Case Study

Colin Hammer, the owner and manager of Hammer Wines, has decided to trial the sale of a new range of Fruit Juices in May, June and July 2015.  Margaret Brand, the Director of Marketing at Hammer Wines, has obtained agreement to conduct the trial from three 7-Eleven and three Woolworths stores in each state of Australia.  The juices to be sold at Woolworth’s outlets are GOJI WHIP, TRIPLE BERRY MIX, ACAI MIX and BLUBANA.  The 7-Eleven retail outlets will trial the sale of PARADISE, SUMMER SET, TROPICAL BANANA, HAVANA and PALM juices.

All of the juices will only be available in small glass containers of 250ml and the recommended retail price will be $4.00 each.  Colin has provided data on the ingredient cost for each drink. He has also indicated that the manufacture and distribution costs for each drinkare15% of therecommended retail price (i.e. 15% of $4.00).

A Mobile App has been developed that will enable retail outlets to dispatch fruit juice orders from their smartphones, and Hammer Wines have assured all outlets that use this app that delivery will occur within 24 hours.The Mobile App logs orders and optimises delivery routes using all available jobs/deliveries and a mapping feature. A simple drag-and-drop feature will enable all customer orders to be tracked by both Hammer Wines and the retail outlets that are participating in the trial. Colin has decided to provide an incentive to the retail outlets to trial the new range of fruit juices using the mobile app ordering system. Instead of selling the juices to Woolworths and 7-Eleven at 65% of the recommended retail price (i.e. $2.60) as he normally does, during the trial Colin will sell them to the Woolworths and 7-Eleven for just 50% of the recommended retail price (i.e. $2.00).

A spreadsheet has been provided for you that contains the sales data by juice type and by state for each of the new juices sold at Woolworths and 7 Eleven, during the 3 month trial period. These figures show the number of drinks sold (not the $ value).Also available in the spreadsheet are data on the recommended retail price, and the various ingredient costs, and the costs associated with making and distributing the various juice drinks.

Colin wants youto analyse the results of the trial for each juice type, so that he can make decisions about which juice types he should continue to produce, and which he might drop from production.

• Briefly present the analysis you have carried out of the data contained in the spreadsheet.
• Identify and discuss the results of your analysis.
• Identify and discuss other factors that may be affecting the results.
• Provide a short concluding summary of the content of the report.

• Finally, include at least two clear recommendations that Colin can adopt. These recommendations must be drawn from the analysis that you have carried out, and must have been discussed in the body of your report.
• • Howdid salesnumbersvary depending on: (1) the type of juice; (2) the retail outlet; and (3) the state?
  • How did the sales numberstrend over the three months of the trial? Did they trend up, down, or remain relatively constant?
  • If, instead of just considering the number of drinks sold, you calculated the profit generated (using the extra data you have been given above and in the spreadsheet, on recommended retail price, the price at which the juices were sold to the retailers, ingredient costs and manufacturing/distribution costs), would your conclusions change in any way?
  • What other factors may be affecting the results of this 3 month trial?

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