2. Academic Version
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5. Academic Version
1.0 Executive Summary
Yellowhead Brewery is one of two current microbreweries in the Edmonton area. They have one
product offering, a craft lager, sold in two main package forms: keg and growler. As assessed in
the market evealution, the target market is males between the ages of 18-30 who are highly-
educated and want to satisfy their esteem and belonging needs. Yellowhead lager allows the
target market to fufill their need to socialize and their desire to support local, organic products.
Sales and expenses are both expected to grow; however, the sales will grow enough to generate
higher profit.
Yellowhead's strict brewing standard, derived from the German brewing techniques, separate its
lager from the competition. Also, its historic and local relevance make it a differentiable.
Because of its local nature, Yellowhead will become a staple in the Edmonton community. This
is true not only for their product and experience offered in their craft beer, but also for their
community involvement. They strive to support local acts and arts. This shows their character
and further separates them from the other breweries.
Yellowhead will be positioned as a quality craftbeer that creates a memorable and unique
expereince. This capitalizes on the aformentioned esteem and beloning needs of the target
market.
Yellowhead aims to become the preimer craftbeer in the Edmonton area. Eventually, expansion
to the rest of the province will occur. However, currently, there are financial and logistical
barriers. Once the company's growth and revenues stabilize, they will be able to expand.
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2.0 Situation Analysis
The situation analysis examines the internal and external business environment. It is important to
be cognoscente of the micro and macro environment in order to capitalize on trends and
opportunities and minimize threats and weaknesses. Yellowhead Brewery's market, the company
offering, a SWOT analysis and the competition will be explored in this section.
2.1 Market Needs
Beer can be found anywhere. A company that wants to succeed with a product that is prevalent
like this must differentiate themselves in the industry. This is especially true for a small brewery,
like Yellowhead. Yellowhead's lager is distinct in Alberta because of the German purity laws and
simple ingredients that enhance it's taste. It is not expensive; it saves the customer money and
minimizes their perceived financial risk. Because it is a craftbeer, the customer's experience is
heightened because they are proud to support local, high-class beer. This boosts their self-esteem
and leverages their social need to belong.
Needs of consumers will often vary due to personal taste. However, this creates an opportunity
for new products. Customers want to try something new and trendy so they feel special. They are
trying to broaden their taste and palate to impress their peers. This has been why Yellowhead has
experienced gradual growth among consumers. As Yellowhead gains notoriety, it will move from
a trendy beer into a beer staple. Many breweries and other alcohol companies have experienced
this. For example, Alley Kat, Yellowhead's main competitor, has slowly moved away from a beer
one only has once and a while, to one that is sought out by their target market.Yellowhead
currently only offers one type of beer: a lager. This contrasts the industry because most
microbreweries carry three options. They do this in order to satisfy customers' wants and
capitalize on customization. Yellowhead needs to keep this in mind because they will only
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capture customers who are looking for a lager.
Beer is becoming more of a cultured product. This is especially true for craftbeer. This differs
from the traditional image as it has become more prestigious. Consumers are learning tasting
methods and developing their palates as the beer culture shifts. There are even establishments
that only serve high-quality beer and no other alcohol. Formerly, wine was the only alcoholic
beverage to have distinct bars that sold no other beverages.
Some breweries have also been able to incorporate their own event centers where consumers can
be immersed in the culture of their brewery. This allows for a unique experience to learn about
the beer. This was popularized by wineries during the summers for weddings and other events.
Breweries may also have these tasting rooms, so that they can develop their palates while getting
to know the brewers.
2.2 The Market
Yellowhead's current market consists of the Edmonton area. Immediately, any person below the
age of 18 can be eliminated from the potential market as they are not of legal drinking age. The
following market analysis shows that there is nearly a 50/50 split between men and women,with
slightly more men, over 18 in the metropolitan area. Both are expected to grow at about 1.5%
over the next several years. This is huge potential for Yellowhead. If Yellowhead were to expand
throughout the province of Alberta, their potential market would grow by nearly five times. Any
market share that Yellowhead Brewery can gain will help increase revenues and build a loyal
base.
Alberta has the highest disposable income across Canada which increases the amount one could
spend on beer. Overall, Canadian spend approximately $1,149 on alcohol and tobacco products
over one year (Statistics Canada, 2012). If Yellowhead can capture even a small fraction of this
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expenditure, they can expect to grow substantially.
Table: Market Analysis
Market Analysis
2013 2014 2015 2016 2017
Potential Customers Growth CAGR
Male 18+ 2% 332,000 336,980 342,035 347,166 352,373 1.50%
Female 18+ 1% 322,000 326,669 331,406 336,211 341,086 1.45%
Other 0% 0 0 0 0 0 0.00%
Total 1.48% 654,000 663,649 673,441 683,377 693,459 1.48%
2.2.1 Market Demographics
The demographic for microbreweries in Canada consists of anyone who is of the legal age to
consume alcoholic beverages. In Alberta, people over the age of 18 are potential consumers. In
Canada, more men drink than women. Men also consume higher volumes of alcohol compared to
women (Helath Canada, 2008). Those with a post-secondary education consume more alcohol
than those with a lower education, like those without a high school diploma. Those with a higher
income also drink more than those with a lower income (Health Canada, 2008). Household
composition is not a huge factor as males drink relatively the same amount of alcohol regardless
of their marital or family status. Those who drink craftbeer are looking for a social experience
that demonstrates their masculinity, like at sporting events. They also enjoy supporting local
products. Craftbeer drinker are more open minded than other beer drinkers; they are looking for
a social experience and they are curious. Craftbeer drinkers enjoy organic beers more so than
their regular beer counterparts because of their eco-consciousness (Kegworks, 2009).
The craftbeer drinker is looking for the social experience. They are environmentally conscious.
They are not loyal to any one beer but seek an experience. They do support locally, but they want
to try something new. Because of Edmonton's size, the craftbeer drinker is more likely to seek
trendy establishments that carry both the craftbeer and the experience (Kegworks, 2009).
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Table: Market Demographics
Market
Demographics
Market
Segments
Educated Social Class Edmonton Area Behavioural
Health
Concsious
Male 18+ Appeal to their
status
Appeal to the middle-
upper class
Local
aspect/History
Experience
oriented/customized
Eco-
friendly/organic
Female 18+ Appeal to their
status
Appeal to the middle-
upper class
Local
aspect/History
New flavours
Low
Calorie/organic
Other - - - - -
2.2.2 Market Trends
Social trends have a big influence on the industry. Low calorie drinks have started to become
popular as consumers are more aware of their health. Consumers also prefer “greener” products;
this means minimizing the impact on the environment which can occur with the help of a well
organized sustainable supply chain.
