Situation Overview

A. Situation Overview

The RBS brand has several strengths most notably is that it has a strong brand awareness and loyalty with 85% of US households with income of $25k+ using the product and 70% of consumers choosing the RBS brand over private label brands. According to Exhibit 3, 95% of people surveyed were able to recall the brand name. The brand also enjoys high distribution penetration among grocers with 90%, mass merchandisers with 85% and drug stores with 80% of stores stocking the product. The RBS brand also faces several weaknesses the most notable one being that consumers very little connection with the brand because only 20% of consumer surveyed could recall being exposed to RBS advertising due to the low consumer advertising investments. The brand also from a lack of innovation with its baking soda product having the same formula (unchanged) for over 100 years.

B. Past Promotional Events

MMBC's product sales have declined despite its strong brand due to a number of factors. The biggest risk of these is that consumer preferences/tastes are changing from darker beers toward light beers. These preferences are influenced by a number a factors including the increasing awareness of health concerns caused by alcohol as well as the fact that alternate beverages such as the spirits industry has increased competition. Also, MMBC's limited distribution channels have put them at a competitive disadvantage against major domestic producers who are able to saturate the market and use vast company resources for advertising to increase their sales. MMBC also faces competition from second tier domestic producers who account for 12.5% of beer shipments in the East Central region, import beer companies who controlled about 12% of the market, and craft beer manufacturers who control about 1.5% of the market. MMBC's position as an authentically local or regional beer puts it within the second-tier domestic producers category. Growing consumer preferences will force competitive brewers to extend product lines to appeal to the younger demographic and will need to increase distribution channels in order to achieve economies of scale and retain a profitable margin.

C. Push vs. Pull

MMBC should introduce a light beer. MMBC has several opportunities to assess in the decision to introduce a light beer such as this would allow them to increase and diversify their product offering, appeal and tap into a younger market that will allow the brand to capture this market's loyalty allowing the company to create retention strategies around this market and it could serve as a competitive point to increase its distribution channels. However, there are many risks associated with introducing a light beer including the risk of cannibalizing its flagship product,