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Marty’s Martini Bar: Grey Goose Inventory. Sale Challenge Problem Solution Essay

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Updated: Jun 17th, 2019

Marty’s Martini Bar is currently undergoing a transition whose outcome will greatly affect its performance in a competitive economy. The existing consumer options will determine Marty’s ability to recover from the near crisis. With hard fiscal times, high labor costs and expensive commodities, the supplier needs to strike a balance between needs and wants.

This will aid in prioritization and immensely save the store from the current situation. Marty has to change tactics that involve carrying out a SWOT analysis and reviewing the initial marketing plan he earlier had. Combining the findings with economic, social, and technological solutions will restore the stall’s image and in turn increase sales and enhance the image.

In order to transform the way the bysiness is run, a data mining technique might be incorporated but this situation, however, is not that complex to require the massive attention. The purchasing power of individual clients’ conflict especially considering the difference in income levels, social factors, perception and technological input among multiple other factors.

This paper seeks to analyze the current fiscal position of Marty’s Martini Bar and be able to solve the situation before things get out of hand. Marty’s Bar requires a long-term strategy in order to match with the manufacturers’ monetary position. In essence, their projected sales, profits, and labor costs will help in financial analysis and advisory.

In fulfilling customer requirements, the paper seeks to address issues that most importantly affect Marty’s business and probable ways of solving them. Management is a human function that aims at helping people work with others and through others in order to achieve a common objective. The running of a bar stipulates an organization whose main objective is profit making.

Companies attain stardom through series of efforts that include customer relations management, issue management, procurement, and human resources control. When one of the following functions fail and the entire system is likely to collapse. In Marty’s Bar, not much attention is paid to the workers. Their complaints are not redressed as well.

A good manager always ensures that the employees should be granted the most conducive environment in order to work effectively. Most important of all factors is the legislative issue.

Marty’s Bar should ensure that all due procedures are followed in the processing of the Grey Goose product just to avoid rubbing shoulders the wrong way with the law. Legal matters involve selling of genuine products and reporting the counterfeit, paying taxes in quality time and understanding the constitutional requirements for management procedures.

The employee’s attitude highly affects the customer’s response levels. In order to achieve an elastic demand for the Grey Goose martini, marketing is also important. Good marketing skills attract customers thus getting them interested in the quality of product provided.

In fact, effective marketing is not only aimed at informing a customer of the availability of products, but also aimed at convincing them to consider the us of a particular product. Samsung succeeded in most of its campaigns. The main reason is that they offer their clients quality assurance through adverts and they ultimately transform the perceptions of customers to benefits.

Below are financial analyses of the firm and various speculations of its future assets. Most of the rules set by the entity make it get profits annually in areas that they do not deserve. This is, however, considered to be the only measure through which they can get value for their money and also stay relevant in a competitive market.

The prices of other commodities affect the entry point and growth of the company but worst of all is the performance of the Grey Goose martini. Over the past few years, records of how it trades against other alcoholic drinks have been questioned.

The credibility of the outcome is also suspicious since the profits intended for the next year are not genuinely generated from positive competition but rather increase in its price annually. Communication of financial releases is imperative for analyses of future trends. This is in a bid to avoid the reoccurrence of a similar mistake.

Additional inventory

Sales increase over preceding year

The resultant capital will be as a function of increasing the sales during the previous year by 2%. Secondly, this will be added to the 30% increase in costs and the 12% labor costs of the initial monetary scrutiny. First, the discussion focuses on the previous year then moves to the turnover in 2012. For the last twelve months, the store ordered 88 cases of Grey Goose.

The sum was $13,390.08. Hence, for the subsequent year, they made a capital of 102% of the entire amount. For 2012, this was the amount available for the beginning of the year for the manufacturer $13,657.8816. To get the amount needed for the inventory, the difference between the ordered and the sold Grey Goose will serve the purpose.

For Marty’s 2012 capital turnover, we shall consider the number of bottles for both brands sold and multiply the outcome by individual prices. From January to October 2012, $20,685.18 of the same product was sold. This means that the store needs ($20,685.18-$13,657.8816) which is $ 7027.2984.

Notably, this capital is only generated from the increase in previous sales. The second step involves finding the difference in costing and what impacts does it have.

Costing

Year 2011(price in $) 2012(price in $)
buying selling buying selling
7 oz 10 10.92 16.16 21.008
10 oz 15 15.60 25.36 32.968

As aforementioned, the cost per bottle will increase by 30% with an annual progression. This means that the selling price will be 130% of $ 16.16 and 130% of $ 25.36. The prices are $21.008 and $32.968 accordingly. As from the data provided, 52.4 bottles and 8.7 cases were sold. Since the price indicated represents the cases, the total is achieved by multiplying the two entities.

Hence, $21.008* 8.7 and $32.968*8.7 give the total amount of money gained due to the percentage increase incurred for a customer purchasing the Grey Goose in the year 2012. This results in $(286.8216 + 182.7696) = $469.5912. The final step involves calculating the labor costs Vis avis the income.

Labor percent

This represents the percentage of cash incurred in efforts to sell off the martini at the supplier level. This exercise cannot be measured in physical terms but rather is a thought process and its outcome is determined by the increase in sale of the products. This will be based on the sum of dealer agreements during the previous year with Grey Goose.

Marty’s Bar had an agreement with the product manufacturers concerning bonuses they were to win after two successive years.

