A successful company is able to create and keep customers. This is through the provision of better value to them than their competitors do. This is what the Boston Beer Company has been doing therefore becoming one of the biggest brewing companies in the United State (Samuel, 1998). In fact, in 1992, Boston Beer Company had increased its sales to 63% making it the biggest specialty brewing company in the US at that time. Boston Beer Company came into being in 1984. It was started by brewer master Jim Koch after leaving his job as a management consultant with his former secretary Rhoda Kallman (Samuel, 1998). During this time the company called itself a microbrewery. However, it worked under contractors who were used in brewing beer.
To ensure that the company thrived despite stiff competition, the management had to constantly assess its customers and ensure that they are in touch with the current product design and services to ensure they offer a competitive advantage. This was done through proper understanding of the environment especially for a company like Boston Beer Company that was new in the market. However, Jim already knew this as he was already a brewer. Therefore, to ensure that the company learned the real market dynamics, the company first was contracted to Pittsburgh Brewing and Stroh in Pennsylvania (Samuel, 1998). This allowed Koch to enter into the market with less cost. In addition, the company had enough equipment for initial brewing, therefore, lowering the cost of market entry significantly. In fact, the company owned legal products and had a brewer master making it be in a good position to enter the market faster. Therefore, the Boston Beer Company was favoured by a number of things made through its marketing plan, therefore, its numerous success.
Description of the product or service, including special features
Products and services are one area where Boston Beer Company is very well-armed. This has made the company a leading company as it offers superior products throughout its time. It has a variety of products that makes it diverse in the market. This enables the customer to choose from these varieties making the company grow very first. The company offers fifteen different beers. Six of these varieties are seasonal, they offer three teas and a hard cider. It offers mainstays that are very popular with the customers. Such varieties as Samuel Adams Boston Larger, Boston Ale among many other varieties are popular with customers making the company preferred all along (Samuel, 1998).
Boston Beer Company through their superior products has acquired a great reputation making their customers prefer them to the rest of their competitor’s products. To ensure that these products remain competitive in the market, Jim ensures that he travels to the nation to meet the distributors, restaurant and stores. This makes him get information from the grassroots making him always improve on the brand making it more preferable. This is what has made the company become more popular in most of the drinking joints all over the country.
The Boston Beer Company has taken an initiative to ensure that they educate people on the importance of quality beer especially to their health and in their day-to-day living (Sambandam, 2008). This is done by making the customers aware of the characteristic, flavour, and ingredients that make their products. Through these education seminars that they hold to uplift the quality of their product, they are capable of learning the best taste of the customer. Therefore, they ensure that they satisfy their customers’ needs by brewing good flavoured beer. Through this, Boston Beer Company has won very many more awards, honours, and tastings than any other American beer company ever (Samuel, 1998). The company has won more than five hundred international awards due to its better beers.
Since the Boston Beer Company began in 1993, it has undergone a lot of innovation to ensure that it comes off age. The quality of their product has been increased significantly from its initial work of research and development (Jack, 1997). This has made the company become the second leading company in 2004 in the specialty category behind its competitors Heineken. The company has put a clear mission to ensure that its products are leading as far as quality is concerned. Their mission states read, “We are committed to making Samuel Adams the largest and most respected high-end beer in the United State in 2010.”
Marketing budget, including the advertising and promotional plan
Boston Beer Company entered the market at a low cost as it had a lot of its equipment intact. The main challenge was to market their products. Initially, the company management took this initiative. In 1985 March, Koch and Kollman visited a local bar with four types of beers. This made them get an order of twenty-five cases. However, that was just but a beginning, the rest was history. After one year, Boston Beer Company was targeting a sale of more than eighty-five thousand cases of beer.
After becoming a fully furnished brewing company, it was able to supply West Coast and this ensured that another branch was opened in Philadelphia that ensured more beer was brewed in the premises (Samuel, 1998). This was a step in making sure that the company embrace the change in the market as it continued to grow.
However, being a big company, they have the marketing power to take the consumers into the next step. Although there has been a lot of competition, this has made the company increase its strategy of marketing the company’s products. Therefore, every product from the company that enters the market is backed up with distribution muscles and marketing that the company is capable of succumbing to ensure that it thrives appropriately in the market. According to Koch, “The Boston Beer Company will continue to market and distribute against all odds to keep the company growing despite stiff competition” (Samuel, 1998).
