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Transcription of this question: 3.Brandon Canoes (BC)Brandon Canoes (BC) manufactures and sells canoes in the Pacific Northwest Of North America,where canoeing and fishing are popular hobbies. Founded in 1951 by Brandon Tyler, BC isa private limited company owned and operated by members Of the Tyler family. There is strongbrand awareness Of BC in the regional canoeing and fishing community.Primary market research conducted by BC showed that some people wanted smaller canoes that couldbe easily transported. BCS factory has sufflcient space to expand its product range to include smallercanoes. BC can easily manufacture 1000 smaller canoes per year in addition to current production.BC’s current Chief Executive Officer (CEO), Ashton Tyler, calculated that the costs associated withthese smaller canoes would be:• fixed costs: $300 OOO• variable costs per unit: S 1900• sales price: $2400.Ashton thought that the smaller canoes would appeal to two new market segments:• young people (in their 20s) who wish to exercise in an environmentally friendly way• Older people (in their 50s and 60s) who want forms Of exercise less physically demanding thanrunning or team sports like football (soccer).The Marketing Director, however, warned that the target markets for the smaller canoes are probablynot aware Of the BC brand. He added that marketing costs would be higher than Ashton anticipated.It would also take time to generate sales Of the new smaller canoes. Also, because Of the economicrecession, some customers were taking longer to pay. Because Of the potential marketing issuesand the slower payments, BC needs to plan for additional working capital. BC’s shareholders are,however, not convinced. They view the smaller canoes as a largely new product for a new market.They would rather pursue extension strategies to the existing product range.(a)(b)(c)(d)(e)Identify two ways in which the market for canoes may be segmented.Calculate the break-even quantity for the smaller canoes (show all your working).Explain how the “marketing issues and the slower payments” would create aneed for additional working capital.Apply the Ansoff matrix growth strategies to BC_Discuss Ashton’s proposal to start manufacturing and selling smaller canoes.[2 marks/[2 marks/[4 marks/[5 marks][7 marks]

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