During the fiscal year ending March 31, 2010, liquor stores and agencies sold $19.9 billion worth
of alcoholic beverages which is shows 2% incremental growth from the previous year. Beer
remained the alcoholic drink of choice for Canadians (Statistics Canada, 2010). In terms of
volume, beer stores and agencies sold 2.4 billion liters of beer in 2010, up 1.4% from the
previous year.
On a per capita basis, beer sales amounted to 83.6 liters per person in 2010, down from 85.6
liters in 2000 (Statistics Canada, 2010). In contrast, during the same period, beer sales in terms of
value increased by almost $53 to $326.4 per person. The growth in volume of sales of imported
beer continued to outpace that of domestic products (Statistics Canada, 2010). The volume of
imported beer sold increased by 7.8% in 2010, while volume sales of domestic products were up
by less than half of one percent. In 2010, imported beer captured 14% of the beer market in
Canada, which doubled its market share of 7% in 2000. Of all the imported beer sold in Canada,
24% came from the United States, 20% from Mexico and 17% from the Netherlands (Statistics
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Canada, 2010). The only statistically significant change in past year in alcohol use was in Alberta, where
the percentage increased to 80.0% from 73.8% in 2010.
The current trends suggest that microbreweries will be around for the foreseeable future. This is
because of the growing demand for customized and local product offerings. This is especially
true for craftbeer as it offers the customer a beverage and an experience. Capitalizing on this
customization is essential for both the macrobreweries and microbreweries. It is also important
for breweries to figure out how they are perceived by the target market. This determines their
positioning and how they should reach their customer base. Many breweries offer a selection of
flavors and drafts, but do not address the unique culture that their beer offers to the consumer.
Building an atmosphere around a beer is extremely important as beer satisfies esteem and
belonging needs. This means that while the product offering is important, it is how the consumer
feels about the beer that will push them to buy. Without positioning and a beer culture, there is
no way to make a differentiation between two beer offerings. An example of this is Old-Style
Pilsner, a beer associated with Saskatchewan, who's image of tradition and rowdiness produce a
perceived 'redneck' kind of beer. In contrast, Steamwhistle, another pilsner, represents innovation
and a community style beer. They are similar types of beer, taste-wise, but because of their
completely different cultures and positionings, they are completely distinguishable. This has made
them successful breweries.
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0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2013 2014 2015 2016 2017
Male 18+
Female 18+
Other
Market Analysis (Trends)
2.2.3 Market Growth
The industry has become stagnant in terms of growth overall as an industry. It is, however,
growing for microbreweries throughout the country. This is most evident in the recent success
and openings across the country. This newfound growth can be attributed to changing consumer
preferences(Holloway, 2004). Breweries are now inheriting a completely new and wiser beer
drinker who has an opinion about what kind of products they consume. This has led to the
demand for customized beers that many breweries currently provide. Most recently, hoppier
beers and flavored beer, such as vanilla or blueberry, have been created in order to appeal
towards beer drinkers who want to try something new. This microbrew movement has created
interest among bar owners which has lead them to open up brew-pubs or bars that focus soley on
microbrew beers.
This newfound trend towards customization in beers has not been overlooked by the
macrobreweries. They have started to create more specialized options of some of their current
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products. However, this has not been as successful as microbrews (Mcdonald, 2009). This has
led majer brewers to purchase microbreweries instead of creating new ones.
Among the consumers who have purchased craftbeer, young men who are looking for newer
options that differ from their fathers have proven very to be lucrative for the microbreweries
(Holloway, 2004). However there is also a rising trend among women which has lead many
breweries to create options that are more appealling to their taste. These include fruity and
distinct flavors. However, most women still favor other alcoholic beverges, like wine or mixed
drinks (Health Canada, 2008).
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
Male 18+ Female 18+ Other
Market Analysis (C.A.G.R)
2.2.4 Macroenvironment
The macro environment is composed of several main factors. They are important to monitor in
order to respond and react to the ever changing business environment. The factors are political,
economical, social and technological. The political portion relates to the government and legal
aspects. The economical factors reflect the consumer and business financial situations. The social
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factor shows the market and consumer trends in the industry. The technological aspect pertains
to new developments within the industry.
Political:
Alberta's beer movement is completely privatized. Microbreweries must follow rules and
regulations set by Alberta Gaming and Liquor Commission. Microbreweries can sell directly from
their location or can distribute their beer through retailers or restaurants (Hughey, 2011).
Breweries, and brew pubs must have a Class E or liquor manufacturing license before they can
manufacture their own beer (AGLC, 2012). Yellowhead must also have a Class A license so that
they can sell alcohol in their event room.
Economical:
Alberta's average wage is $23.80 an hour,which is equivalent to $3808 a month or $45,696 a
year before taxes (Government of Alberta, 2011). Of this, the average person spends $1,149 a
year on liquor and tobacco products (Statistics Canada, 2012). Yellowhead Brewery sells their
beer for about $5.25 a pint and $9.00 for a growler. Alley Kat, the other microbrewery in
Edmonton, sells a pint of a comprable lager for about $5.50-$7.00. This makes both Yellowhead
Brewery and its competitor relatively affordable in Alberta’s economy.
Social:
The product beer can be viewed through several social stand points. First as an enhancer of social
engagements that helps having a memorable experience. Secondly it can be viewed as a weapon
that ruins lives whether it be drinking and driving or the alcohol causing someone to become
violent .These two stand points are very different and can create tension in the public eye. A
brewery or supplier of beer may try to create a positive image of their brand to avoid these social
stigmas. They may even try to create a Corporate Social Responsibilty (CSR) program to bring
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positive public attention to their brewery and brand over the product. They must be careful
though to support something that is not hypocritical to their product.
Technological:
Technology has allowed business to create a closer relationship with their customers. Companies
can learn what their target market interests are through their likes and preferences from social
media websites. New themes could be created from what a company learns about their market
by customizing the message to increase interest in their company.
2.3 The Company
Yellowhead Breweries was established two years ago on Edmonton's north side. It's name comes
from Alberta's history and a former brewery that operated in the 1800s (Yellowhead, 2012). It
offers one lager in keg and growler form.
This plan aims to set the marketing strategy for Yellowhead Brewery from January 1, 2013 to
January 1, 2014 inclusive. It will provide guidance for the communication plan moving forward.
This is the strategy document. Further creative development will be needed in order to create
advertisements and other specific tactics. Yellowhead's current situation and business
environment have been analyzed, which has lead to the marketing strategy creation. This led to
the definition of specific marketing mix factors and the necessary financials. Finally, the controls
and implementation complete the document.
This marketing strategy is based on increasing the brand awareness and sales of Yellowhead. It
is essential that Yellowhead's core competencies and differentiating factors are communicated to
the target market. They need to understand the product and experience offering that the
Yellowhead lager enables.