Through proper marketing strategy where the company gets straight to the customer, most of the beer drinkers have consumed their brand. The company has embarked on training its consumers about the reason for taking quality beer. This has ensured that the company is capable of introducing its brand to people. This has made some of their customers to be dedicated to their brand due to their flavour and alcoholic content.
To ensure that the company has positioned itself competitively in the market, it has crossed its borders and has been doing marketing in other countries. They have ensured that their marketing strategy is followed by a quality beer; thus, becoming one of their main strength in marketing. They are capable of offering a rich flavoured drink that has the ability to maintain their freshness (Jack, 1997). This has kept their competitors at bay.
Another marketing strategy of the Boston Beer Company is to ensure that they comply with all the legal procedures in beer making. This is through patenting most of their product creating a niche in the marketplace amid a lot of competition from other brewers and local brewers who by law have been permitted to brew their product. Their marketing plan and promotion strategy has been accompanied by a lot of research and development to ensure that they always have a brand for their customers.
The distribution of their products is intervened crossly by Jim himself. This ensures that their distributors, restaurant as well as stores keep their loyalty to their products. Jim’s visit to these places is a great strategy of marketing. This has made the company’s products to be in the forefront and leader in the brewing platform.
Moreover, the Boston Beer Company has ensured that their advertising features bottles of Samuel Adams ensuring that they stress the product’s premium ingredients and quality brewing process. To ensure that this advertisement is upgraded, the company ensure that Jim visits different countries including Germany and England to ensure their product that bears the Samuel Adam logo are sold there in bulk (Samuel, 1998).
The company has also increased its sales promotion to complement its advertisement in the market. Boston Beer Company has introduced an advertising campaign offering point of sale marketing in form of table tents, personalized displays as they feature different bar names and beverages offered. They ensure during this process, they offer free T-shirts and hats as a form of marketing strategy.
The company has also ensured that they involve themselves in alliance building where they involve both foreign and domestic brewers to uplift their product in other places. One of the distribution agreements that they have signed is with Nippon Beer Company that is a leading Japanese beer distributor (Jack, 1997). This has made the company remain competitive through their superior products that have been enabled by their advertisement.
Description of the business location, including advantages and disadvantages for marketing
The location of the business has made the company have an upper hand in its marketing and market entry. It is located in Boston in Massachusetts. This is a place where transport, as well as communication infrastructure, are good making the company be in a good position to maintain its competitive edge in the market share. This is through proper communication and distribution of their products. The Boston Beer Company is in addition favoured by its ability to be located in an area where it enjoys better equipment than more microbrewers do. This has made them enjoy a bigger market share in the area.
The company has a lot of advantages in the marketplace. Apart from being one of the biggest companies in the area, it also makes superior products. The quality of their product has made the company win many international awards. Despite many microbreweries emerging every day, the company has still sustained its competitive advantage. The microbreweries in fact cater for only 2.0% of the market share of beer. These, therefore, do not pose a lot of danger in the marketplace.
The Boston Beer Company has also enjoyed a big share in the market with their sales increasing on daily basis. For example, in 1992, the company had a sales of 63% making it the largest in the United States specialty brewer within a span of ten years only (Samuel, 1998). Therefore, the company has this advantage attributed to a specialty that has seen its sales blossom greatly.
The company is highly advantaged by its ability to produce a variety of beers that customers are capable of choosing from. This has made them cover a wide range of customers with different tastes and preferences (Jack, 1997). They have also made sure that they dedicate their business to advertisement and sales promotion. This has made them stand amid stiff completion from other companies.
The Boston Beer Company has an advantage as they have positioned themselves in an alternative method of selling as they have looked into an alternative method of marketing to conquer imported beers. This is by ensuring their drinks are richly flavoured and they have the ability to maintain their freshness for a long time.
The company has the advantage of creating a niche in the marketplace. They have seen an opportunity where most of its large competitors have not taken advantage of it. Most of its competitors have been supplying a light carbonated cold alcoholic drink (Samuel, 1998). Therefore, the company has taken advantage of this by opening brewpubs. Therefore, they were in a position to target the local people who were microbreweries were boosted by a law that was passed to aide homebrewers to make their own beer that is not beyond 200 gallons per year.
