Small business franchise opportunities can prove extremely profitable or cause owners to lose significant amounts of investment income. The following will address the current issues for Coors related to their product, competition, and market share. Industry and economic climate will also be addressed in the context of how they are impacted by cultural and generational issues. Recommendations are addressed, which provide direction and insight into the company’s next steps. It is recommended for Larry to choose a mix of quantitative and qualitative research data in order to evaluate his franchise opportunity in Delaware. By incorporating this data, and establishing interpersonal relationships with wholesalers and retailers, Larry can make an informed determination regarding moving forward with the franchise opportunity.
The central issues of the case study includes determining which research will be most necessary to forecast success in the Delaware market and do determine how to evaluate those measures to make an informed decision. The company’s long standing history is helpful in establishing its stability in the market. And as the fourth largest seller of beer in the country, it is clear that consumers are consistently drawn to the Coors brand. Part of that patronage is related to the company’s social responsibility of caring for and attempting to maintain the environment and its communities by recycling. Company operations are aligned with the philosophies of, “hard work, saving money, devotion to the quality of the product, caring about the environment, and giving people something to believe in” (Nelson & Carson, n.d). Its clear focus on quality also draws in customers and defines the brand as having a reputation for high standards. While the company has some improvements to make regarding perception related to unions and minorities, it has sustained its marketability and value since 1873.
Understanding Coors’ market share estimates would allow Larry to understand how much of the market he should expect to carve out in Delaware. The current information available includes research based on Delaware’s per capita beer consumption, county population estimates, and market share estimates. Larry also has access to the financial and tax summaries of wholesalers that can be used to determine how much his investment and operating costs will be. While this stage one research compiles data, it requires Larry to take the additional step of interpreting the data to determine how it applies to his business. Stage two provides more comprehensive research based on primary data which include consumer and retail studies directly related to Delaware’s beer market. Instead of making a determination between one or the other, Harrison (2013) suggests that employing an applying mixed methods of data research is most appropriate to provide a comprehensive view. Mixing the variety of research will allow Larry to develop and up to date view of the organization related to the industry as a whole as well as its market and competition. As a result, specific opportunities can be identified to address the target market and grow market share.
By comparing market share estimates for the country, then forecasting them to be specific to Delaware, a relative determination of the opportunity for sales can be made. Sustersic and Sustersic (2013) assert that consumer tastes evolve with competition. This suggests that the data collected regarding Delaware’s forecasted market share and competition will not tell the whole story of how Coors can impact consumer tastes and behavior in Delaware. As Coors as yet to infiltrate Delaware markets, any preliminary testing on the effect of competition and consumer response will merely be relative. Despite this, the data will shed light on the preliminary steps that can be taken to allow Larry to make an informed decision.
Many brands in the beer industry have been forced to adjust with increased competition from foreign brands. Increasingly, there is a global competitiveness in the beer industry, causing beer companies to push harder in order not to lose market share from niche foreign brands (Jain, n.d). Knowing and understanding the target market, as well as why consumers purchase certain brands can be extremely helpful in providing direction for marketing and promotional campaigns. Coors’ target market is young men, aged 19 to 34 who have a focus of quality and prefer their beer extremely cold (Chemistry, 2010). As a result, Larry should hope to reach this target by promoting its attention to quality and its ability to maintain freshness and temperature in its manufacturing processes. Recent changes in bottle packaging allow Coors to reestablish itself as a brand focused on quality and temperature, while aligning with the trend of selling beer in cans rather than kegs (Chudgar, 2013). Its new “stay cold” and color changing bottles help to maintain a competitive edge in design while touting its long standing commitment to cold, quality beer. While competitors may focus on strength of the beer or attempt to establish a target market based on price, Coors’ focus on quality and temperature aligns it with the target market in search of premium beer. Coors’ target market gives the company an opportunity to brand themselves as innovative and hip, while maintaining the history of the brand. Instilling cultural trends in marketing and advertising will be helpful in gaining the attention of its young target market.
As a result of the strained wholesaler relationships addressed in the case, Larry will need to develop positive individual personal relationships with the states wholesalers. By taking the extra steps to establish positive working relationships, he can increase communication and address any challenges head on. This is also necessary if Larry is to maintain growth within retail store sales. In addition, although the brand has a significant history and reputation, Larry lacks experience and expertise in running a beer franchise. This will prove to be an obstacle as he attempts to navigate the challenges of the business and maintain operations.
In the next steps for strategic planning and implementation, Larry should purchase a mix of stage one and stage two research data reports. Market share estimates would be helpful in determining the opportunity for sales within Delaware. Additionally, the more in depth consumer and retailer studies will provide additional clarity in to the perspectives of individuals within the entrant market, allowing for a much more acute understanding of how to move forward. Based on the qualitative results of the customer and retail research, Larry will be able to comprehend and address any challenges related to competition and the economy. After this information is collected, the questionnaire data will show what competitors consumers like and how the economic climate influences their purchasing decisions. Understanding these environmental factors from a consumer perspective will allow Larry to directly address them in order to increase market share currently and in the future.
Decisions that need to be made include determining whether now is the right time for Larry to enter the franchise market for Coors, and how to best position himself to be successful. Factors related to these decisions include consumer perspective about the company, wholesaler compliance, and operational consistency. The goal and objective necessary to be successful is to establish a franchise that incorporates the benefits of the brand with the personalization of the individual owner. Maintaining trust and relationships will be essential to maintaining a strong market presence in retail stores.
The strategy for moving ahead is an integrated marketing strategy that addresses the interests of consumers as well as the concerns of wholesalers. By continuing to address its defined target market with direct messaging related to quality and temperature, Larry can develop a significant consumer base in Delaware. In addition, maintaining relationships with manufacturing, wholesale, and retail distributors will provide opportunity for increased visibility.
Chemistry (2010). Alcoholic beverages and long term effectiveness. Coors Light: To the rockies and back. Retrieved from http://adfx.ie/cases/cases10/Coors_Light.pdf
Chudgar, S. (2013). Cans make a comeback for beer marketers large and small. Advertising Age, 84(26), 10.
Harrison, R. L. (2013). Using mixed methods designs in the Journal of Business Research, 1990–2010. Journal of Business Research, 66(11), 2153-2162. doi:10.1016/j.jbusres.2012.01.006
Jain, S. (n.d.) Global competitiveness in the beer industry. Food Marketing Policy Center. Research Report No. 28
Nelson, J., & Karson, E. (n.d.). South Delaware Coors, Inc. Case 3. Boulder, CO: Business Research Division.
Šušteršič, J., & Šušteršič, S. (2013). Do consumer tastes evolve with competition? The case of the Slovenian beer market. Kyklos, 66(2), 306-316. doi:10.1111/kykl.12023