The document will affect the communications team and sales team. They are responsible for
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several tasks and it is vital that they carry out these for the plan to be successful.
2.3.1 Mission
Yellowhead Brewery aims to provide quality taste at an affordable price for the craftbeer drinker
in Alberta. They strive to improve the Canadian brewing standard by utilizing the German
brewing technique. Their historical and local qualities are important for the consumer and
demonstrate Yellowhead's core values. Their heritage is important to keep Alberta's history
alive. Quality, experience, history and local culture embody Yellowhead which translates into
their beer.
2.3.2 Product Offering
Yellowhead Brewery offers a premium lager in the Edmonton area. It is one of the only
breweries in Canada that follows the strict German purity laws that ensures the fresh, natural
taste of Yellowhead is enjoyable. Yellowhead's name is steeped in history, adopting the name
from the 1894 beer situated in what is now the Royal Glenora Club. The term Yellowhead is
significant in Alberta history, referring to a blonde explorer during the foundation of the province.
The beer is offered in two formats: kegs and growlers. Kegs are sold to restaurants, pubs and
bars around the Edmonton area. Having the beer on tap allows the freshness to be preserved.
Growlers are refillable bottles that carry approximately six cans worth of beer. They are
ecofriendly which matches Yellowhead's commitment to the Edmonton community. Although
Yellowhead only offers one product in different packaging, its superior quality sets it apart from
the competition.
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2.3.3 Positioning
Yellowhead needs to position itself as a historical brewery: not onlyone with a rich history, but
one that has also adapted. This involves highlighting the history of the brewery throughout the
past 100 years. A few other breweries have done this , which has allowed them to reinvent their
brand while staying true to its history. Examples of this include Sleeman, Pilsner, Alexander
Keith’s and Guinness.
Yellowhead has adapted from its history, suggesting that they are a cultural icon rather than just
a brewery. This is a very distinct advantage that other breweries do not have.
By adapting over time it also illustrates that the brewery wants to grow with the consumer and
adapt to different tastes. By positioning themselves in this way, Yellowhead can leverage the
local and historic aspect of the brewery.
2.3.4 SWOT Summary
Considering the company’s strengths and opportunities, coupled with current market trends in
the province, Yellowhead Brewery has the resources available to become a strong player in the
industry. Its strengths and opportunities surpass the weaknesses and threats. With a viable
marketing plan, the company could easily face threats and overcome weaknesses, becoming a key
player in the marketplace.
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2.3.4.1 Strengths
• Low competition
• High barriers to entry
• Business concept
• Local business
• Competitive pricing - no transportation costs
• Freshness
• Social trends
• Product quality
• Enforcement of German standards
• Historic location
2.3.4.2 Weaknesses
• Only known in the downtown core
• Not a strong brand presence due to the fact that the company is new in the market
• Supply chain not fully developed
• Product line not fully developed – only one beer
• Company and product positioning
• Low market share
• Target market vaguely defined
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2.3.4.3 Opportunities
• Regional expansion
• Provincial in the short term and inter-provincial in the long term
• Improve packaging system
• Expand product line
• Supply chain expansion - sustainable supply chain management
• Increase positive image by working with local festivals
• Expand marketing strategy to compliment company growth
2.3.4.4 Threats
• Drinking and driving laws
• New brewery opening up next year in Saint Albert
• Expansion of Calgary breweries within the province
2.3.5 Historical Results
Because Yellowhead is a relatively new company, there is little historical data to analyze.
However, from year 1 (2010) to year 2 (2011), their revenue increased by nearly 150%. This
shows huge growth and that they have been successful. The growth can be partially attributed to
their increased advertising and expanded distribution. From year 1 to year 2, their was an
emphasis on sales channels and relationships with local bars, pubs and restaurants. This boosted
the amount of establishments where potential customers can experience the lager. It important
for Yellowhead to continue to build relationships with these key distributors because in order to
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increase sales and decrease their current deficit.
Table: Historical Data
Historical Data
Variable 2010 2011 2012
Industry Revenue $715,000,000 $725,000,000 $735,000,000
Company Market Share 0% 0% 0%
Company Revenue $110,825 $329,875 $396,900
Industry Variable Costs $425,000,000 $435,000,000 $445,000,000
Company Variable Costs $219,554 $185,640 $185,640
Industry Gross Contribution
Margin
$290,000,000 $290,000,000 $290,000,000
Company Gross Contribution
Margin
($108,729) $144,235 $211,260
Marketing Expenses $7,247 $5,874 $8,000
Company Net Contribution Margin ($115,976) $138,361 $203,260
2.4 Competition
The beer industry is exteremly saturated. This is because of the high start up costs and
competition from huge, identifiable breweries. In the local craftbeer market, their is only one
other brewer besides Yellowhead: Alley Kat Brewery. It is essential for Yellowhead to monitor
Alley Kat as they have been established in the area longer and already hold most of the market
share. Yellowhead must also be aware of the major international breweries, as they are a
substitution for Yellowhead Premium Lager. The major breweries are identifiable and pose little
financial or status risk to a beer drinker. If Yellowhead can understand it's competition, they will
be able to leverage their core competencies and differentiate themselves in the highly competitive
market.
2.4.1 Direct Competition
Although the beer brewing industry is extremely competitive, the mircobrewing/craftbeer industry
in Edmonton is small,composed of two main players: Yellowhead and Alley Kat.
Alley Kat Brewery is a craft brewery located on Edmonton's south side. It is the longest running
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microbrewery in the metropolitan area and because of this, it is well established and recognizable
(Alley Kay, 2011). Like Yellowhead, its is sold in a variety of serving establishments, like pubs
and restaurants, but it can also be found in liquor stores. Alley Kat is also similar to Yellowhead
as both have an entertainment space for functions and tastings.
Alley Kat offers many flavors of both lager and ale and is responsive to seasonal change. For
example, in the fall, it offers a pumpkin pie beer. Alley Kat's website is interactive and informs
people what kind of food to pair a particular beer. 50 Litre kegs cost $195: $20 more than
Yellowhead (Alley Kat, 2011). However, because there is high understanding in the Edmonton
area about Alley Kat, there is little price sensitivity displayed.
A potential direct competitor is Hogshead Brewery which will be located in St. Albert over the
next year. They are not established yet. In the short term, they are not competition as they do not
have a product, customer base or any brand awareness. However, in the long term, they must be
monitored as they may take away some of Yellowhead's target market.
The Competitive Analysis table shows a numeric difference between Yellowhead, its direct and
indirect competition. It is rated on a scale from 1 to 5: 5 being the most desirable and 1 being the
least desirable. For example, a 5 for price indicates the lowest price while a 5 for loyalty indicates
fierce support for the beer.
