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New Belgium Brewing Case Case Study

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Updated: Jul 6th, 2021

New Belgium Brewing (NBB) is a reputable company that complies with business and social ethics in all its operations. Ferrell and Hartline (2011) describe NBB as a company with an effective brand strategy for it focuses on strategic marketing, customer loyalty, customer intimacy, and social responsibility. In this view, this case analysis aims to examine how NBB applies environmental strategies, social responsibility, social needs, social perception, campaigns, word choice, global branding, and social media in marketing and gaining a competitive advantage.

Strategies and Environmental Issues

Since its inception, NBB has struggled to address various environmental issues regarding responsible business practices and maintenance of sustainable production. In addressing these social demands, the company has adopted diverse measures that include creating campaigns to promote responsible consumption of its products for entertainment and recreational purposes. Guzmán and Davis (2017) argue that corporate social responsibility strengthens and aids an organization to satisfy consumer demands. NBB intends to limit the effect of alcoholic beverages on the health condition, family cohesion, and economic status of their customers. In the aspect of environmental conservation, the company has adopted high-tech equipment in every step of their production process to reduce waste disposal, carbon production, and promote efficient maintenance of resources through recycling. Additionally, the company supports local citizens in providing animal feed from the remains of their production materials and sponsorship programs, as part of its contribution to social development. The company strongly supports sustainability to enhance market penetration, competitive advantage, and market share. Portraying itself as a responsible organization is a key success factor in breaking market barriers associated with alcoholic beverages and creating a strong brand.

Social Responsibility and Competitive Advantage

The positive effect of social responsibility on a company’s business position involves effective branding, reputation, and customer loyalty. Social responsibility depicts the company’s interest in promoting social values instead of profit margins. Growing consumer consciousness on the need for environmental conservation is one of the principal factors that shape organizational image (Ladhari & Tchetgna, 2017). Globally, political leaders have expressed concern and participated in developing measures and regulatory policies for environmental conservation. These policies involve responsible production and proper waste disposal to reduce environmental pollution and guarantee a sustainable environment for future generations. Additionally, the company’s participation as part of a scheme towards the improvement of social coexistence significantly influences consumer perception and the use of the company’s products. NBB’s participation in promoting responsible drinking, research and local sponsorship programs, and the provision of free animal feed products from barley to the local community instills a sense of pride to the people and builds a brand bond with the community, resulting in an enhanced competitive advantage in the market.

Aligning Social Needs and Company Growth

Over the years, despite the need to maintain social-oriented business strategies, companies continue to face diverse challenges in aligning the corporate goal with diverse consumer demands. The cost of maintaining these social initiatives is one of the significant challenges. Environmental conservation measures such as cleanup of wastewater discharge and green production technologies require advanced and high-priced equipment. If NBB adopts a fast-growth strategy, the company risks creating ethical lapses such as ignoring the promotion of sustained social development. Since the company’s image revolves around core values of responsible coexistence, which is a key success factor in enhancing profitable business ventures, hasty growth strategies degrade reputation and increase costs of marketing.

Social Perception of Alcoholic Beverages

Since health is a primary concern in every social environment, NBB’s products have harmful effects on humans and the environment. Alcoholic beverages intoxicate human organs, increase expenditure, and create social conflicts. On the other hand, the production processes need a large amount of exploitation of natural resources such as agricultural lands, water, carbon production, and waste disposal. These processes cause pollution and affect the ecosystem. However, NBB has adopted a health-oriented business strategy. The company utilizes responsible business initiatives and production measures that involve the recycling of resources, use of green energy, adoption of high-tech production equipment, and promotion of responsible drinking. On the other hand, the adoption of a green production system reveals the company’s contribution to environmental health conservation measures. This commitment to social health portrays the company as a socially responsible corporation in the otherwise negatively perceived industry.

NBB’s Major Advertising Campaign

NBB has consistently utilized relationship marketing as one of its key advertising tools in reaching and establishing a loyal customer base. Relationship marketing is a research tool that promotes the collection of consumer needs and market concepts that shape the development of new and review of old products (Raggio, Walz, Godbole, & Folse, 2014). Employee first line participation in marketing shows the company’s commitment to social responsibility and concern for the well-being of the consumers. NBB’s adoption of relational strategy positively influenced the company’s market position. The strategy facilitated the establishment of a strong consumer bond by allowing employees to source relevant information from the consumers about the market needs, competitors, and their competitive strengths. The adoption of this marketing strategy in all distribution channels facilitated the delivery of free samples to potential customers in beer festivals and alcohol drinking joints. Moreover, face-to-face communication enabled the company to break down barriers hindering prospective consumers through clarification of product information on verbal and non-verbal communications.

