Golf Bag Cooler: A Case Study

The Story

Working up a sweat to get to a golf course clubhouse is what prompted Dan Knight and Rick Hilton to invent their Golf Bag Cooler. It’s a thin tube that fits inside a golf bag and holds six cans. Convinced that they have designed a winning product, Dan and Rick are considering the next steps to getting their product to market.

The Challenge

But as any inventor soon learns, there are three stages to an invention – dreaming it up, getting the patent, and then finding the market. Knight and Hilton have patents on the Golf Bag Cooler, but they are still trying to identify the target market.

The Solution

Over the past few months, Dan has worked to identify the size of the target market, the number of competitors, the growth cycle for the product, and the likely seasonal variation in sales. He has also set a pricing and promotion strategy.

He takes this information to Thema Group with a request to develop monthly sales forecasts for three years, breakeven analysis, and sensitivity analysis on the impact on the sales forecasts of changes to pricing and promotion strategies.

The Results

The Sales Forecast Report suggests that Dan and Rick should proceed with their Golf Bag Cooler project. The annual sales forecasts for each of the three years is above the breakeven point, although seasonal variation in sales will cause some cash flow issues in the August to December time frame.

The pricing change analysis indicated that reducing the price would increase the sales forecast by 14%, whereas increasing the price would decrease the sales forecast by 27%. Varying the promotion policy had only a small effect on the sales forecasts.