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Table: Competitive Analysis
Competitive Analysis
#1 #2 #3 #4 #5 #6
Competitor Alley Kat Yellowhead Guiness Alexander Keith's Molson Budweiser
Product and/or Service Alley Kat Yellowhead Guiness Alexander Keith's Molson Budweiser
Quality 4 4 5 3 2 2
Selection 5 1 2 4 3 3
Price 3 5 2 3 5 5
Distribution 4 3 5 4 5 5
Location and Physical
Appearance
Alley Kat Yellowhead Guiness Alexander Keith's Molson Budweiser
Traffic 3 2 3 3 4 4
Appearance 2 3 5 4 4 3
Visibility 2 3 5 4 5 5
Convenience Factors 2 2 5 3 5 5
0 0 0 0 0 0
Added Value Factors Alley Kat Yellowhead Guiness Alexander Keith's Molson Budweiser
Pre and Post Sales Service 3 4 2 2 3 3
Experience 3 4 4 4 2 3
Expertise 3 3 5 4 2 2
Reputation 4 3 5 4 4 4
Image 4 2 5 4 4 4
Stability 3 2 4 4 4 4
Strategic Alliances 0 0 0 0 0 0
Other 0 0 0 0 0 0
Other Marketing Activities Alley Kat Yellowhead Guiness Alexander Keith's Molson Budweiser
Established Sales Channels 3 2 5 4 5 5
Advertising 3 2 5 4 5 5
Post-purchase Support 3 4 3 3 3 3
Incentives 0 0 4 3 5 3
Loyalty Components 4 2 4 3 3 3
Other 0 0 0 0 0 0
Total 58 51 78 67 73 71
2.4.2 Indirect Competition
There are many beers available for consumption that are available at serving stablishments and at
liquor stores. However, these fall outside of the local microbrewery/craftbeer category. It is
important to understand these, however, because they are a substitute for Yellowhead Brewery.
There are two distinct types of substitutes: Highend/Imports and Major Breweries.
Highend/Imports - These beers display recognizable brands and tastes. There is a specific
perception about what kind of experience one can expect from a highend or import beer. This
category is understood by both casual beer drinkers and beers experts. It is perceived as higher
quality, so naturally, it is a higher price. Examples of this indirect competition include: Guinness,
Stell Artois, Heineken and Alexander Keiths.
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Major Breweries - These brands are also recognizable, but are not held in the same esteem as
the imports. They offer consistent taste and are a cheaper option. It is understood by alcohol
drinkers. Examples of this category are Molson Canadian, Budweiser and Coors Light.
3.0 Marketing Strategy
The strategy of Yellowhead will be to target consumers with there history, culture, and style of
beer. The key demographics that we will be targeting will be of consumers whom are developing
there taste for beer and want to experience the culture that is associated with it. Things that will
be done to attract this target market include accomplishing our marketing, and societal objectives
while highlighting our positioning strategy. This will help to solve critical issues and differentiate
the brewery from Yellowhead’s competitors.
3.1 Value Proposition
The most valuable thing that Yellowhead Brewery offers is it’s local beer and the way that it is
created. The beer is fresh in comparison with many of Yellowhead’s competitors, because the
brewery is located directly in the middle of Edmonton. This has allowed their product to be
transported to local establishments at a far faster rate than competitors. This creates optimal
freshness.
The name creates a cultural preference for Yellowhead among other craftbeers in the Edmonton
market.
Yellowhead is known for the their location. Since the brewery has an event center that is located
downtown, it is an optimal place for many organizations to host functions, as well as private
events like weddings.
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3.2 Critical Issues
An issue that is currently affecting Yellowhead Brewery is brand awareness. There is knowledge
among some consumers, especially in the downtown core, but not city-wide. This is especially
detremental among Yellowhead’s key demographic. Without an established brand, it is difficult to
become successful within the first five years of the business opening.
Other pressing issues that are affecting Yellowhead include competition that is starting to come
into the Edmonton area. Although beer-pubs encourage average beer drinkers to consume more
craftbeer options, they also introduce customers to beers that are not offered locally. This
iscreases competions and may eliminate some potential customers. Exmaples of these new pubs
include Craft, Underground Tap and Grill, MKT and Mercer's Taverns.
3.3 Financial Objectives
1. Increase sales by 5%.
This will be achieved by building relationships within the distribution channels, particularly within
the pub and restaurant channels. This increases the rebuy by the establishment and the
knowledge of the beer. In turn, this will increase sales and customer retention.
2. Decrease deficit by 20%.
This will be achieved by increasing sales. Any profit made over the next several years will be
used to decrease the deficit incurred as a result of start-up. With a 5% increase of sales, the
deficit will be decreased by 20%.
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3.4 Marketing Objectives
1. Be in 30% of the bars and restaurants in the Edmonton area by 2014.
This we be achieved by managing and building the relationships in the bars and restaurants in
Edmonton. The sales team will be responsible for this. It will be measured according to the
number of licensed establishments available in the metropolitan area.
2. Capture 7% market share in the Edmonton area by 2014.
This will be achieved by building brand awareness, product loyalty and relationships with the
distributors. The sales team will be responsible to build up the distribution channels and ensure
that the servers at these places are knowledgeable of Yellowhead.
3. Develop the bottling line to be finished by the spring of 2013.
This will increase the opportunity for the end customer to try Yellowhead. Manufacturing is
responsible for the creation of the bottling line.
4. Increase brand awareness every year by at least 7.5%, starting in 2013.
This will be achieved through communications strategy. This will be implemented personally,
through sales and servers, and general, through advertising. Customer surveys will be used to
measure this.
3.4.1 Societal Objectives
1. Increase awareness of Yellowhead’s music and arts involvement in the community. This
will involve hosting events and bigger artists.
This will be achieved through festival involvement, like the Fringe. The communications team
will be responsible for this.
2. Develop community conscious projects that help to restore or revitalize Edmonton.
Specifically targeted towards historical locations if possible
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This could be achieved through community involvment with a press release to inform the area of
Yellowhead's involvement.
3.5 Target Market Strategy
The target market for Yellowhead Breweries is a male between 18-30 in the Edmonton area
which will everntually expand across the province*. He is environmentally conscious and a local
product supporter. He seeks an experience from his alcohol consumption. He looks for the trendy
establishments with his friends. He goes out several times a week to socialize a try the newest
brew. He is pursuing higher education or already has a diploma or degree from a post-secondary.
He is looking for the next best thing and wants to impress his social circle with his beer
knowledge.
The strategy that Yellowhead will be focusing upon will be on the growing segment of
consumers who are adapting their tastes to microbrews rather than focusing on a mass market of
beer drinkers. This option allows Yellowhead to grow at very gradual, steady rate.
Introducing a platform for culture among key demographics, Yellowhead will help to increase
brand awareness of the brewery. Yellowhead already has a number of resources that competitors
do not currently have, which will help to set them apart. These include there location, history,
and style of beer.
