Assignment Requirements
Write a four to five (4-5) page paper in which you:
Revise your executive summary from Assignment 1, based on feedback from your instructor.
Develop a branding strategy for your product that covers the brand name, logo, slogan, and at least one (1) brand extension.
Develop a marketing strategy for your product and determine an appropriate time table for execution of the plan (e.g., phase 1, phase 2, etc.). Provide a rationale for your response.
Develop a positioning statement which should include, at a minimum, a benefit, user, competitive, or innovative statement about your product. Provide a rationale for your time frame for execution of your positioning statement.
Examine the relevant marketing science of customer behavior for your product.
Develop your company’s mission statement and company introduction.
Use at least three (3) academic resources as quantitative marketing research to determine the feasibility of your product / service. These resources should be industry specific and relate to your chosen product / service. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Analyze the marketing framework including the concepts of the 5Cs, STP, and 4Ps.
Examine the marketing science of customer behavior and products in the marketing exchange process and create dynamic strategies for competing.
Evaluate the basis for market segmentation and approaches to segmentation.
Evaluate target customer segments and positioning products within these segments.
Examine the marketing science of customer behavior and products in the marketing exchange process and create dynamic strategies for competing.
Develop branding strategies for existing and new products.
Use technology and information resources to research issues in marketing management.
Write clearly and concisely about marketing management using proper writing mechanics.
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills.
I need to provide you with my assignment 1 that I did so you can work from that to do this assignment on this product. Below is Assignment 1 to work from and use to complete assignment 2:
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Assignment 1: Part A: Your Marketing Plan
Tim Kraft
Marketing Management
Dr. David Holness
8/1/2014
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Assignment 1: Part A: Your Marketing Plan
Executive Summary
T.K. Brewing is a small microbrewery in Charleston, SC that specializes in the production of
organic, ecofriendly craft beers. The company’s key points of differentiation are its green
business practices and the fact that it is the only certified organic craft beer on the market, but
T.K. Brewing has also recently been recognized for taste excellence in numerous beer
competitors in the region. Although T.K. Brewing is already profitable, the goal of the company
within the next twelve months is to capitalize on its current success by expanding to other new
target markets on the East Coast and in the Midwest. This marketing plan will detail the specific
marketing strategies of T.K. Brewing that will facilitate this expansion, and this marketing
analysis will also analyze current environmental factors that affect business operations at T.K.
Brewing.
Step1: Environmental Analysis:
1. T.K. Brewing is a microbrewery that was recently started in 2013 and is looking to expand.
The company currently brews three different types of small batch beer, and the specific offerings
are a Pale Ale, Peanut Butter Porter, and a milk stout. The company currently only offers their
beers in Charleston, SC, but is looking to expand to other areas. The company was started on a
shoe-string budget, and currently all brewing and bottling takes place in the owner’s garage. The
lack of overhead and minimal fixed costs have enabled the company to focus on obtaining the
finest ingredients, and the company has developed a very favorable reputation among health
conscious individuals due to the fact that only organic ingredients are used. Furthermore, the
company’s commitment to environmentally friendly practices that include the use of solar power
and certified organic ingredients has generated a substantial amount of goodwill among
customers. The market for craft beers is growing due to expanding customer tastes and
preferences and a desire for richer tasting beers than those offered by Coors, Miller, and
Budweiser. Furthermore, the cost of brewing equipment has come down substantially in recent
years, and this has further lowered stat-up costs. Due to the reduced price of brewery equipment,
however, there has been an influx of small microbrewers and competition within the craft beer
market is very high. Fortunately, the aforementioned points of differentiation for T.K. Brewing
which include green practices, organic ingredients, and unparalleled taste and quality have
helped to set the company apart from the competition.
Part A: The Marketing Environment
Competitive Forces:
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1. The major competitors as of today for T.K. Brewing include large brands like Coors, Miller,
and Budweiser; but these companies are not really direct competitors since they do not produce
craft beer and instead manufacture mostly watery swill. Direct competitors within the craft beer
market, however, include Rouge, Sierra Nevada, Boston Beer Company, NoDa’s Brewing,
Southern Tier, RJ Rockers, Wicked Weed Brewing, and Willoughby Brewing to name a few.
