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The Problem Definition and Statement
Charles Bierbrier owns Bierbrier Brewery. Charles formed the company after he attained an MBA degree at Concordia University and after he worked at National Bank of Canada for a period of over six months.
The company performed well from the time it began its operations. Sales grew at a high rate, and no money was spent on promotion of products sold by the company (Simpkins, 2008).
Additionally, the products produced by Bierbrier Brewery became popular among the residents of Montreal. However, as 2008 approaches, the company faces different challenges.
These include determination of the appropriate distribution and promotion strategies. It has to determine the right price to set for its products and the market that it should target.
The goal of this paper is to determine the appropriate expansion, promotion and competitive strategy that Bierbrier Brewery should adopt to enable its growth in years to come.
Bierbrier Brewery has to conduct a SWOT analysis to determine the appropriate promotion strategy. SWOT analysis entails determination of the strengths and weaknesses of a company. Additionally, it involves determination of opportunities and threats that a company faces.
Bierbrier Brewer has numerous strengths. The business has an experienced and educated manager. Charles holds a BA degree in Economics and an MBA. Furthermore, he has worked as a financial advisor and a project officer in Canada (Simpkins, 2008).
These provide him with the expertise required to manage Bierbrier Brewery. Many people in Montreal like the beer that the company sells. This is a strength that the company has.
The product received a positive reception in the market, and this enabled the company to be popular. The local character of keg sold by the company, logo and the involvement of Charles and his colleagues popularized the company.
The popularity of the company also assisted it to improve its credibility. Furthermore, individuals who had tasted the beer produced by the company recommended it to other people.
The invitations that Charles received to attend interviews are also strengths that Bierbrier Brewery has.
One weakness of Bierbrier Brewery is that the ale it produces does not have a more pronounced taste like those produced by other beer producers in Montreal (Simpkins, 2008).
Additionally, the company has few staff members. Finally, the lack of a distribution and promotion strategy is a weakness.
The existence of unexploited market provides an opportunity for the company. Microbreweries and imports share a 10% market share. Bierbrier Brewery is grouped as a microbrewery. It is noted that growth is possible in the microbrewery segment of the market.
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Finally, the threat that Bierbrier Brewery faces is the possibility of competition from other microbreweries in Montreal. These microbreweries have well established brands like Ambroise, La Fin du Monde and Belle Guelle.
The company enjoyed free publicity and promotion. As its credibility grew, word-of-mouth spread, and it managed to get clients. Moreover, wine and food specialty magazines, television stations, newspaper and radio stations featured stories about the company.
The company also operated without a promotion and distribution plan. However, the company managed to grow tremendously. The sales made grew at an increasing rate, and Charles would like to expand the production capacity of Bierbrier Brewery by 100% (Simpkins, 2008).
However, for the company’s production to be increased by 100% and achievement of return on investments to be made, the company has to ensure that sales continue to grow at double-digit rates within a timeframe that is reasonable.
Therefore, Charles has to determine the right pricing, distribution, segmentation and promotion strategy.
Currently, the pricing strategy used by Charles is in line with microbrewery products. The prices that Bierbrier Brewery charges for its products are about 15-20% higher than prices charged by mainstream brands.
Additionally, the prices are 20% less than prices charged on imported brands like Becks and Heineken. However, according to industry projections, production costs are likely to increase in 2008.
Therefore, the alternatives that Charles has are to wait until production costs increase, and then set the prices afterwards. Alternatively, he can decide to set the prices based on competitors’ prices or increase prices now.
The company does not have a distribution strategy. Presently, bars, convenience stores and restaurants distribute the company’s products. However, the company can adopt various options to use in distribution of the products.
It can target all the three forms of retail outlets, or focus on two or one. It can also target sports events, increase the variety of brands or target specific geographical areas (Simpkins, 2008).
Finally, the company does not have a promotion strategy. However, as 2008 approaches, the company can adopt various strategies to promote it and products that it produces. The strategy should enable it to increase sales volume in 2008.
The company can either adopt the use of adverts, publicity creation and use of internet, sales promotion or direct promotion strategies. Alternatively, it can decide not to market and hope that word-of-mouth method continues to popularize the firm.
The firm does not target any market segment currently. It normally accommodates all types of clients. Bierbrier Brewery is a small firm and does not want to restrict its target market.
However, it can decide to target high-end customers, like individuals who frequent restaurants located in the wealthy Westmont neighborhood, or target the general population.
The projections made that production costs may increase in 2008 may not happen. Therefore, if Charles increases the prices now, he may lose many customers in 2008. This would adversely affect the company.
The use of competitors’ prices to set the prices of his products may lead to increased costs or low profits. The competitors may be efficient in their production processes. Thus, they may be able to charge low prices and still make profits.
The operation of Bierbrier Brewery without a distribution strategy is not appropriate. A distribution strategy can assist clients find the products of Bierbrier Brewery easily.
Additionally, a distribution strategy can assist the company to monitor competitors, activities and increase client base.
Furthermore, the lack of a promotion strategy limits the performance of Bierbrier Brewery. A promotion strategy can assist the company to determine clients who like the products that it produces over the products produced by competitors.
Furthermore, a promotion strategy can enable the company to understand the characteristics of the customers who like the products that it produces.
It is advisable for Charles not to increase the prices of the products produced by Bierbrier Brewery now. He should wait until the costs of production increases. Therefore, he should continue with the current pricing strategy.
The distribution strategy that he develops should target all the three forms of retail outlets. The products produced by the company are already popular in the three forms of retail outlets hence there is a possibility of growth.
Finally, he can adopt internet use, sales promotion and use of adverts as the promotion strategies. These strategies are cheaper than direct promotion. Direct promotion may require more staff and this would be expensive.
The use of the recommendations made can assist Bierbrier Brewery to increase sales. The company can complement these strategies with others like targeting sports events and increase of the variety of brands sold. These strategies can enable it to expand in 2008.
Simpkins, H. (2008). Bierbrier-brewery. Retrieved from https://www.vaniercollege.qc.ca/