However, the company has an upper task to fight against stiff competition that has emerged in the recent past. Some of its main competitors are Heineken, Labatt, Kirin, Molson and Corona. Other domestic competitors include more than five hundred microbrewers among other micropubs who make their own beers (Jack, 1997). Therefore, the company has to use a significant amount of money and go the extra mile in marketing. Therefore, this is one of the demerits that they have to cope up within the current market.
The company is also faced with problems in pricing strategy. This is because most of the bigger companies are capable of using their economic ability to lower the prices of the products. This has decreased the ability of the company to expand amid the competition on the ground.
The pricing strategy of The Boston Beer Company is based on psychological pricing. This is through putting into consideration several points. The first consideration that they have done is positioning. The company ensures that they make high-quality beer and goes further to educate its customer on the importance of taking a quality beer. Therefore, they ensure that they instil a psychological price to their customer that their beer is the best regardless of the higher price than the rest of its competitors. This has made the customer price their products in terms of this notion that they are having high quality.
They have also ensured that they consider popular price points to ensure that they do not overcharge their customers. With very many competitors on board, the company is capable of coming up with a popular pricing point to ensure that they do not deviate much from the prices of other companies and do not make a loss (Jack,1997). Through this pricing strategy, the Boston Beer Company is capable of becoming a very competitive company as far as its marketing plan is concerned.
Boston Beer Company has been involved in research to ensure that they have a proper market segmentation ensuring that they tackle their market appropriately. Through market segmentation, the company is able to identify different groups of purchasers to help them target specific beer for each targeted group.
The company has committed itself to ensure that communication, distribution of products channel of distribution, and prices are standardized to ensure that the entire segments are favoured. The director of the company is able to meet all the distributors in the country to ensure that these segments are well catered for. This helps their needs to be tackled thus ensuring a higher level of market share as the one noted in 1992 where the company enjoyed 62% of the sales (Samuel, 1998).
The company has set aside a group that is used to research from local microbreweries. They ensure that they organise a competition for them where they get to know the preferred taste for their segment (Sambandam, 2008). Through this, they are able to produce a more competitive product. This also helps the company to address the issue of the product, pricing, and service delivery to the customers.
The company uses prior segmentation. This is by putting their market segmentation through pre-existing segments that include demographic criteria such as age, sex and social status (Jack, 1997). This segmentation is very important to the company as it ensures that they are able to balance between flavours, alcoholic content, and price to cater to all the segments.
The company has ensured that they use this method of segmentation as it is simple and requires little amount of money to learn and apply. They are capable of using pre-existing data to ensure that they segment their market.
Though the company has tried in their marketing plan to contain a lot of competition in the marketplace, they have a lot to do to ensure that they are at par with such companies as Heineken. They are still struggling to come off the several allegations that they have been involved in that affect their public figure. Some of them affected their marketing plan directly. An example is an allegation that they were criticised for making a brand with a misleading name in 1990. This was a brand that was called “Cranberry Lambic” that made the company use quite a lot of resources to convince their customers that the brand was not mislabelled (Jack, 1997).
Another criticism that they struggled with is the one that involved sponsoring a radio promotion that was called “Sam for Sex” where one of the radio stations was interdicted. This also blurred their public image hampering their continued marketing plan (Sambandam, 2008). However, the company has done well in ensuring that these criticisms do not pull them down and have emerged strongly to ensure that their public image remains strong.
The company has also ensured that its quality has been consistent (Samuel, 1998). The company has ensured continuous research and development of their products making them pronounce amid a lot of competition. The commitment that the company director has shown is also commendable making the company rise in the daily business arena. Very few directors would work to ensure that they visit all the countries as well as distributors to ensure that all their distributions are well held.
- Jack, E. (1997). Big companies keep a watch eye on craft brewers investors. Investors Business Daily. 1 (2):42-54
- Sambandam, R. (2008). Market segmentation. Web.
- Samuel, A. (1998). The Boston beer company. Company News. 2.(5): 23-25