Case Study #3

MHA Strategy to enter the Quebec Market Case Study #3Mosaic Marketing Corporation Manpreet Berar, Briana Cowan, Sarah Henderson, Susan Keely, Parker McMullin and Raminique Sahota. Instructor: Anne Marie Webb-Hughes, Marketing 1102SET 1F NOVEMBER 19th 2009Table Of Contents TOC
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Table Of Contents PAGEREF _Toc120169670 2Introduction and Problem Statement3Key Findings and Assumptions for Research4Target Market Analysis6Competitive Analysis7ALTERNATIVE 1 – INTENSIVE DISTRIBUTION PAGEREF _Toc120169675 8ADVANTAGES PAGEREF _Toc120169676 8DISADVANTAGES PAGEREF _Toc120169677 8ALTERNATIVE 2 – EXCLUSIVE DISTRIBUTION PAGEREF _Toc120169678 9ADVANTAGES PAGEREF _Toc120169679 9DISADVANTAGES PAGEREF _Toc120169680 9ALTERNATIVE 3 – SELECTIVE DISTRIBUTION PAGEREF _Toc120169681 10ADVANTAGES: PAGEREF _Toc120169682 10DISADVANTAGES: PAGEREF _Toc120169683 11SOLUTION PAGEREF _Toc120169684 11IMPLEMENTATION PLAN PAGEREF _Toc120169685 12COURSE CONCEPTS PAGEREF _Toc120169686 13APPENDIX PAGEREF _Toc120169687 14“L’elan dans la ville” Advertising Campaign PAGEREF _Toc120169688 14Bottle and Logo Change PAGEREF _Toc120169689 14
L’elan dans la ville…avec toi” Promotional Activity PAGEREF _Toc120169690 15REFERENCES PAGEREF _Toc120169691 16 INTRODUCTION AND PROBLEM STATEMENT Widely respected as one of Canada’s best, Moosehead beer has been incredibly successful throughout Canada, distributing to the majority of the provinces in the country. However, the one province where Moosehead has struggled to effectively penetrate the beer market is in Quebec. This east central Canadian province is the second most populous province after Ontario, and is the only Canadian province whose population is mainly francophone. We feel that the cause of this marketing challenge is due to fact that the Moosehead Company has not productively advertised their product, together with the French-Canadian culture, values and beliefs, to their francophone target market. Having a population with over seven million residents, and consuming approximately 5.3 million hectolitres of beer each year, Quebec is the second largest beer consumption market in Canada. Being recognized as a “distinct society” by Prime Minister Jean Chrétien, the French Canadians of Quebec take great pride in their French language, culture and sophistication. The residents of Quebec are known to be imaginative, fashionable and conscious about their health. In this particular province, cultural identity is strong, and many French Canadians voice their outlook of Quebec culture being more distinguished than that of English-Canada. A marketing strategy that will enable Moosehead to successfully penetrate the Quebec beer market is to incorporate the specific French Canadian cultural vales and characteristics while advertising to this particular province. Also, taking into account that they have become accepted as a distinct society in Canada will also build interest with the francophone residents of Quebec. Given that the company already has the product, deciding the accurate pricing for the product, where to place it for it to be sold, how to promote it and what distribution channel to use are crucial evaluations that need to be made. What is the most effective distribution strategy that Moosehead Beer Company can do to penetrate and obtain market share in the province of Quebec? And how can Moosehead reposition their company to relate to the culture and community of Quebec citizens? KEY FINDINGS AND ASSUMPTIONS FROM RESEARCH ,[object Object]

Quebec, densely populated with over 7 million residents, has the second largest beer consumption market in Canada with an estimated 5.3 million hectolitres of beer consumption a year.

¾ purchased from independent retailers and chains (grocery stores, convenience store, some at Société des alcools du Québec).

¼ purchased in bars, restaurant, special events, licensed establishments.

As Quebec and New Brunswick are neighbouring provinces, distribution costs would be significantly lower than shipping to other provinces. However, higher interprovincial trade barriers contrast this.

The beer market is the second biggest market in Montreal.

Moosehead entered the market in the year 2003 with difficulties in the success.

Most beer products are purchased at convenience stores called “depaneurs” and not at stores SAQ (Societe d’Alcool a Quebec).

Based on statisitcs, bottled beer is the highest ranking over draught and canned.

There are over 2000 convenience stores by the name of Couche Tard and thousands of bars/lounges. There are over 600 nightclubs in Quebec alone.

Moosehead brews it’s beer at their brewery in Saint Johns, New Brunswick, and has a small share of the McAuslan brewery located in Montreal, Quebec.

Moosehead’s total revenue in 2009 was approximately $190 million dollars, greatly increasing since 2003, which brought in an estimated $130 million.

Moosehead carries a line of various different beers ranging from light and lime flavoured.

