
    No of units sold in 2005 in barrels 520,000
    Selling price per barrel Larger beer $ 97
    Variable cost per barrel Mountain Man Lager beer $ 66.93
    Increase in variable cost for Light beer $ 4.69
    Variable cost per barrel Mountain Man Light beer $ 71.62
    East central Light beer market in 2005 $ 18,744,303
    Contribution of Light beer $ 30.07
    Contribution of Light beer $ 25.38
    Cannibalization 20%

    Year 2005
    Variable cost per barrel of Light beer 18,744,303
    Light beer market share
    Light beer estimated sales in barrels
    Light beer estimated revenue
    Light beer COGS
    Gross Profit
    SG&A (ad campaign $750k)

    Larger beer Revenue loss due to reduction (2%) 50440000


    Cost of Cannibalization

    Fixed cost for 2 years


    Break even volume
    Break even sales
    Exhibit 1 Market share
    Exhibit 1 Base 0.68%
    Exhibit 1 Growth 0.68%
    Page 7 Net profit Margin 6.20%
    Page 7
    Page 2
    Calculated
    Page 6
    Page 6

    Exhibit 5
    Calculated
    Calculated

    2006 2007 2008 2009 2010


    19494075 20273838.1248 21084792 21928183.31578 22805310.648415
    0.68% 1.36% 2.04% 2.72% 3.40%
    132560 275724 430130 59644658.62% 775381
    $ 12,858,291.95 $ 26,745,247.25 $ 41,722,585.72 $ 57,855,318.86 $ 75,211,914.52
    $ 9,493,926.49 $ 19,747,367.10 $ 30,805,892.67 $ 42,717,504.50 $ 55,532,755.85
    $ 3,364,365.46 $ 6,997,880.16 $ 10,916,693.05 $ 15,137,814.36 $ 19,679,158.66
    $ 1,650,000.00 $ 900,000.00

    49431200 48442576 47473724.48 46524249.9904 45593764.990592


    612946.88 600687.9424 588674.183552 576900.69988096 565362.685883341

    $ 3,763,634.82
    148291
    $ 14,384,262.32

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