Boston Beer Company case write up

Boston Beer Company case write up

Boston Beer Company founded in 1984, along with many other big league giants have decisions to be made in regards to the direction they wish to take their brand. Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well- developed image uses the same brand name in a different product category. Brand extensions have been used successfully by many corporate giants, such as Arm & Hammer with the starting product being baking soda and extensions such as laundry detergent.

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However, extending the brand isn’t always as lucrative as it may appear. Arizona, an exceptional beverage maker decided to branch off into dips with minimal success. The appeal of strategic growth often can hinder a corporation’s ability to see reality. Now, Boston Beer Company faces the tough decision of once again extending their brand into an existing segments of light beer, “lightship. ” Lightship was introduced in 1987 as the company’s second product when light beers were exploding onto the market place. “lightship” beer exploded and sales shortly followed.

In a taste test done among other giants such as Amstel light, Heineken, and Miller Lite, ninety out of a hundred people preferred the taste of “lightship. ” At only ninety-eight calories, a full-bodied, full flavored, award-winning beer would seem to have infinite success. However, after peaking at around 12,000 cases per month in 1991, the demand in shipments steadily decreased to 3,000 in April of 1998. With a plethora of information on consumer preferences, trends, past & current data, and expert analysis, Boston Beer Company faces some tough decisions with where to take the company.

One important factor to consider is whether or not to designate more marketing resources towards “lightship. ” With that being said, its critical to analyze past as well as future trends to make a well informed decision on designating more marketing resources and finances towards the product. I don’t think dedicating more resources to “lightship” will prove to be more lucrative for the Boston Beer Company in the long run. One concern is that, their flagship product Boston Lager could see a decrease in sales and return.

Their Boston Lager is responsible for 60% of their sales in the market and dedicating more resources towards their lightship product could hurt their flagship product exponentially more than lightship could benefit them. Also, Boston Beer Company has carved a niche in the Sam Adam’s craft beer market where they dominate. Dedicating more marketing resources to a product which is competing with other giants (Amstel light, Miller Light) that own that portion of the market seems foolish.

After all, BBC has significant scale advantages over it’s competitors in the craft market and dominating that segment could prove more lucrative in the long run. Another important question to ask is whether or not BBC should reposition how they market “lightship. ” I do beli…………………..