The contract came in the form of purchasing certain amount of the Grey Goose and getting in return free bottles. This is the final outcome of the dealer sales as per the financial report $18,477.76 +$19,407.96+ $19,794.24= $57,679.96. A twelve percent increment on this will cause the cost to hike to $ 64601.5552.

To get the sum of the capital required by Marty’s Bar in order to make 2012 and 2013 successful years, the three outcomes will be added.

$ (64601.5552 + 469.5912 + 7027.2984 = 72,098.4448). Initially, when calculating this total sum, we realized that the difference in capital between Marty’s fiscal statement and the producer of the Grey Goose would be the capital required by the former in achieving its mandate for the next year.

As calculated below, this will represent the money required to bridge the financial gap $72,098.4448-$13,657.8816=$58,440.5632.

In finding out the number of bottles to be ordered for the next financial year, it is relevant to divide the capital in question with the number of cases expected. Thus, $58,440.5632 /8.7 will be 6717.3061. This means that the number of bottles required to satisfy customer expectations will be 6718.

Projected dollar 2012 return on grey goose investment

The projected dollar return will be represented by the sum of the three entities discussed earlier. Hence, it will be $58,440.5632 + $24,742.80. This is due to the sum of the current undertaking compliment in the following year. Returns from the previous year must be added to those of the present year in order to know the projection margin.

The sum is therefore, $83,183.3632. This is probably owed to the increase in commodity prices as per the company policy mentioned above. Essentially it is quite easy to increase sales without having to augment the instability already caused by inflation.

New pricing

The martini 10oz shot up to $253.6. This means that the 7oz only remained with $16.16. This comes from the calculation below:

10oz/ 253.6=$ 25.36 for each bottle of a 10oz bottle.

For the total, it becomes 10*25.36 which amounts to $ 253.6. The total cost of the two martinis is $237. This leaves us with the difference of the two values in order to estimate the cost of the 7oz bottles: 237-253.6=16.16.

Additionally, for the better part of 2012, the price for 10oz has been $ 25.36 whilst that for the 7oz has been $ 16.16. However, these prices are bound to change in the next year by a 30% increase in order to cover up for the discount difference.

Projected 2013 sales to cost of good ratio assuming flat sales in 2013

In all probability, 2013 will be a good year for Marty’s store. This is based on the rise of the prices.

Sales

In 2012, the sales were $ 7027.2984. It is explained that in Marty’s business empire, any time a New Year sets in, the sales increase by a 2%. For this year, it will be 102%* $ 7027.2984= $ 7167.844368. Seemingly, the gradual increase in this amount will save the company from getting itself in a crisis.

The projection is merely an assumption of what would happen if Marty was actively involved in the sale of the Grey Goose. The data might help him acquire, retain and attract clients from most areas of the North and even from distant places.

Cost ratio

The costing ratio is as a result of a 30% increase in the initial amount allocated to serve the same purpose. In 2012, the business realized $ 610.46856 as such, the cost will hike by the following margin of $469.5912*130%= $ 610.46856.

The increment in costing will also make Marty return the amount of money occasionally spent to procure the goods. This section of the financial review also indicates where the firm gets its profits annually from.

To get the projection of the year in question, it is imperative to add the two entities in order to generate a genuine figure. The total is $ 610.46856 + $ 7027.2984 =7,637.76696. It is, therefore, regarded as the expected turnover during the next year.

A good look at Marty’s management style indicates that a lot of focus is put on economic gains of the firm. The managment ignores the relevance of human resource and other functions in running the store. Alternatively, the firm fails to recognize customer needs. Recognition of the needs leads to rejection or retention depending on the success of the program due for implementation.

For Marty to experience the desired output in the place of work, it must be realized that all customers are different in their own rights and that their requirements supersede company policies. Besides these, clients are swayed by environmental, cultural, and technological factors.

For Marty, it is necessary to identify the Martini brands that suit various environmental settings, for instance, smooth drinks must accompany calm occasions and times while the reverse occupies rowdy environments. Cultures highly determine the brand success. For instance, it would be impossible to sell the martini in Saudi Arabia owing to the cultural predisposition that prohibits the habit.

Finally, a functional strategy will best suit the desires of Marty coupled with those of the company’s customers. The firm will use democratic measures in increasing costs of the drinks because forceful ventures often result in retaliation from the majority. He should have a proper plan and execute it in a way that it cuts across all management levels.

Management often requires attention of a Chief Executive officer, financial controller, Public Relations manager, Human resource manager and the Procurement officer. With a clearly designated team, Marty will not have to worry about loss in customer base especially on the Northern part of the state since the firm will have an excellent way of acquiring them.

From a wider overview of the problem in question to the financial overheads, it is evident that the company’s image and brand play a huge role in success. Investing in a competitive brand image may seem an inexhaustible task but its outcome secures the company for eternity. A good financial review and future projects are also vital in restructuring an already drawn budget.

Working with a budget helps counter many drawbacks that would destroy a business entity parse. Marty should also take into consideration that competition exists in order to help the company improve the current situation. It should be taken positively and the addressed areas are to be improved in order to avoid mishaps.

For the better part of this discussion, it will be irrelevant not to notice the importance of communication in making effective the management function. Setting up technological advancements to enhance feedback will also aid Marty in achieving his purpose as a manager and a potential entrepreneur.

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