Word Choice in Advertisement

The means of advertising are as important as the message encoded for delivery. The company’s disagreement on the use of the word “folly” genuinely deserved a more detailed discussion on the potential impact on customer perception of the company’s concept of consumers and the entire society. Abolhasani, Oakes, and Oakes (2017) explain that the use of inappropriate words in marketing may elicit negative interpretation, which can easily translate into a conflict between the company and the potential customers. However, since NBB intended to portray itself to the consumers as a friendly social partner, the use of “folly” was essential in breaking customer-organization language and relationship barriers, which allowed for flexible association and informal perception. This approach was significant in building the concept of the company’s values that sought unselfish gains of delivering social development beyond profit gain as the informal language with background music appealed to the target market segment aged 25 to 40 years.

On the contrary, the progress of human relations highly depends on the effectiveness and skills of communication. As words in adverts influence the predispositions of people, the use of inappropriate words evokes anger and generates strong market conflict. Alcoholic beverage companies have a negative social perception of destructive business ventures that affect their market penetration. In product marketing, NBB’s use of the word “folly” was uninformed with the potential to make customers perceive that the company classified them as fools to exploit for business gain.

Achieving Global Branding

Cultural differences are significant in shaping the success or failure of a company in the global market. For NBB’s to succeed in new markets, the company must customize their brand identity in the advertisement inline cultural practices of the target community to create local tastes and preferences of customers. Hudson, Cardenas, Meng, and Thal (2016) hold that involving local communities in identifying factors that influence product consumption is essential in the brand development and creation of product identity. To foster this approach, the company must utilize social media by creating online discussion groups and establishing online brand communities in different regions. Additionally, NBB must understand the local communities’ consumption patterns and cultural beliefs. Since individual culture influences consumer decisions, the company must align its advertisement message with these cultures to create an identification of the value of the consumer to NBB’s business.

Social media Contribution in Product Marketing

Social media has consistently promoted NBB’s communication of its goals as a responsible organization. Since communities and local authorities are sensitive to alcohol consumption, communicating the company’s commitment towards environmental conservation and responsible drinking positively influenced consumer perception. Varkaris and Neuhofer (2017) aver that consumer engagement on an organization’s commitment to social development helps to build trust and promote product identity that is significant in shaping purchase intentions. Social media has been instrumental to NBB’s competitive advantage in communicating its objective to promote social entertainment while preserving the environment and maintaining individual health through responsible drinking. Furthermore, the marketing platform has enabled NBB to explain its steps of adopting responsible production strategies that include going green to the global community.

Conclusion

The case analysis demonstrates that NBB has managed to gain a competitive advantage due to its marketing strategies and ethical business practices. Since competitors have the potential to adopt a social-oriented production and advertisement to counter NBB’s competitive dominance, the company must bolster its future success by developing social communities in the global market. To create this class of consumers, the company must continue to communicate and participate in global activities directed towards the conservation of the environment and social wellbeing.

References

Abolhasani, M., Oakes, S., & Oakes, H. (2017). Music in advertising and consumer identity. Marketing Theory, 17(4), 473-490. Web.

Ferrel, O., & Hartline, M. (2011). Marketing strategy (5th ed.). New York, NY: Cengage Learning.

Guzmán, F., & Davis, D. (2017). The impact of corporate social responsibility on brand equity: Consumer responses to two types of fit. Journal of Product & Brand Management, 26(5), 435-446. Web.

Hudson, S., Cárdenas, D., Meng, F., & Thal, K. (2016). Building a place brand from the bottom up. Journal of Vacation Marketing, 23(4), 365-377. Web.

Ladhari, R., & Tchetgna, N. (2017). Values, socially conscious behavior and consumption emotions as predictors of Canadians’ intent to buy fair trade products. International Journal of Consumer Studies, 41(6), 696-705. Web.

Raggio, R., Walz, A., Godbole, M., & Folse, J. (2014). Gratitude in relationship marketing. European Journal of Marketing, 48(1/2), 2-24. Web.

Varkaris, E., & Neuhofer, B. (2017). The influence of social media on the consumers’ hotel decision journey. Journal of Hospitality and Tourism Technology, 8(1), 101-118. Web.

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