The idea to continue to grow in the already overcrowded market of specialty brewers is critical to the success of this company. There are currently over thirteen hundred micro-brewers in the United States with The Boston Beer Company ranked number one in overall sales and sixth in the overall domestic market. Currently the Heineken and Corona brands rank ahead of Samuel Adams in this category in the world market. In the near future the company is leaning towards owning more breweries and cutting back on the contract brewers.
Currently the different cost associated with contract brewing involves raw materials, excise taxes and deposits for pallets and kegs and specialized equipment required for beer production. Brewery ownership would involve significant capital investment which could easily exceed $50 million for the combination of purchase, expansion and improvement, or for original construction. Threats: In recent years, all brewers have had to contend with a stagnant beer market and per-capita consumption that is on the decline.
The reasoning behind this ongoing trend are attributed to underlying factors such as the low carbohydrate diet rave that has taken off in recent years, the unstable economy, and an increase in market share of wines and spirits. BBC should attack the light beer market. Light beer is the largest selling type of beer on the market, and accounting for five of top ten best-selling beers. As light beer becomes more popular, BBC should listen to customers and follow the trend not to be behind, while others all producing light line of beers to catch more potential customers.
BBC already has their own light beer, so they can save time and money to develop the whole new product. From the taste testing, Lightship receives the highest mark, implying that it has a strong potential to success when they approach in right way. It is more about how they introduce the product to the market, rather than inventing a new product. To survive in the strong competition and grab customers attention, BBC clearly need to differentiate the image of Lightship from other light beers.
Research shows that most of current customers of light beers want different aspects from what Lightship is designed to be. Instead of targeting the same customers with other light beers, Lightship needs to focus on other, untouched customer segment, who seek for full flavor and body with lower calories. As the market tends to trade up to high-end brands, BBCs brand image will help launch Lightship, emphasizing its high quality and authenticity.
To attract first-try customers, the label should be changed to be more vibrant and energetic, stressing the major images that people think of light beers. There is lot more to gain by having light beer segment than to lose by giving up. Each form of research performed gives the specific contribution depending on its characteristics. A taste test is exploratory research to gain ideas and customer insights. It is designed to explore customers perspectives, especially how customers sees Lightship among other competitors in this case.
The result shows how much drinking beer counts for part of their lives and who the potential customers of Lightship are, and the valuable comments about major characteristics of beer that they find in each competing brand. This test tells what value customers seek for the most in light beer segment, giving ideas about how BBC should approach to market. Despite of strong brand recognition of Amstel Light, Lightship is ranked in first place, implying BBC should adopt a new way of advertising to increase the brand awareness.
This test would be better with questions asking what aspects participants think Lightship should have. ZMET provides hidden knowledge with more depth by eliciting customers deepest feelings and emotions about the product. ZMET is a projective method that uncovers the thoughts and feelings associated with the experience of light beers. Even though there are some down sides of drinking beers, people find a lot more positive sides as they see drinking light beer as some kind of rewards, refreshing and energetic activity.
This implies there is enough potential for light beer segment to grow much further. ZMET result also gives direction and guideline to BBC. Conducting ZMET certainly contribute to project underlying attitudes and feelings to help BBC to understand their target customers more deeply. However, because of small sample size, there could be limitation of getting broader perspectives. I would divide the sample by age and beer consumption level to get more clear ideas to attract more focused target intensely and effectively.
Another qualitative research HBS students conduct is retail research, done through interviews, which generates general ideas of current market situation and how competitors are doing. This also gives brief hints of the price points Lightship should target. I would recommend HBS student to divide the sample groups by visiting habits of customers for each type of retailers. If BBC can find out the place where most potential customers of Lightship frequently goes, it would help reduce waste and backlog of the products produced in distribution process.
For example, if customers of sport bar seem to prefer light beer than customers of chic French restaurant do, BBC can save their time and money by focusing on developing improved distribution line with sport bar. The summary collage of ZMET gives valuable ideas that consumers have about their experience with light beers. The most important image associated with light beer is energy and energy giving by offering refreshment. Another image the light beers have is being simple yet great in appearance and in taste.
There is duality of the experience, while they see it as rewards but effects of alcohol makes them self-conscious. Sailing represents both calmness and thirst quenching flavor which is refreshing and cold with structure. There are several images representing group activity. People see drinking light beer as the activity that they do with others, which give them group awareness. They want to be in group but to be different from others by having control. People think that the types of beer they drink tell their social status, providing them with group identity.
The dilemma of light beer is shown through the hula-hoops representing the balance and control. There are tensions between control and need of releasing inhibition, blandness and simplicity, need for self and group identity, being active and being passive. Since light beers seem to be more attractive to energetic young generation and people who do not drink beers regularly and do not enjoy the heavy taste of beer, having more knowledge of their potential customer group helps BBC to target their customers more effectively without wasting effort of targeting wrong customers.
BBC also could have done research about what feature of Lightship people like and dislike. The feature that customers like about Lightship should be kept, and the feature with lower mark given should be altered or discontinued. What BBC can do now is to consider the appropriate way of advertising for Lightship. Research results prove that light beer market is still growing and there is nothing wrong with the quality of Lightship.
It turns out to be the awareness of Lightship is low, implying their advertising methods are not eye-catching. By altering their way of advertising, BBC can gain more trial customers, who can be turned into loyal customers. Lightship also needs to target different customer segment, which looks for full body and flavor beer with lower calories. Rather than fighting directly with strong rivals, BBC should target other customer segments by stressing its unique quality and flavor. It is worth trying launching light beer segment.