Marketing and Management Case Study #2

Factors related to demand include the global supply of the demand ratings from publications and buying characteristics of the consumers

Factors related to the cost of the wine include the price of the grapes planting the grapes , barrels , marketing expenses , operational expenses and additional investments for buying land

Factors related to the profit include the regulation by the government of the distribution systems . Also affecting the profit are the volume of wine production and the type of distribution channel . One other factor is the mandated profit margin set by the state p

Factors related to competition include the increased competition from Australia and New Zealand and the marketing of other wine makers which include the type of bottles used , price level , visual design of the packaging and other factors

The computation for the breakeven

Where x is the number of bottles to break even

28x - 11 .5x -1 ,000 ,000 0

16 .5x 1 ,000 ,000

x 60 ,606 .06061 or 60 ,607 bottles to break even

Stuart Cellars has a volume of 16 ,000 cases which Is equal to 192 ,000 bottles , they have more than enough production to meet the breakeven point . All profits remaining for the 131 ,393 bottles less variable cost will be their net income before tax

The computation for the discount structure

10 Bottles 12

45 Price ) 45

450 80 Discount (100 -Rate ) 70

360 107 .75 Tax (100 Tax Rate ) 107 .75 387 .9 Final Price...