Craft breweries that will be direct competitors in the Charleston market include Holy City
Brewing and Frothy Beard (DeBenedetti, 2011). The large number of direct competitors stems
from the fact that the craft beer industry is experiencing a renaissance of sorts recently, and in
fact, “there are more than 2,700 craft breweries operating in the U.S., the highest total since the
1880s” (Morris, 2014). The strengths of all these craft breweries are relatively similar: superior
taste to traditional light lagers, high quality ingredients, and regional appeal. The weaknesses of
these competitors are all similar as well, and these weaknesses include limited marketing, small
budgets that constrain growth, lack of a national distribution system, and small economies of
scales. Some of these breweries, however, such as Sierra Nevada and Boston Beer Company,
makers of the Samuel Adams line, have been able to overcome these weaknesses and gain strong
national distribution systems and large scale marketing campaigns. Thus, these two companies
are significant competitors since they combine the strengths of a craft brewer with the financial
power of a larger company like Budweiser.
2. In the future, established firms like Boston Beer Company, Sierra Nevada, and Rouge are
likely to continue to be competitors; and there is also a good chance that some of the more
popular upstart breweries like Southern Tier Wicked Weed will have been able to carve out an
established market niche for themselves.
3. Popular craft beers are almost always quickly emulated by competitors, so we can expect our
competitors to quickly try to emulate successful aspects of our marketing mix.
4. The open structure of the industry significantly enhances the threat of competition in the craft
beer industry.
Economic Forces:
1. The general economic condition of Charleston is strong. Charleston, like the rest of the
country, suffered during the 2008 financial crisis, but the negative consequences were minimal
compared to other regions such as California, Nevada, and Florida. Furthermore, Charleston has
experienced a very strong economic turnaround that has been fueled by a revival in the tourism
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industry, a growing technology industry, and the healthy education sector that is anchored by the
College of Charleston and the Citadel. Due to the economic strength of the city, consumers are
optimistic about the local economy. As for future expansion areas, T.K. Brewing will only target
areas with high levels of consumer spending and strong local economies that can support bars
and brew pubs
2. The buying power of consumers in our target markets is generally high, and typically we try to
target areas with average annual consumer incomes of $45,000 or more. Additionally, when
determining a target market, we also look at factors such as population density, unemployment
levels, crime, and previous levels of economic growth. Thus, we like to ensure that the buying
power of consumers in our target markets is high since premium craft beers are definitely a
luxury item, and we also like to ensure that the strong buying power of consumers will continue
to into the future and is buttressed by strong employment and growth trends.
3. The sales of craft beers are growing in all of our target markets. The growth of the craft beer
industry has been a well-documented national trend, and specifically “Craft beer production was
up 9.6 percent in 2013, while overall beer production fell 1.4 percent” (Morris, 2014). The
growth of the craft beer industry is a result of changing consumer tastes and preferences and an
increased demand for high quality beers. As a result of the increased consumer spending in
target craft beer markets such as Charleston, Boston, and Cleveland; “the number of new
brewery openings has been at near unprecedented levels…We’re seeing breweries open at about a
rate of 1.2 per day” (Morris, 2014).
Political Forces:
1. The craft beer market is significantly influenced by political controls, specifically regulations
that govern acceptable alcohol content limits and the days on which alcohol can be sold. In
recent elections, however, the political landscape has not changed significantly with respect to
the craft beer market and elected officials seem to favor the established system of beer and wine
sales being sold 24 hours a day 7 days a week.
2. In order to maintain good relations with public officials, T.K. Brewing has participated in
numerous community events including Taste of Charleston, and the company also complies with
all federal and state regulations. These activities have been effective in creating some positive
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buzz for the company, and the company also makes a small charitable contribution to our local
councilman’s political fund every year as well.
Legal and Regulatory Forces:
1. There are always proposals to reduce the hours and days when beer and wine can be sold, but
these policies typically fail to gain any traction due to the popularity of beer sales in the state. In
the event that new limits such as no beer or wine sales on Sunday were passed, then sales at T.K.
Brewing would likely decrease.
2. NAFTA will have a greater effect on T.K. Brewing than GATT. Specifically, NAFTA
ensures that T.K. Brewing could easily expand into Canadian markets with minimal issues. The
company could also expand into Mexico as well, but due to the lack of popularity of craft beers
in Mexico and the excessive shipping costs that would be involved, target markets in Canada like
Vancouver and Toronto are more feasible. The GATT agreement has little effect on T.K.
Brewing since our beers are not going to be shipped to foreign global markets anytime soon.
