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Deutsche Brauerei

Deutsche Brauerei is a German brewery entirely owned by family members. In 1998, it expanded into Ukraine due to excess capacity and opportunities for growth. Its marketing strategy in Ukraine involved extending credit to distributors and carrying inventory to develop the fledgling distribution network. For 2001-2002, the financial plan projects continued expansion in Ukraine along with increased dividends, which must be approved along with compensation for the sales manager who led the Ukrainian growth.

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Kashish Parikh
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2K views7 pages

Deutsche Brauerei

Deutsche Brauerei is a German brewery entirely owned by family members. In 1998, it expanded into Ukraine due to excess capacity and opportunities for growth. Its marketing strategy in Ukraine involved extending credit to distributors and carrying inventory to develop the fledgling distribution network. For 2001-2002, the financial plan projects continued expansion in Ukraine along with increased dividends, which must be approved along with compensation for the sales manager who led the Ukrainian growth.

Uploaded by

Kashish Parikh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Deutsche Brauerei

Nirav Haria – 411


Aastha Jain – 412
Natasha Jilla – 413
Veena Nair – 514
Kashish Parikh – 515
Agenda
Company Overview
Expansion to Ukraine
Marketing Strategy
Financial Plan for 2001 and 2002
Case Issue
Financial Plan Approval
Dividend Declaration
Compensation Plan
Deutsche Brauerei (DB)
Entirely owned by 16 uncles, aunts and cousins in the
Schweitzer family
Year 2000:
Sales=€ 92.1 mn, Profits= € 2.9 mn.
Founded in 1737
Produces High Quality Beer
Expansion to Ukraine
In 1998, the company expands to Ukraine because of :

Excess production capacity in Germany


Large Population
Strategic location within central and Eastern europe
Easy entry opportunities
Ukrainian currency ‘Hryvna’ depreciated by around 50%
against DM within 3 months following Russian debt crisis in
1998.
DB overcame the lowering effect by increased volume.

By 2001, Ukrainian consumers accounted for 28% of DB’s


Sales
Marketing Strategy in Ukraine
DB marketed beer in Germany through a network of
independent distributors, who purchased beer from DB and
sold to the retail distribution chain. Marketing in Ukraine
was different.
The Beer-distribution in Ukraine was nonexistent and the
terms applied in Germany couldn’t be beared by the
distributors in Ukraine.
The sales manager extended credits to Ukrainian distributors
and relaxed payment deadlines to 80 days instead of 40
days as applied in Germany
By early 2001 Ukraine accounted for 28% of DB’s sales. DB’s
volume growth over the past 3 years was primarily due to
Ukrainian sales.
Marketing Strategy in Ukraine(cont)
The sales manager also forecasts a 2% bad
debts for 2001 and 2002 and projects to relax
further the payment deadline to 90 days

His marketing strategy also involves carrying in


the compnay’s books a large part of the
distributors’ inventories
Case Issue
The financial plan approval
The actual profitability of the company
The reliance of the company on debt financing
The dividend declaration
The company traditionally aims a 75% dividend
payout to please the retired shareholders
The general manager proposes an increase to 698
000 euros for the 1st quarter of 2001
Compensation plan approval for the sales and
marketing manager
He was paid a base salary of 82 344 and an incentive
payment calculated as 0..5% of annual sales increase
The genral manager is now thinking about increasing
his salary to 48 500 with 0.6% incentive payment

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