Final Presentation 1-23

MENDING MOLSONChris Alimena, Alexandra Bruno, Irene Hartnett, Stanley Stilwell, Anthony Yu

20%80%

Source: Apex publisher

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Market Share In US Beer

Market

Source: Philip H. Howard, 2011

Source: S&P Net Advantages

20%80%

Source: Apex publisher

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Drinking population: 56.1%

Women

Source: US Census Bureau

One Standard Drink

Preview

Television advertisement

Advertising Agency

Preview

Product Development Benchmark

• 6% alcohol

• 4 years of

development

• Issues with taste and

higher alcohol content

• 9% alcohol

• 2 years of

development

• Use the lessons

learned in

development of

Platinum

Chicago, IL

New Years Eve

http://www.millercoors.com/who-we-

are/locations.aspx

Costs

Category Assumptions Price

Product Development Estimated development costs $1,500,000

Focus GroupsBase Price- $61,000 + 8 Focus groups, with 10 people in each, paid $50 per person $65,000

Production costs $0.27 per bottle x 2,000,000 bottles $540,000

Advertising

Network Television Ad Estimated cost for prime time television $600,000

Print Ads Cosmopolitan full page ad price $289,110

Billboards $600,000

Social Media Facebook, Twitter, etc… $0

AgencyPrice based off of previous product campaign $750,000

Miscellaneous Any unpredicted costs $500,000

Total $4,844,110

Looking back

MENDING MOLSON

Any

Questions?

Breakdown of Revenues

Price Per

Bottle $3.00

Number of

bottles

expected to

be sold in

the first

year

2,000,000

Revenue $6,000,000

These numbers are estimated based on the prices and bottles sold of Molson’s current products

Molson’s sells about 3.7 millions bottles per brand each year

Acsia is an above premium product and will be priced higher than the average beer

Projected profit for Acsia’s First

Year

Profit=revenue-cost

Profit=$6,000,000 - $4,844,110

Profit=$1,155,890

These numbers are based on high estimates

for costs and low estimates for profits

These numbers are for the first year only, as

the brand grows we expect profits to grow as

well and reach the success of Molson’s current

products

Molson’s debt-to-capital ratio

Molson’s debt-to-capital ratio in 2011 was

20.4%

The industry average according to Yahoo

Finance is 52.4%

This means that Molson can issue afford to

issue more debt in order to finance

We choose to issue more debt instead of using

equity because Molson is already lagging

behind ABI in net profits each year by $6.92

billion, so we want to hold onto our profits and

ride on some more debt to finance our plan.

Molson Coors-SAB Miller Joint

Venture

In 2008 Molson Coors and SAB Miller entered

into a joint venture

This created what is now known as Miller

Coors

This applies to the two companies in the

United States only

Average Women Alcohol

Consumption

According to Gallup’s Alcohol Consumption

Measures by Key Demographics show:

64% of women drink alcohol

When drinking alcohol, women choose:

wine 52% of the time

liquor 22% of the time

beer 23% of the time.

These stats are one of the reasons why we

chose this segment to market to. We believe

that Molson has an ample opportunity to offer

its products to the female segment of the

market.

Average Women Alcohol

Consumption by Age

Age Average Number of drinks per week

18-34 years 5.4

35-54 years 3.6

55 and older 3.9

Taxation on Beer in America

• Taxation on beer in America is based on the Alcohol Proof, per gallon within one barrel of a Malt Beverage.

• The average rate of all states tax on beer equals $0.26 per gallon.

• 32 States are above this nationwide average.

• 18 states are below this nationwide average.

• The median rate in the US is $0.185 per gallon of beer.

• With the product Acsia, Molson can focus on the average rate of states tax on beer in the US, therefore, we can presume that the overall cost of tax will not hurt this product on a grand market scale.

Source: Center for Science in the Public Interest

Product Evaluation Process

Implement new product

Analyze data

Conduct product trial

Outline committee process

Determine information required

Identify need for new product, technology, or practice innovation