Drinkworks Home Bar By Keurig - Case Instructions V1 (1)

docx

School

Seneca College *

*We aren’t endorsed by this school

Course

710

Subject

Marketing

Date

Feb 20, 2024

Type

docx

Pages

Uploaded by HighnessBookGoat23

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig REMINDER 1. This is a group case and, as such, it must reflect the work of the entire group. o It must read and be presented as an integrated piece of work. o It MUST not be a “cut and paste” job which simply assembles the individual work of group members. 2. This is a “ major ” assignment and, as such, is worth a significant share of your overall grade in BMK710. Please ensure that the quality of the work reflects the overall importance that this assignment has for your overall performance in the course. 3. A completed “Group Project Peer Assessment” is an integral part of the case submission. Failure to submit a properly and completely filled out peer review will result in a grade of “INC” for the entire group. o Ensure that both the Individual and Group Evaluations are submitted as per the required deadlines. o For clarity, a peer evaluation that rates every member of the team equally is not properly filled out. You are expected to provide an honest critique of the work of yourself and your team members. These instructions are in addition to those provided in the “Case Assignments – Overview & Instructions” document posted on Blackboard. THE MANDATE This case takes place in the summer of 2018 and your analysis, alternatives & recommendations must reflect the situation at that point in time. You are the Senior VP for Brand Marketing for Drinkworks, and your business decision deck must be written from that perspective. You are preparing a deck that will be presented to Nathanial Davis, CEO Drinkworks to get agreement on a number of key strategic decisions on the launch of Drinkworks: Home Bar by Keurig. Your primary focus for this case is to determine the appropriate market (what business are we in?), evaluate the internal and external situation, identify and clearly state “the” problem, make appropriate decisions on segmentation, targeting and positioning, including developing a positioning statement, decide on what type(s) of pods should be launched, and how the device and pods should be BMK710 – DR Page 1 24-Feb-8

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig priced. Your recommendation must solve the problem you identified and be justified by the criteria you will have determined and outlined. As you work on putting your business decision deck together, please note the following: 1. An executive summary is NOT required for this deck 2. While the case brings raises question on which distribution channels should be used to sell Drinkworks that is NOT TO BE DONE for this case. o You can assume that the pods will be sold in all channels that are legally allowed to sell alcohol products including liquor stores, supermarkets & mass merchandisers (where allowed by law) and e- commerce (where allowed by law) 3. No external research is required to complete this case nor is it allowed. 4. A template is provided to assist you with the required metrics calculations. 5. For the financial models, you should assume that the target market is 24 million people as determined below: o 120.5 million households in the U.S. o 59% of households consume alcohol every month o Addressable market is 71 million households (120.5 x 59%) o Use “young and old weekly drinker hosts” as a proxy for the size of the target audiences which is a share of 34% (21% and 13%) from exhibit i This clarification of the case metrics is NOT intended to imply a choice of segmentation base or target audiences. This is provided simply to ensure that all class members are using the same market size base for their calculations. 6. Every decision requires the identification of alternatives, the evaluation of those alternatives using appropriate close-ended criteria, a summary of the analysis for each alternative and a recommendation/decision. Some of these decisions will require a more thorough assessment than others but all of these require some level of evaluation. BMK710 – DR Page 2 24-Feb-8

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig 7. It is very important to note that you should not limit yourself only to options presented in the case study. As well, in the absence of specific information in the case document, you may have to use your “common sense” to come up with relevant and appropriate alternatives for segmentation bases and for then segmenting the market based on that segmentation base. GRADE ALLOCATION – BMK710 Brand Strategy I This assignment represents 25.0% of your final grade for BMK710 – Brand Strategy and will be graded out of 120 marks as outlined below Your group’s grade will be determined on the quality & completeness of your analysis, specification of the correct problem(s), identification & evaluation of alternatives and the resulting recommendation(s) and action plan along with the utilization of appropriate course concepts in solving the case. Your individual mark will reflect the group’s overall mark adjusted for your relative performance on the case as established by the peer review. o 10.0 marks for your market definition analysis (note that this is a decision and requires alternatives, close-ended criteria and a recommendation) o 15.0 marks for providing relevant background & situation analysis, including Drinkworks & their joint venture partners’ objectives and competitive advantages, and a clear, well written problem statement o Remember to also include insights on customers, consumers, competitors, marketing channels (retailers & wholesalers), and context in your situation analysis o 20.0 marks for your segmentation analysis including the alternatives, analysis of those alternatives using relevant and thorough close-ended criteria and overall assessment leading to your recommendations on which segmentation base(s) to use, the segmentation of the market using your chosen base and your selection of target audience(s) BMK710 – DR Page 3 24-Feb-8