Technological Forces
1. Technology has had a significant impact on our target markets. Specifically, technology has
resulted in the costs of microbrew and nanobrew setups dropping significantly which has
reduced the overall cost of goods sold (COGS) for T.K. Brewing. Additionally technology such
as social media has allowed T.K. Brewing to cheaply market our products to target markets in
Charleston and other East coast and Midwest city locations. Finally, social media interactions
with customers also help T.K. Brewing to stay abreast of changing consumer tastes and
preferences.
2. Improving technologies that relate to the actual brewing process will continue to drive down
manufacturing costs. Currently, T.K. Brewing only offers products in bottles, but eventually,
technological changes will allow us to add canned options as well. As for the way we operate,
technological changes such as a basic ERP system can be used to facilitate corporate expansion
and a larger distribution network.
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3. As previously mentioned, technological changes such as the popularity of social media have
significantly affected marketing activities at T.K. Brewing. Currently, online marketing
campaigns make up the majority of marketing efforts at T.K. Brewing due to the high costs
associated with print, television, and radio ads.
4. No, technological advances do not threaten to make our products obsolete since there will
always be a demand for high quality craft beer. On the other hand, technology has significantly
reduced the barriers to entry in the craft beer market, and this heightened competition could
threaten the long-term success of the company.
Sociocultural Forces
1. Recent changes to society’s demographics and values have significantly affected operations at
T.K. Brewing. Specifically, the heightened demand for high quality and delicious tasting craft
beers has led to increased levels of demand for our products, and the changing societal views on
green business practices and the use of organic ingredients has also lead to very favorable views
of the way T.K. Brewing conducts business.
2. The general attitude of society about the craft beer industry is that it is a welcome alternate to
previous beer offerings. Furthermore, society seems to be more embracing of green business
practices and organic approaches to ingredients.
3. The FDA and any number of consumer or environmental groups could intervene in the
operations of the craft beer industry.
4. Ethical issues that need to be addressed include the morality of manufacturing an alcoholic
product.
Part B: Target Markets
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Identification
1. The demographics of the target market are varied. All target consumers are of course over the
age of 21, but recent industry research indicates that the average craft beer consumer is typically
male, most often between the ages of 27 and 50, and most likely makes more than $75,000 per
year. Additionally research to not identify any specific trends regarding the occupation and
family status of target consumers, but given the high average annual income of craft beer
drinkers, high education levels are also to be expected (Clemons, Gao, & Hitt, 2006).
2. There are no geographic characteristics of that summarize the target market of T.K. Brewing
customers. This lack of geographic characteristics is due to the fact that T.K. Brewing seeks to
expand to all manner of American cities with no regard to geographical boundaries. The only
common geographical characteristics that all target markets for T.K. Brewing possess is that they
all have a relatively high population density and high levels of consumer spending that can
support pubs, bars, and restaurants.
3. The psychological characteristics of the target market include a high degree of environmental
consciousness, a favorable view of healthy lifestyle choices like organic diets, and an
appreciation for high quality ingredients and unparalleled taste. Other lifestyle characteristics
include an interest in the craft beer movement.
4. In a typical setting, the average craft beer customer will consumer anywhere from one to three
T.K. Brewing beers. The benefits sought from our products include delicious taste, strong
alcohol content, and an eco-friendly and health conscious image.
Needs Analysis
1. The needs of our target markets include a desire for high quality craft beer that tastes goods,
utilizes environmentally friendly practices, has only certified organic ingredients, is affordably
priced, and is conveniently located in local restaurants, bars, and stores.
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2. All of our current products at T.K. Brewing meet these needs due to the facts that we only use
high quality certified organic ingredients, our beers are located at convenient locations across
Charleston, we have been recognized for our green and sustainable business practices, and we
continually refine our product offerings to reflect current consumer tastes and preferences. In
order to ensure that we continue to meet the need of customers, we will also solicit frequent
feedback from customers on social media, at bars, and directly through our company website.
3. There are a wide array of competitors that our effectively meeting the taste and quality needs
of customers as evidenced by the popularity of local Charleston brands like Holy City Brewing
and Frothy Beard. Despite the success of these craft brewers, however, there is currently not a
certified organic craft beer that utilizes green practices available to Charleston customers and
other customers throughout America. Therefore, T.K. Brewing has key points of differentiation
that allow it to better meet the needs of customers than our competitors. In the future, the
demand for green and organic craft beers is likely to increase as the importance of environmental
issues is more fully appreciated, so these changes will likely increased the demand for T.K.