*Please Note: Yellowhead will expand across the province eventaully. Currently, they do not
have the financial means or distribuion network necessary to expand. However, Yellowhead
does plan to expand, starting around the Edmonton area.
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3.6 Messaging
The message will focus on the target market. It will bring together the product qualities as well
as the craftbeer experience. The slogan "A Beer That's Made For Your Taste" will be the focus
of the message. This leverages the belonging, status and quality of Yellowhead. It conveys the
message that will position Yellowhead effectively in the craftbeer market.
3.6.1 Branding
The overall logo, symbol, and packaging does not need to change. It potray the history and
freshness of Yellowhead. It is also identifiable with the current drinkers of Yellowhead lager.
Also, there is no money for a rebreand. Rebands are also risky because they are difficult to
predict and may backfire.
Themes
The themes that Yellowhead will use to target their consumers include the usage of culture, style,
of beer, history.
1.Historically, they will be seen as Edmonton’s true and natural beer. A beer that was originally
made from the North Saskatchewan River when the brewery was originally down in the river
valley, and has now been moved up into Edmonton’s downtown social hub. In other parts of the
world there are towns that create and serve their own particular beer. The beer is a representation
of the place where it was created, and brings much pride to the community to serve their beer to
visitors. Yellowhead’s lager will become Edmonton's beer.
2.The beer that has been created by Yellowhead stays true to the German purity laws. This is
because the brewery and its founders wish to have beer remain true to tradition rather than
commercialization. The beer is to be seen as a fresh alternative to many of the other lagers that
are avliable at bars. This is possible through local and quick service.
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3. Culturally the brewery is one that embodies a culture of Edmonton. Through its history and
trueness to tradition, Yellowhead's brand displays the community. Many breweries try to reach
consumers, but not all of them can do so on a personal basis like microbreweries. There needs to
be a focus on what the Edmonton community needs. Whether it is building up the knowledge that
is exhibited with beer, or if it’s a place for beer lovers to hang out Edmonton's needs should be
reflected in Yellowhead's brewery.
Table: Target Market Messaging
Target Market Messaging
Market Segments Messaging
Male 18+ A beer that's made for your taste
Female 18+ A beer that's made for your taste
Other -
3.7 Strategy Pyramids
The main strategy for Yellowhead is to establish it as a quality beer and increase revenues. They
are already operating in Edmonton and have developed their product. It is essential for them to
increase their brand awareness through horizontal marketing and retailer education. The product
placement is also key for Yellowhead. Relationships with distributors and bottling the beer will
aide the expansion of the brewery. By decreasing the deficit, Yellowhead can realize their
revenue potential.
Strategy Pyramid
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Strategy
Establish Yellowhead as a quality beer in Alberta and increase revenues
Tactic 2
Product Placement
Distribution Channels
Expand network to reach across Alberta, starting around Edmonton
Bottling
Allowing new distribution channels - liquor stores
Tactic 3
Decrease Deficit
Increase Sales
Through distribution channels and server training
Lower Debt Financing
Decreasing debt will eliminate the deficit
Tactic 1
Brand Awareness
Horizontal Marketing
Retailer receives bulk discount in order to feature beer weekly
Server Education
Increases understanding of beer and therefore customer experience
4.0 Marketing Mix
The marketing mix strategies mentioned are being used to grab brand attention and create a
stronger brand image. This is because the industry is already saturated with competition locally
and from international companies. By focusing on their brand image, they can help their target
market realize the benefits and value that is perceived through Yellowhead Premium Lager
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4.1 Product Marketing
Currently, Yellowhead Brewery only sells one beer: Yellowhead Premium Lager. This beverage
is a fresh beer that only contains four essential ingredients and is crafted following German purity
laws (Yellowhead, 2012). The fact that it is made this way is a great benefit to its target market
because most drinkers of craftbeers do not want modified beer recipes and prefer traditional
methods (Kegworks, 2009). Yellowhead Brewery is still in the growth stage of the life cycle and
should continue to focus on this product for the following year.
It is reccomended that Yellowhead Brewery considers producing another flavor or type of beer
to stay competitive with other microbreweries in Edmonton when they have the funds to do so. It
is also recommended that this new product still follows the strict German purity laws to help
create consistency between the product lines.
4.2 Pricing
Yellowhead Brewery uses a penetrating price strategy for its product. This is because the
alcoholic beverage market is saturated with alternatives and substitutions. They are able to keep
their costs low because of the minimal transportation costs. This strategy has allowed
Yellowhead to drive straight into the market with a lower price than most and attract customers
to switch to their to Yellowhead lager. Unfortunately, this may make customers see less value in
Yellowhead lager’s German purity due to the low price. At this point, raising the price to show
that the larger is a premium beer may drive away loyal customers from Yellowhead lager. A
solution to this may be to standardize Yellowhead lager prices to match the competition.
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Table: Price List
Price List
Item Description Per Unit Price
Keg Holds 50 litres of beer. Sold to major establishments $175
Growler Holds 1.89 litres of beer which is equivalent to a six
pack. Refillable. Sold to consumers.
$9
Bear Beer Promotional beer for a radio station. Sold in liquor
stores.
$24
Other Type a description here $0
4.3 Promotion
Yellowhead Brewery could promote their product by utilizing their strong distribution channels.
Using horizontal marketing, Yellowhead brewery can offer some of its retailers Yellowhead
Lager for a discounted price. In return, the retailer would make Yellowhead Premium Lager a
weekly drink special. This could be measured to see how much consumption has gone up in a
year on said featured night and then compare it to see how much the consumption has gone up
on non-featured nights. If consumption has increased for both overall Yellowhead Brewery can
assume that they have create a stronger brand image and implement at other retailers.
4.3.1 Advertising
Yellowhead brewery should focus it marketing budget, like in the past, on posters at events and
around town as well on radio ads on the Bear. The posters are reaching the market segment
already and will help promote bottle released when Yellowhead reaches that point. The radio
advertising should continue to go with the Bear because of the current collabortaion with this
broadcaster.
Yellowhead's new slogan, "A Beer That's Made For Your Taste," will start at the beginning of
the year and be used on any promotional items. Radio advertising will occur in the summer when
beer experiences its highest sales, thus reminding the target market. Posters will be used
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throughout the year in various strategic locations. The sales and communications teams will be
responsible for implementing, developing and monitoring advertising.