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig o Note that you cannot and should not limit yourself to the options presented in the case study for segmentation bases and segments. While a segmentation base and related customer segments are given in the case, you need to go beyond this and determine the right segmentation base (scheme) and then segment the market accordingly. You can, of course, use some or all of the segments given in the case but you will want to ensure that they are consistent with the segmentation base you have chosen and cover almost all of the market as you have defined it. o 20.0 marks for developing your positioning recommendation(s) which will include building effective, properly designed and complete perceptual maps, and then a thorough assessment of the possible position options o A minimum of 3 unique perceptual maps are required for the positioning analysis o Two of the maps must have unique axes (no repetition of the axis used in the maps o The third map can either have unique axes or be a combination of other positioning opportunities o If you decide it makes sense to look at more positioning opportunities or additional combinations of axes, then that should be a fourth or a fifth perceptual map o Remember to ensure that your perceptual maps reflects the relevant competition given how you defined the market o Exhibit 4 (both pages) can provide some good ideas for axis for perceptual maps and/or potential benefits o 20.0 marks for a properly written and compelling positioning statement which includes the identification and assessment of relevant benefits with supporting reasons to believe for your chosen positioning o You must identify and assess a minimum of 3 functional and 3 emotional benefits o These 3 functional and 3 emotional benefits must be derived from and relate to your chosen positioning o A well written positioning statement is a mandatory part of that recommendation. BMK710 – DR Page 4 24-Feb-8

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig o Your positioning statement must outline a compelling position and reason to believe that will cause your chosen target market to purchase the Drinkworks: Home Bar over competitive products. o Please remember that a positioning statement isn’t an advertising “tagline” and must follow the “standard” format for positioning statements taught in BMK710. o 10.0 marks for your recommendation on what types of pods should be launch. o Pods can fall into 3 categories: cocktail pods with alcohol, mixer pods without alcohol, and beer/cider pods o You can recommend that 1, 2 or all 3 types of pods are launched o In addition to your qualitative analysis, your recommendation should include some of the quantitative work you will be doing for the BMK711 portion of this deliverable o If you think it is appropriate, you can make the product decision after selecting your target audience but before determining your positioning, key benefits and positioning statement o 15 marks for your overall recommendation and supporting rationale including your recommendation on whether or not the Drinkworks Home Bar by Keurig should be launched or not. o This deliverable requires you to summarize all of your strategic marketing decisions o You then need to use an appropriate and complete range of close-ended criteria to evaluate the overall Drinkworks Home Bar offering and decide if it should or should not be launched.  There will only be 1 alternative – Should the Drinkworks: Home Bar be launched  You will need to determine the appropriate close-ended criteria to make that decision o 5.0 marks for a 6 Forces analysis of the market (i.e. what business are we in) as you have defined it o What does this analysis enable you to conclude about the attractiveness of the industry and its future profitability and why? BMK710 – DR Page 5 24-Feb-8

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig o The evaluation of this section includes how you incorporate and use your 6 Forces industry analysis into your thinking in the actual deck not just the content you provided in the appendix. o 5.0 marks for your identification of Keurig Drinkwork’s core competencies and determining which of those core competencies are competitive advantages with supporting rationale (VRIO analysis). o The evaluation of this section includes how you incorporate your work on identifying competitive advantages into your thinking in the actual deck not just the content you provided in the appendix. GRADE ALLOCATION – BMK711 Brand Metrics I This assignment also represents 5.0% of your final grade in BMK711 – Brand Metrics I. The assignment will be graded out of 55 marks for BMK711 as follows: Note that a template is provided for the required metrics calculations.  15 marks for your channel margin calculations for the device and the three different pods o Device 1. Calculate channel margins at retail selling prices of $499, $399. $299, $249, $199 and $149 2. The manufacturing cost is $250, retailers will take a 30% gross margin and there is a customer acquisition cost of $100 (your only variable cost for the manufacturer beyond the cost of making the device) o Pods 1. Calculate channel margins at retail selling points of $6.00, $5.00, $4.50, $4.00, $3.00 and $2.00 for the cocktail pods, and $4.00, $3.00, $2.50, $2.00 and $1.00 for the mixer and beer/cider pods 2. Retailers will take a 30% gross margin and wholesalers will take a 22.5% gross margin.  We will assume that the selling marketing channel for the pods has all sales going from Drinkworks to a wholesaler to the retailer to the consumer. BMK710 – DR Page 6 24-Feb-8

