Marketing Mix - Price

For the ninth part of our marketing final, we were asked to come up with an estimated price plan for our bar.

“The price at which total revenue equals total cost and profit is zero.”(Marketing: An Introduction For Education Management Corporation. Page MN2)

There are a lot of numbers that had to be crunched for the “price” portion of this bar marketing plan. Below you will see some of the costs that I estimate will go into the creation of, Create A’ Cocktail’s.

The Price for the location I plan to take over is $1.9M.

My monthly rent for the location will be $5000

My planed income for Create A’ Cocktail’s is $30,000

It would take 380 months or 31 years to have Create A’ Cocktails paid off in full

The price for my alcohol will be roughly $1000 a month.

I plan on making a 800% profit off each bottle.

When I buy my alcohol in bulk I can get a case of 20 bottles for 20$ a bottle

There are roughly 40 shots in a bottle of alcohol.

Each shot is 10$, or 400$ for a bottle.

I will employee roughly 10 people.

My rates will go from minimum wage (the dishwashers and bussers) to a maximum of 18$/ hour. (The management) Everyone else (the bartenders and waitresses) will be in between, depending on how long they have been with us.

3 employees at minimum wage working 40-hour weeks will be

 $3,840/monthly

5 employees working at “ in between “ wages working 40-hour weeks will be $8,800/monthly

2 management working at “ top “ wages working 40-hour weeks will be $5,760/monthly

Total cost of employees monthly – $18,400

Spending - 5,000 + 1,000 + 18,400 = 24,400/month

Profit - $6,600/month

“In general, a dollar markup is the difference between a company’s selling price for a product and its cost to manufacture or purchase it. For a retailer, then, the markup is the difference between the price it charges consumers and the cost the retailer must pay for the product.”(Marketing: An Introduction For Education Management Corporation. Page MN3)