Table: Advertising Milestones
Milestones
Advertising Start Date End Date Budget Manager Yellowhead Brewery
A beer that's made for your taste 1/1/2013 1/1/2014 $0 Sales Manager Sales
Radio 1/5/2013 31/10/2013 $2,000 Sales Manager Sales
Posters 1/1/2013 1/1/2014 $1,500 Sales Manager Sales
Other 1/1/2013 15/1/2014 $500 Sales Manager Sales
Total Advertising Budget $4,000
4.3.2 Public Relations
Public relations will be used to increase the brand image and product knowledge of the event
center as a place to hold one of Edmonton’s festivals. Yellowhead could acheive this by offering
the event center to an event such as the Fringe, a yearly theater festival that books venues around
the Edmonton Area. Yellowhead Brewery has a chance to gain free publicity from the local
papers writing reviews about the show.
Yellowhead will participate in the Fringe and promote its local, organic lager. A press release
regarding the Fringe involvement will be timed to be released before, during and after the festival.
The bottling of the beer will be done in March, and a release will be timed to inform the
community about the new way to buy/drink Yellowhead. Any other releases will be sent out
when relevant. The communications and sales team will be responsible for the public relations of
the business.
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Table: PR Milestones
Milestones
PR Start Date End Date Budget Manager Department
Fringe Festival 15/8/2013 30/8/2013 $1,000 Sales Manager Sales
Press release - festival
14/8/2013 30/8/2013 $0
Communication
Team
Communications
Press release - new beer
30/4/2013 30/4/2013 $0
Communication
Team
Communications
Other
1/1/2013 1/1/2014 $500
Communications
Team
Communications
Total PR Budget $1,500
4.3.3 Direct Marketing
Yellowhead Brewery should focus their direct marketing on social media. They currently have a
blog but it has not been kept up to date. This should be revamped and maybe mimic Alley Kat’s
food blog which explains what foods go good with their beer. They should continue to keep their
Facebook page up to date as well posting events and festivals that their target market may be
interested in. These two forms of marketing will make consumers feel less like just a customer
and more like a friend with Yellowhead’s brand. In order to push Yellowhead throughout the
retailers, training will be offered to servers so that they are knowledgeable about Yellowhead.
An incentive program could be created in order to make the server's prerogative to mention
Yellowhead to as many individuals as possible.
Social media and the website will be used throughout the year, starting January 1, 2013, to
market and promote Yellowhead. Server's training will begin in January and be carried out
throughout the entire year. The sales and communications teams will be responsible for
implementation, results and analysis.
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Table: Direct Marketing Milestones
Milestones
Direct Marketing Start Date End Date Budget Manager Department
Twitter
1/1/2013 1/1/2014 $0
Communications
team
Communications
Facebook
1/1/2013 1/1/2014 $0
Communications
team
Communications
Server training 1/1/2013 1/1/2014 $1,000 Sales team Sales
Other 1/1/2013 1/1/2014 $0 Sales team Sales
Total Direct Marketing Budget $1,000
4.4 Service
Customers require high service from the establishments Yellowhead is situated in, the
Yellowhead entertainment space and eventually the liquor stores that carry their bottled beer (as
of May 2013). In order to ensure proper service in the pubs and bars, the serves will be educated
and trained about Yellowhead beer. As mentioned in the Direct Marketing segment, an incentive
program will provide a reason for servers to promote and talk about the beer. The service in the
entertainment space is simple to control because it is located within the brewery. Yellowhead is
responsible for who is hired and they can make sure that the servers are knowledgeable and
friendly. As for the liquor stores, Yellowhead can work with them much the same way as with
the servers. By increasing their understanding of the product, they can better serve the
customers' needs.
5.0 Financials
From the new marketing strategy, sales are expected to grow by 5% each year for the next three
years. This is a conservative estimate and achievable given Yellowhead's quality and distribution
channels. Expenses are also expected to rise about 5%. This was estimated based on inflation.
It is necessary to spend money on the marketing plan in order to realize the brand awareness and
sales increase that have been identified as main objectives. Each dollar spent can be linked to a
specific objective. The contribution and sales forecast have identified the cycle for Yellowhead:
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high sales in the summer and low sales in the winter. It is important for Yellowhead to manage
this.
5.1 Break-even Analysis
For this section, it is assumed that the economy would remain stable. Another assumption was
that the market trends of today would continue to increasse at similar levels. Social trends
pertaining to the consumption of beer would also remain constant.
Table: Fixed Costs
Fixed Costs
Cost
Rent $1,667
Professional Services $58
Payroll $9,808
Insurance $572
Utilities $1,691
Telephone $258
Other $1,525
Total Fixed Costs $15,579
Table: Break-even Analysis
Break-even Analysis
Monthly Units Break-even 161
Monthly Revenue Break-even $27,037
Assumptions:
Average Per-Unit Revenue $167.61
Average Per-Unit Variable Cost $71.03
Estimated Monthly Fixed Cost $15,579
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($20,000)
($15,000)
($10,000)
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
0 60 120 180 240 300
Monthly break-even point
Break-even point = where line intersects with 0
Break-even Analysis
5.2 Sales Forecast
With the current economic factors and the growing brand of Yellowhead, it is possible to achieve
a 5% sales increase in kegs and a 10% increase in growlers over the next year. This is a
conservative estimate that shows relatively stable peaks and valleys over the next three years.
Sales are expected to increase in the summer, as is the industry norm, and to drop over the winter
with a slight increase at new years. Sales performance is directly linked to the relationships with
the licensed Edmonton and area establishments. This is because most of Yellowhead's sales are
from bars, pubs and restaurants. It is important to build these relationships so that the
establishments rebuy and potential customers have the opportunity to taste the beer.
Keg prices are approximately $175. The cost to produce kegs were estimated at $75 each.
Growlers are priced at $9 with an estimated $6 cost to Yellowhead. Bear beer costs $12 and is
priced at approximately $24 per case.
Bear beer is a one year project. Partnered with an area rock radio station, 100.3 The Bear,
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Yellowhead has produced and sold the product under both the Bear and Yellowhead name. It
coincides with the 20th anniversary of the radio station. The Bear beer will be phased out by
May 2013.
Table: Sales Forecast
Sales Forecast
2013 2014 2015
Unit Sales
Keg 2,225 2,336 2,453
Growler 36 40 44
Bear Beer (Per Case) 110 0 0
Total Unit Sales 2,371 2,376 2,497
Unit Prices 2013 2014 2015
Keg $177.28 $177.28 $177.28
Growler $9.00 $9.00 $9.00
Bear Beer (Per Case) $24.00 $0.00 $0.00
Sales
Keg $394,438 $414,159 $434,867
Growler $324 $356 $392
Bear Beer (Per Case) $2,640 $0 $0
Total Sales $397,402 $414,516 $435,259
Direct Unit Costs 2013 2014 2015
Keg $75 $79 $83
Growler $6 $7 $7
Bear Beer (Per Case) $12 $0 $0
Direct Cost of Sales
Keg $166,875 $183,980 $202,838
Growler $216 $261 $316
Bear Beer (Per Case) $1,320 $0 $0
Subtotal Direct Cost of Sales $168,411 $184,241 $203,154
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Keg
Growler
Bear Beer (Per Case)
Sales Monthly
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5.3 Expense Forecast
The entire marketing budget, including advertising, public relations, direct marketing, web and
other, is $9,000. These expenses are not expected to dramatically increase over the next few
years*. An increase of about 5% is expected to reflect inflation. This is a reasonable prediction
but it could change dramatically. Therefore, it is only an estimate and should be expected to
change,even if only a small portion.
