Boston Beer

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Part1The main decision problem for Boston Beer Company is whether or not it should remain in the light beer market. This is followed by four subsidiary decision problems if the answer to main problem is yes: should BBC create a new light beer brand, and if so what positioning should it take, should they keep Lightship, and if yes, should BBC maintain or change Lightship’s positioning. The research problems are as follows: it is profitable for BBC to remain in the light beer market, what are the growth trends, what role does light beer play in the retail scene, what types of people drink light beers, what are their values, is the positioning of Lightship in line with what light beer drinkers seek, and if not it is feasible to change its positioning? The research design is three parts. The first consists of one-on-one qualitative research interviews with retailers to find out more about the retail scene. The interviews are loosely structured with no set questioning frame. The second part is a quantitative blind taste test survey with questions about their brand choices. The third part is a qualitative individual research using ZMET. The HBS team use a survey to pick people whom then use selected images to create a light beer experience collage. Data collection starts off with obtaining information on the light beer market. Using secondary resources the HBS students summarised data on historic growth percentages, future growth prospects with respect to other beers and future consumer trends. Data collection for retailer interviews is simple and loosely structured with the HBO student taking note of typical answers and scenarios. For the taste testing, data is organized in charts by gender and drinking habits with the taste rankings listed behind. The ZMET method collects data by looking for key themes within the pictures and narration.

The sampling plan for the retail interviews are based on national and large regional customers. The exact number is not revealed. There are 46 participants for the taste testing who are all part of the HBS community. The ZMET volunteers are also sampled from the HBS community. 1,700 males and females, ages 25-39 are surveyed for beer brand preferences and drinking habits. Of 400 replies, 12 (7 men and 5 women) are selected based on diversity of preferences and background.

Key findings of the retailer research are the following: customers want branded products with an image, Amstel Light gets more shelf space than Lightship, and Lightship is isolated from the SAM flagship brand. In the taste testing survey, ranking preferences are tallied and averaged. The results show that Lightship is consistently highly ranked across all demographic segments. In the ZMET method, the study team takes the key themes of the volunteers’ collages and summarizes the ideas with their own collage. The analysis revealed the following: customers associate light beer with the colors of red, white and blue to symbolize energy and celebration, it is simple which can be positive or negative, light beer also does not usually cause drunkenness and bloatedness, light beer is thirst-quenching, people want to conform and be different at the same time, and finally, there is a tension between control and the release of inhibitions. Part 2

1.BBC should engage in the light beer market for several reasons. First of all, the light beer market is expected to grow in the coming years. In 1997, the light beer shipment was already 40% of the total beer shipment. While spending resources on the light beer brand may draw energy from the core brand, if the light beer market continues its growth, the light beer brand may grow to rival the volume of Boston Lager. The strong market leads to the next point which is potential revenue. The high end light beer market opportunity could net BBO with total revenue of $24,410,994. This is a significant sum of almost 12% of total sales in 1997. The projected...
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