Assignment: Case Study - Hockley Valley Brewing

Requirements:

Students are to form a team of 4 to 6 members for this assignment. In this group assignment, students are to submit a group report (word document 250-300 words minimum including references, diagrams and appendices) that demonstrates their application of the contribution and breakeven analysis in a marketing framework, particularly placement and price components.

Objective:

The main objective of this case study is to explore the application of the contribution and breakeven analysis in a marketing framework of a given business context to help them in their decision making process.

In June 2013, Tom Smellie, company founder and John Miles, shareholder and operations manager of Hockley Valley Brewing Co. Inc. were surprised by Hockley's beer sales at the summer celebration in Orangeville, Ontario, Canada. This festival saw Hockley's lighter beers far outsell its dark and amber ales. Hockley had experience great success in its dark beer and had only recently introduced lighter ales into its product mix. The growing popularity of light beers, as revealed through this festival's sales, gave Miles pause - should he reconsider Hockley's product mix? Should Hockley launch a new light beer? If so, how and where should the brewery promote it?

Required:

a) Evaluate the proposed new product, Hockley Classic. Should Hockley add the product to its line of craft beers and why?

b) Determine the price Hockley Classic should be sold and at this price, state the unit contribution.

c) Evaluate Hockley Classic's sales needed to break even for the Beer Store.