Sale expenditures will increase because of the importance of building relationships with the
distributors, like the pubs and bars. A higher quality and longer lasting relationship with a
distributer can be expected to incur higher costs.
Advertising and public relations will also have higher spending. This is because of Yellowhead's
objectives. In order to increase brand awareness and market share, Yellowhead has to
communicate to the target market. The target market can be reached through advertising and
public relations.
There is no direct cost incurred from using social media. However, this is important to create
two-way communication for the customer to build a relationship.
*Please Note: There was no financial information or estimates available for the bottling system
which has been mentioned in various places throughout the report. It is being pursued by the
company, so it has been included in some aspects, like public relations. However, it was not
included in the expense, revenue or sales forecasting although it can be expected to impact these
areas dramatically.
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Table: Marketing Expense Budget
Marketing Expense Budget 2013 2014 2015
Advertising $3,498 $3,673 $3,857
Public Relations $1,000 $1,050 $1,103
Other $2,004 $2,104 $2,209
------------ ------------ ------------
Total Sales and Marketing Expenses $6,502 $6,827 $7,168
Percent of Sales 1.64% 1.65% 1.65%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Advertising
Public Relations
Other
Monthly Expense Budget
5.4 Linking Expenses to Strategy and Tactics
Awareness is at the forefront of Yellowhead's strategy. Through communications from ads, press
releases and server knowledge, Yellowhead can establish themselves as a quality craftbeer that
delivers an exceptional social experience. In order to achieve this, $5,500 of the marketing
budget be used. This sum is managed on a monthly basis, seeing higher spending in the summer
months when beer is the choice alcoholic beverage.
Sales increase through relationships with distributors. This will also help with increase market
share and the amount of bars that Yellowhead is situated in. Approximately $1,000 is allotted
from the marketing plan to achieve this.
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$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Expenses
Sales vs. Expenses Monthly
5.5 Contribution Margin
The contribution and gross margins are directly linked to the seasonal demands experienced in
the alcohol industry. Both are larger when Yellowhead is able to sell more and minimize the cost
per product. This is demonstrated in the summer, when the gross margin grows to a staggering
40% in July. This is reflected in a higher contribution margin of 39%. This cycle is important for
Yellowhead to be aware of as they can work to capitalize on their strength within the summer
and mitigate their risks in the winter.
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Table: Contribution Margin
Contribution Margin
2013 2014 2015
Sales $397,402 $414,516 $435,259
Direct Costs of Goods $168,411 $184,241 $203,154
Costs of Goods $94,100 $95,512 $96,944
------------ ------------ ------------
Cost of Goods Sold $262,511 $279,753 $300,098
Gross Margin $134,891 $134,763 $135,161
Gross Margin % 33.94% 32.51% 31.05%
Marketing Expense Budget 2013 2014 2015
Advertising $3,498 $3,673 $3,857
Public Relations $1,000 $1,050 $1,103
Other $2,004 $2,104 $2,209
------------ ------------ ------------
Total Sales and Marketing Expenses $6,502 $6,827 $7,168
Percent of Sales 1.64% 1.65% 1.65%
Contribution Margin $128,389 $127,936 $127,993
Contribution Margin / Sales 32.31% 30.86% 29.41%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Contribution Margin Monthly
6.0 Controls
Controls are necessary to ensure the success of the marketing strategy. While an idea may seem
valid, until it is put into practise, no one knows how the target market will react. It is important
to monitor their reaction and the implementation plan to make sure that the objectives are
satisfied. The plan will encompass the year 2013 and attempt to increase brand awareness and
sales. However, if this plan does not meet its expectations, a contingency plan has been created.
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6.1 Implementation
In order to reach the financial, marketing and societal objectives outlined in this paper,
Yellowhead Brewery would need to take a number of strategic steps. The objectives are strongly
related and because of this, satisfying one generates a positive outcome for the other. In order for
sales to increase by 5% within the next year, the company needs to increase brand awareness. If
this goal is successfully attained, the deficit will be reduced by 20%.
The implementation plan starts with the company improving their communication with their
partners. The Edmontonian pubs and restaurants should be knowledgeable about the properties
of the beer and the brewing techniques. This will allow them to better seve the customer. A
Yellowhead representative should visit the pubs and restaurants that sell their beer and ensure the
supervisors are aware of the qualities of the beer and will make sure their staff gain that
knowledge as well. Every now and again, the Yellowhead representative could ensure serving
staff is knowledgeable. The same representative should visit other pubs and restaurants to
establish new contracts and expand the supply chain.
In order to help attain some of the societal objectives and increase awareness, the second step
would be for the microbrewery to be present at festivals throughout Edmonton. This would
ensure more people would become aware of their product. Based on this, and assuming revenues
would reach the forecasted amount, the next step would be for the company to host their own
events and also to develop community conscious projects to give back to the community.
Another step would be for the company to add their partners on their website, and every festival
they attend, or events they host as well.
This implementation steps would be made from January 2013 until January 2014.
After each step of the implementation plan, an assessment would be done, to ensure the efficiency
of the marketing strategy. Consumer surveys, along with financial analysis should determine
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whether or not the company should keep enforcing the marketing strategy.
6.2 Keys to Success
One of the most important success factors for this strategy is the representative that would
educate the various restaurants and pubs about the product, and would also try to gain more
partnerships with more establishments. The person should be knowledgeable about the company
and its product, but also very passionate about it. Same attributes should be present in the
individuals that would represent the company at the Fringe Festival.
Price should stay the same, as the revenue increase would be done through brand awareness.
6.3 Market Research
After each step of the implementation plan, a research should be conducted to ensure the
efficiency of the plan. For the communication steps, Yellowhead’s representative should quiz
staff about the different factors of the beer, but also survey customers to see if they were properly
informed about these factors.
As soon as advertising increases, a market research should be implemented to conduct a cost and
benefit analysis. This would help the company realize the importance of advertising, and also it
would help establish if more money should be allocated towards advertising.
After each festival attended, or event hosted, the same cost and benefit analysis should be
conducted in order to establish which one is more efficient and which one is not.
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6.4 Contingency Planning
Some bars or pubs might have contract clauses with other companies that would not allow them
to try and sell Yellowhead’s product. In this case, the company should try and establish new
partnerships with restaurants and pubs that could help the company build brand awareness.
