Fiji

A. INTRODUCTION

With Fiji Water opening up its distribution system to include New York State, our client Brandon Miller is examining the feasibility of being a distributor for two counties. As consultants, we determined the market research needed to analyze the operation’s viability. The ideal method would be to conduct a break-even analysis, which would require fixed costs, variable costs, wholesale prices, distribution margins and total sale volume in the two counties of Fiji Water bottles. Once this information is available, the break-even volume over two years can be calculated to provide the minimum sales required to make a profitable operation.

In an ideal situation, a customer lifetime value analysis would have aided our decision. For this, one must know the costs for acquiring a retailer for stocking our products (acquisition costs) and the annual profits the retailer generates for the distributor (revenue-variable costs/ distributor margin). The number of years the retailer is loyal to Fiji is also an important factor in conducting the analysis (retention rate). Based on this information a customer lifetime value over the two years can be conducted, to see whether it is worth it to acquire customers in the first place.

B. INFORMATION PURCHASED

Based on our requirements from our proposed strategy of conducting a break even analysis, we decided that market research provided in tables A, B, C, E, F and I would be the most relevant within the budget of $8000. Tables G and H provided customer and retailer survey’s, which would help estimate our market share and potentially volume sales. However, tables A, B and C could provide the same data more accurately and in a more economical manner. The data provided in the chosen tables was more quantitative in nature and would be preferred in such an analysis. Table D did not provide any information that would aid the estimation of volume sales significantly. While tables A and B were not used significantly in...