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig 3. Cost of goods is $1.20, $0.95 and $1.10 for cocktail pods, mixer pods and beer/cider pods, respectively. 4. There is an excise tax of $0.125 per pod on cocktail and beer/cider pods.  You should assume that Drinkworks pays this excise tax so that for cocktail and beer/cider pods, the price per pod we receive from the wholesaler is reduced by the per pod excise tax. 5. Assuming that the average customer uses 5.5 pods per week over 52 weeks, you can calculate the annual (1 year) dollar gross margin that Drinkworks expects to earn per customer.  15 marks for determining of the annual contribution margin (i.e. gross margin less customer acquisition cost on the device) for cocktail, mixer and beer cider pods o This analysis will be done in 4 steps 1. Determine the number of customers  This is done using the information in Exhibit 5  You multiply the % willing to pay for the device (appliance) by the % willing to pay for each type of pod and then multiply this by the size of your target market (as provided above)  Note that the template has been pre-populated with the % willing to pay numbers 2. Determine the one-time contribution margin from device (appliance) sales for Drinkworks  For this calculation, you take the number of customers as calculated in Step 1 and multiply it by the applicable gross margin net of customer acquisition cost for Drinkworks based on the customer selling price of the device as calculated previously (channel margins) 3. Determine the annual gross margin from the sales of pods  For this calculation, you take the number of customers as calculated in Step 1 and multiply it by the applicable gross BMK710 – DR Page 7 24-Feb-8

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig margin for Drinkworks based on the customer selling price of that type of pod 4. Add the annual gross profit, net of customer acquisition cost, for the device/appliance to the annual gross profit for the pods for each type of pod  15 marks for your recommendation on the price of the device and the price of the pods o You do NOT have to use a criteria table (decision matrix) for this section of the assignment. o If you want, you can provide your recommended pricing for the device and the pods with an explanation of why you selected the prices that you did. o You explanation will need to include qualitative and quantitative support for your decision (and why you didn’t select the other alternatives). o Of course, if you want to use a criteria table, you are free to do so.  10 marks for the presentation of your metrics in your deck and its appendices and how you use those metrics in your business decision deck. All the necessary information for the reader to evaluate your recommendation must be included in your business decision deck and its appendices:  Any excerpts from your spreadsheet included in your presentation must be formatted properly and presented so that it looks like it is an integrated part of your presentation.  The financial information presented in your actual deck (versus what is in the appendices) must be a summarized version of the detailed financial models that are contained in your appendices. Do not waste the reader’s time by putting the exact same information in two places in your deck.  Your spreadsheet must be submitted to the professor at the same time as you submit your powerpoint file. You must also upload a pdf of your business decision deck to SafeAssign by the designated time. BMK710 – DR Page 8 24-Feb-8

BMK710 – Brand Strategy I and BMK711 – Brand Metrics I Drinkworks: Home Bar by Keurig As with all cases in this course, all the information required to solve the case is in the case unless otherwise stated in the specific case instruction document. Searching for information and answers on the internet is not required, nor is it permitted unless specifically required in the case instructions. The business decision deck must be designed to present all the necessary facts and analysis in a logical manner to support your recommendation – it needs to “tell the story” in a concise and clear manner but it must also be thorough and complete. You are free to flow the content in your deck in whatever way best communicates the “story” you want to tell. The allocation of space for each of the required areas is up to you as long as the assignment requirements are appropriately covered.  There is no maximum or minimum length specified for this deck. I would suggest that more than 16 slides, excluding the cover page and appendices, is excessive and less than 9 slides means that you have not covered all the decisions that need to be addressed.  There is a maximum of 5 slides of appendices Detailed submission instructions and requirements, and submission deadlines are outlined in the “Case Assignments – Overview and Instructions” document that has already been posted on blackboard. As a reminder, your overall grade on the case can be adjusted +/- 10% of the total marks available for the case by the professor to reflect the quality and quantity of your participation in our class discussions. The overall quality, flow, consistency & professionalism of your submission must meet an appropriate standard for a business deck in the “real world”. Marks, up to 25% of the total grade for this assignment can be deducted if the following expectations are not met or if too much irrelevant content is included. BMK710 – DR Page 9 24-Feb-8

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Drinkworks Home Bar By Keurig - Case Instructions V1 (1)

Related Documents