The marketing plan could be efficient, but awareness might take longer than a year to build.
Market research should help analyze which steps are more efficient than others and should help
the company allocate resources better.
7.0 Works Cited
AGLC. (2012). Balancing choice and responsibility. Retreived November 20, 2012, from
http://aglc.ca/
Alley Kat. (2011). Great brews. From scratch. Retreived November 1, 2012, from
http://www.alleykatbeer.com/
Government of Alberta. (2011). 2011 Alberta wage and salary survey overview. Retreived
November 14, 2012, fro http://eae.alberta.ca/documents/wage-and-salary-survey-overview.pdf
Health Canada. (2008). Focus on gender: Canadian's use of alcohol. Retreived November 28,
2012, from http://www.hc-sc.gc.ca/hc-ps/pubs/adapd/cas_gender-etc_sexe/chap3-eng.php
Holloway, A. (2004). Heady times. Canadian Business, 77, 23-23. Retrieved November 15,
2012, from http://libezproxy.nait.ca/login
url=http://search.proquest.com/docview/221351939?accountid=12654
Hughey, R. (2011). Beer distribution in Canada. Retreieved November 14, 2012, from (
http://www.realbeer.com/library/authors/hughe-r/distribution.php).
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Kegworks. (2009). Craft beer drinkers and abstainers. Retrieved November 10, 2012, from
http://www.kegworks.com/blog/2009/11/09/what-your-beer-says-about-you-part-3/
Mcdonald, N. (2009). Small ales, big sales: Craft beer-makers are thriving even as big brewers
struggle. Macleans, 122(48/4), 36.
Statistics Canada. (2010). Control and sale of alcoholic beverages. Retreived November 20,
2012, from http://www.statcan.gc.ca/dailyquotidien/110420/dq110420a-eng.htm
Statistics Canada. (2012). Survey of household spending. Retreived October 25, 2012, from
http://www5.statcan.gc.ca/cansim/a26?
lang=eng&retrLang=eng&id=2030023&tabMode=dataTable&srchLan=-1&p1=-1&p2=9
Yellowhead. (2012). Edmonton's finest brewery. Retreived October 25, 2012 from
http://www.yellowheadbrewery.com/
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Appendix Table: Sales Forecast
Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Unit Sales
Keg 5% 130 140 165 185 205 225 265 240 210 180 130 150
Growler 10% 0 0 2 3 4 5 6 10 6 0 0 0
Bear Beer (Per Case) 0% 40 30 20 10 10 0 0 0 0 0 0 0
Total Unit Sales 170 170 187 198 219 230 271 250 216 180 130 150
Unit Prices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Keg $175.00 $176.25 $177.50 $177.50 $177.50 $177.50 $177.50 $177.50 $177.50 $177.50 $177.50 $177.50
Growler $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00
Bear Beer (Per Case) $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00
Sales
Keg $22,750 $24,675 $29,288 $32,838 $36,388 $39,938 $47,038 $42,600 $37,275 $31,950 $23,075 $26,625
Growler $0 $0 $18 $27 $36 $45 $54 $90 $54 $0 $0 $0
Bear Beer (Per Case) $960 $720 $480 $240 $240 $0 $0 $0 $0 $0 $0 $0
Total Sales $23,710 $25,395 $29,786 $33,105 $36,664 $39,983 $47,092 $42,690 $37,329 $31,950 $23,075 $26,625
Direct Unit Costs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Keg $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75
Growler $6 $6 $6 $6 $6 $6 $6 $6 $6 $6 $6 $6 $6
Bear Beer (Per Case) $12 $12 $12 $12 $12 $12 $12 $12 $12 $12 $12 $12 $12
Direct Cost of Sales
Keg $9,750 $10,500 $12,375 $13,875 $15,375 $16,875 $19,875 $18,000 $15,750 $13,500 $9,750 $11,250
Growler $0 $0 $12 $18 $24 $30 $36 $60 $36 $0 $0 $0
Bear Beer (Per Case) $480 $360 $240 $120 $120 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $10,230 $10,860 $12,627 $14,013 $15,519 $16,905 $19,911 $18,060 $15,786 $13,500 $9,750 $11,250
Appendix
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Appendix Table: Marketing Expense Budget
Marketing Expense Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Advertising $125 $125 $125 $125 $458 $458 $458 $458 $458 $458 $125 $125
Public Relations $0 $0 $0 $0 $0 $0 $0 $1,000 $0 $0 $0 $0
Other $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Sales and Marketing
Expenses
$292 $292 $292 $292 $625 $625 $625 $1,625 $625 $625 $292 $292
Percent of Sales 1.23% 1.15% 0.98% 0.88% 1.70% 1.56% 1.33% 3.81% 1.67% 1.96% 1.27% 1.10%
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47. Academic Version
Appendix Table: Contribution Margin
Contribution Margin
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $23,710 $25,395 $29,786 $33,105 $36,664 $39,983 $47,092 $42,690 $37,329 $31,950 $23,075 $26,625
Direct Costs of Goods $10,230 $10,860 $12,627 $14,013 $15,519 $16,905 $19,911 $18,060 $15,786 $13,500 $9,750 $11,250
Costs of Goods $7,800 $7,600 $7,700 $7,800 $8,000 $8,200 $8,200 $8,000 $7,800 $7,700 $7,700 $7,600
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Cost of Goods Sold $18,030 $18,460 $20,327 $21,813 $23,519 $25,105 $28,111 $26,060 $23,586 $21,200 $17,450 $18,850
Gross Margin $5,680 $6,935 $9,459 $11,292 $13,145 $14,878 $18,981 $16,630 $13,743 $10,750 $5,625 $7,775
Gross Margin % 23.96% 27.31% 31.76% 34.11% 35.85% 37.21% 40.31% 38.96% 36.82% 33.65% 24.38% 29.20%
Marketing Expense Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Advertising $125 $125 $125 $125 $458 $458 $458 $458 $458 $458 $125 $125
Public Relations $0 $0 $0 $0 $0 $0 $0 $1,000 $0 $0 $0 $0
Other $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Sales and Marketing Expenses $292 $292 $292 $292 $625 $625 $625 $1,625 $625 $625 $292 $292
Percent of Sales 1.23% 1.15% 0.98% 0.88% 1.70% 1.56% 1.33% 3.81% 1.67% 1.96% 1.27% 1.10%
Contribution Margin $5,388 $6,643 $9,167 $11,000 $12,520 $14,253 $18,356 $15,005 $13,118 $10,125 $5,333 $7,483
Contribution Margin / Sales 22.72% 26.16% 30.78% 33.23% 34.15% 35.65% 38.98% 35.15% 35.14% 31.69% 23.11% 28.11%
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