STACK BREWING: A LITTLE BREWERY IN THE BIG NICKEL Case Solution
The main driver for attracting this segment of the customers in the market is through price and distribution strategies.This segment of the customers should be the new target market of the company and its prices should reflect the needs and perception of this target market after the planned expansion is done. Moreover, if the magnitude for the distribution channels of the company is widely increased, then it would not be difficult for attracting the millennial males to buy the products of Stack Brewing Company.
The competition in Sudbury was also an alarming factor to be considered by Shawn and there were many sources of competition which were weakening the position of Stack Brewing Company in the market. However, if the planned expansion of the company is successful then it would be able to attract it target market and this would also please every palate in the city. Finally, the quantitative analysis has also been performed for the company assuming the success of the planned expansion of the company.
It has been assumed for the purpose of the quantitative analysis that the gross profits realized by the company from its bottled sales would be 50% and from its keg restaurant sales would be 60%. Moreover, based upon the pricing information provided in exhibit 1 of the case for both the bottling types of the company, the average final price per liter of the company’s brands has been computed. This has been used to calculate the increase in the revenues based on the market size of the target market. The appendix shows the increase in the gross profits of the company after the planned expansion of the company and implementation of the recommended course of action.
Evaluation of Alternatives
The brand awareness of Stack Brewing Company was already expanding in the market and growing rapidly and this was also making the expansion of the brewery inevitable. The $ 125,000 of the grant which has been offered by the NOHFC would be utilized to achieve this goal of the company. Shawn had planned to purchase new equipment and it was estimated that this equipment would increase the production capacity of the company by around five times.
As a result, the beer would be readily available for the consumers and it would also increase the availability of the beer for the customers and as a result this would also lead towards intent to purchase. Moreover, there would be an increase in the sales of the company and economies of scale would be created.The range of the alternatives for the company to promote its brand and formulate a new marketing, communications and distribution strategy are as follows:
Alternative 1: Increasing the Magnitude of Communications Strategy
The first alternative for the company is to basically increase the magnitude of the communications strategy of the company. Currently, Shawn used to communicate with the customers of the company through social media and the first campaign of the company had also been launched through social media.
Shawn had also made use of public appearances many times. However, with the increased production capacity of about 500%, the magnitude of the communication of the company with its target market needs to be increased. Now, in order to increase the magnitude of the communications strategy of the company, Shawn needs to create events for its target customers.
This is becoming increasingly important as the firms are seeking to establish their brand name in their country and they are working to be known among their customers. Shawn needs to participate in the quality taste tests and trade shows. This is not only going to increase the awareness for the products of the company however, this would also lead towards the increased sales of the company if a particular brand of the company is chosen as number 1 in the quality contest at the event……………
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