Brewing products.
Part C: Current Marketing Objectives and Performance
Review Marketing Objectives
1. Our current marketing objectives are to increase customer awareness of T.K. Brewing in the
Charleston market and select other target markets like Boston, Atlanta, Raleigh, Providence,
Cleveland, and others. Once sufficient regional brand awareness has been created, T.K. Brewing
can begin to focus on more national campaigns, but these national marketing objectives are still a
few years off. These marketing objectives are consistent with recent marketing environment
changes that reflect changing consumer tastes and preferences.
Performance Analysis:
1. Currently, T.K. Brewing is performing well for a small, recently-opened craft brewery. Due to
the fact that we are only currently serving the Charleston market, our annual volume of beer
produced is only approximately 15,000 barrels. Despite the small number of beer batches
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produced, T.K. Brewing has been able to maintain profitability by keeping fixed and variable
costs extremely low.
2. Our current performance is above average compared to other non-established firms in the
industry. An annual production volume of 15,000 barrels is average for a microbrewery, but
larger more established craft breweries like Rogue may produce up to 6 million barrels per year
(Murray & O’neill, 2012). Still, given the newness of T.K. Brewing and the overall high level of
competition in the craft beer market, the fact that T.K. Brewing is already profitable is a
testament to the strong current performance of the company.
3. Our successful performance is definitely partially a result of our highly efficient online
marketing campaigns that align with consumer tastes and preferences. Our target market
frequently utilizes the internet to research new craft beer offerings, so our focus on online
mediums perfectly aligns with the changes in the marketing environment within our target
market(s) (Clemons, Gao & Hitt, 2006).
4. The performance of the industry as a whole is increasing. This fact is evidenced by the growth
of the craft beer market while the beer industry as a whole contracted and the historically high
number of craft beer brewers currently operating within the craft beer industry.
5. To ensure that our performance continues to improve, we need to strategically enter new
markets that align with our product offerings. Online feedback from customers will be an
excellent tool to determine what new markets we should enter, and entry into these new markets
will be key to continuous performance improvement.
Step2: SWOT Analysis:
Strengths:
1. The strengths of T.K. Brewing include unique points of differentiation such as certified
organic craft beers and environmentally friendly business practices. Additional strengths of the
company include a highly competent owner and CEO, Tim Kraft, and a low-cost and highly
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effective online marketing effort. A final strength of the company is the recent awards the
company has received for taste excellence.
2. The operations of T.K. Brewing are dependent on our strengths as points of differentiation that
facilitate consumer appeal.
3. The strengths of the company are a direct result of previously identified customer needs that
T.K. Brewing has attempted to satisfy.
Weaknesses:
1. Weakness of the company include a lack of national distribution system, limited customer
awareness about the company, limited financial resources, and a high degree of susceptibility to
rising raw material costs.
2. Company operations are severely affected by the aforementioned weakness. For example, the
limited financial resources of our company inhibit our ability to create a national marketing
campaign and to rapidly expand into new markets. Due to the aforementioned weaknesses, the
company has to strategically use its limited resources in a highly effective manner with minimal
room for error.
3. Knowledge of our weaknesses ensures that we operate in a frugal manner, and knowledge of
our weakness also reinforces the need for our company to capitalize on current levels of
consumer goodwill in the Charleston market.
Opportunities:
1. The opportunities for T.K. Brewing include the chance to expand to new markets, the
increasing popularity of the organic food and beverage trend, and increasing levels of
environmental awareness among consumers.
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2. These opportunities reflect changing needs and tastes among our target markets- specifically
increased desire for eco-friendly products that are organic.
3. In order to capitalize on these opportunities, the company must continue to offer high-quality
organic products, must continue to utilize green practices, and the company must continually
account for consumer tastes and preferences with respect to our product offerings.
Threats:
1. The threats to T.K. Brewing include changing consumer tastes and preferences, the threat of
competition, and new government regulations.
2. The threat of changing government regulations could severely hurt sales if laws were changed
that limited the days and times craft beer can be sold. The threat of changing consumer tastes
and preferences could result in our products no longer appealing to customers and sales dropping
as a result. The threat of competition is a given in the highly competitive craft beer industry, and
there is always the threat of another firm coming along and offering an organic and eco-friendly
craft beer that eats into our sales.
