Baileys Irish Cream Case Study
Baileys Irish Cream Case Study The global liquor market has changed immensely in the last 20 years. ... In addition to consumers drinking less, liquor makers, like Baileys, were faced with increasing tariffs and taxes. At the time of this case study, the tax margins between retailer and distributor were fairly close in the US: 15-20% for retailers and 10% for distributors. The United States also imposed a $22 per case import duty, and state excise taxes were as high as 20%. If you were a foreign liquor producer at the time and you sold a case of liquor at a price of $150 to a retailer in the US, you would see $128 after the import duty, which forces liquor makers to greatly increase their prices up to $177. For example, the retailer has $177 case of liquor that he has to pay a 20% Paddington tax, which makes the case cost him $212. ... Now the retailer gets to add his or her profit margin to the case of alcohol, lets pretend that the retail price of the case is $250. In this case, when the consumer finally gets to buy this product he or she has to pay for the $62. ... Basicly a case of liquor that originally costs retailers $150, now costs consumers about $305. ... For Baileys Irish Cream, the problem was not just the US but every country in Europe had similar taxes and tariffs; in the international market it is just something that must be dealt with. ... Five years after Baileys had been introduced to the market, their market share had dropped considerably. ... For Baileys, they needed to have the US flavor of Irish Cream more chocolaty than the flavor of European Irish Cream. It seems that Baileys is focused too much on the magic number of 4,000,000 cases rather than having set a realistic goal based on current industry trends. ... All of the mentioned reasons above point to why Baileys is fighting a loosing battle with increasing sales.