3. In order to mitigate these threats, T.K. Brewing must constantly evaluate environmental forces
and customer tastes, and then make necessary changes to marketing strategies and the product
mix. Additionally, T.K. Brewing needs to be engaged in constant product development that
reflects the current needs and desires of customers.
Matching Strengths to Opportunities, Converting Weaknesses and Threats:
1. T.K. Brewing needs to leverage its strengths of unique, organic, eco-friendly, and great
tastings craft beers by ensuring that the company capitalizes on the opportunity to expand into
new markets.
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2. The company can convert weakness into strengths by using the risks as catalysts for change
that helps the company to become stronger.
3. Threats can be converted into opportunities by strategically partnering with other craft brewers
so that greater economies of scale and increased access to new markets can be enjoyed.
Step3: Marketing Objectives
Provide and Analyze Objectives:
1. The marketing objectives are to increase levels of brand awareness, to educate consumers on
the brand attributes of T.K. Brewing, and to increase sales.
2. The central goal of the marketing campaign is to increase sales, and this specific outcome can
be measured in terms of sales volume. The sales volume should be analyzed on a monthly basis
to determine whether or not the objective of increased sales is being achieved.
3. The objective of increased sales will need to take advantage of the unique product attributes of
T.K Brewery organic craft beers and the fact that they will be popular in new markets if properly
marketed.
4. The objective of increased sales will help to mitigate the threat of competition and will also
help to establish a loyal customer base that will reduce the threat of swiftly changing consumer
tastes and preferences.
5. The objective of increased sales is consistent with the company’s mission of bringing great
tasting, eco-friendly, organic craft beers to consumers.
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Step4: Marketing Strengths
Target Markets:
1. The target markets for T.K. Brewing are craft beer drinkers in Charleston and craft beer
drinkers in other East Coast and Midwest cities.
2. All of the craft beer markets have similar characteristics that include high levels of consumer
spending, high levels of employment with average salaries in excess of $45,000 per year, high
levels of environmental concern, and appreciation for healthy lifestyles.
3. The Charleston market was selected because T.K. Brewing is located in this city. The
selection of the target market of other pro-craft beer cities on the East Coast and in the Midwest
is logical since the close proximity of these target markets to Charleston will ensure minimal
shipping and distribution costs.
4. As previously mentioned, competitors that already serve these markets include Sierra Nevada,
Rogue, The Boston Beer Company, Frothy Beard, Wicked Weed, and Holy City Brewing.
Marketing Mix
1. The product strategy is to offer beers that specifically cater to known customer tastes and
preferences and capitalize on increasing levels of environmental consciousness among
consumers. Additionally, the product strategy is to offer more beer selections as the company
grows and expands into new markets. Some new product offerings will only be regional in order
to capitalize on regional appeal.
2. The pricing strategy is to price our beers relative to consumers since price is frequently a key
determinant of which beer a consumer will order at a bar or restaurant.
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3. Currently, the distribution strategy consists of the owner making deliveries to local bars and
restaurants in Charleston that have made orders. As the company expands, however, a
warehouse make be procured for inventory storage, and then shipping will likely be
subcontracted out to a competitive carrier.
4. The promotion strategy relies on beer tasting demos at events like concerts and community
functions like Taste of Charleston. Aside from these live demonstrations, extensive online
marketing campaigns that utilize social media will also be employed.
5. The marketing mix presents a competitive advantage because it can be easily customized to
regional tastes and expectations. For example, a new beer offering can be created specifically
for each new target market in order to appeal to customers.
6. The competitive advantages of T.K. Brewing are sustainable as long as the company stays
abreast of consumer tastes and preferences and maintains the current high levels of goodwill
generated by the company’s business practices and overall vision.
References
Clemons, E., Gao, G., & Hitt, L. (2006). When Online Reviews Meet Hyperdifferentiation: A
Study Of The Craft Beer Industry. Journal of Management Information Systems, 23(2),
149-171.
DeBenedetti, C. (2011). The great American ale trail: the craft beer lover’s guide to the best
watering holes in the nation. Philadelphia: Running Press.
Morris, C. (2014, March 2). It’s official: Craft brewers are beating big beer. CNBC. Retrieved
August 4, 2014, from http://www.cnbc.com/id/101435252
Murray, D. W., & O’neill, M. A. (2012). Craft beer: penetrating a niche market. British Food
Journal, 114(7), 899-909.
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