SWOT Analysis GraphENVIRONMENTPOSITIVENEGATIVEINTERNALSTRENGTHS:Offered in 50 states, all throughout Canada, and in 14 other countriesOffer’s a large product depth. Such as Moosehead: light, pale ale, premium dry, dry ice, alpine lager, alpine light, Clancy’s amber ale, and cold filtered lightOne of the oldest breweries in Canada – 127 yearsCompany has high brand awarenessBottles are highly recyclable – 17 timesWEAKNESSES:Website is not directed to the demographics of Quebec (their culture and image).Product is marketed and perceived as “too Canadian.”The brand image is sought out to be known as generic (green bottle, labeling, name)Moosehead has already penetrated into the Quebec beer market. However as marketers we must promote it to create brand awareness. The Quebec consumers at this point are unsure of the quality of MooseheadLack of experience in the Quebec market since Moosehead has penetrated the Quebec market in 2003 has led to low sales EXTERNALOPPORTUNITIES: Quebec’s population is 24% of the Canadian population. Quebec has the higher consumer spending rates per capita. This means that Quebec represents an important marketThe current market of Quebec is booming and room for Moosehead product to capture market share is availableProduct mix can be expanded one initial success is create and brand loyalty becomes apparentQuebec’s beer industry is the second largest market in CanadaIntroduce Moosehead light a low carb beer, which targets the health conscientious beer drinkers.75% approx of purchased beer is at home drinking, we must consider this in our distribution strategyTHREATS:Competitors such as Labatt Blue already have an established clientele in QuebecMoosehead does not carry a large capital for huge advertising campaignsCompetitors are more experiences in the Quebec beer industryThere are many Government regulations in the Quebec that are associated with the alcohol industry. Such as font and languageCulture barrier between the Anglophone Canadians and the francophone Canadians.TARGET MARKET ANALYSIS The Moosehead brand already has some brand awareness in Quebec, however, they not attaining high volume sales. We feel this is occurring due to the fact that the company is not targeting specific demographics based on the particular geographic area of Quebec. This therefore causes Moosehead to lose sales revenue to companies such as Labatt and Molson, which are dominating the beer market. French Canadians are known to be creative, trendy, health conscious and sophisticated and we feel that Moosehead should keep these precise cultural characteristics in mind when marketing to the French residents of Quebec. With the new target market segmentation, we feel that Moosehead needs to target their beer product to adult men and women, “à la mode” students and career-oriented individuals, ages eighteen to thirty-five. This product will satisfy each consumer’s psychographic needs, by raising the level of sophisticated brand image and allowing them to be associated with a product that is unique and distinguished, just as the French Canadians see themselves as a culture. Since the distribution of alcohol in Quebec is through many independent retail chains and retailers, we choose to use selective distribution through select depanneurs such as Couche Tard, night clubs, bars and lounges to attract our target market. With a newly sophisticated Moosehead beer bottle, we believe that the younger generations will do their best to feel more mature buy purchasing this product, and that the older generations will be willing to pay a little more for a high quality product to relive their formative years. The French are always looking for something different in taste, unique and sophisticated, and we feel that once they experience Moosehead beer, they will gain a familiarity of what differentiates a quality product from a standard one. COMPETITIVE ANALYSIS The alcohol beverage industry is a highly competitive market. With revenues for the Canadian beer market generating 10.9 billion dollars in 2008 representing a compound annual growth rate of 1.7% for the period spanning 2004-2008. This has indicated to Mosaic Marketing Corp. that the beer market is extremely profitable; however within this market there are already competitors that have already dominated the Quebec market. Labatt Blue and Molson Canadian both share 90% of the market share in Quebec. With these two major Canadian breweries monopolizing the beer market in Quebec, there are also the smaller breweries that are in competition with Moosehead as well. These small beer brands include Brasseur Du Nord and Brasserie McAuslan Brewery. An advantage that Moosehead has over these smaller breweries is, Moosehead has the largest market share for the smaller breweries in the rest of the Canadian sector. Through our research Moosehead beer has already penetrated the Quebec market in 2003, however sales in Quebec for Moosehead beer are low. Molson and Labatt Blue have marketed their company to meet the needs and demographics of the Quebec market by promoting and advertising their beer’s quality, image, and uniqueness; however Moosehead has not been successful with this. Another advantage that Moosehead has over it competitors is Moosehead will have an image of a premium lager. We believe this quality is directed specifically towards the Quebec individuals and gives a huge advantage over the two dominating competitors, which we will utilize to our advantage. Three alternatives have thus been devised in the distribution of the Moosehead product. ALTERNATIVES ALTERNATIVE 1 – INTENSIVE DISTRIBUTION Another way for Moosehead to enter the Quebec market is to distribute to as many independent retailers as possible in order to saturate the market. This includes all bars, restaurants and nightclubs as well as all types of retailers such as depanneurs and grocery stores. In order to distribute intensively, Moosehead would need to convince retailers to carry its products. Thus, a pull strategy would be employed to generate consumer attention. Moosehead will advertise heavily through radio and billboards to promote awareness and encourage consumers to go to their local convenience store or neighborhood bar and ask for the product. ADVANTAGES ,[object Object]

Due to the fact that there will be more exposure of the product, Moosehead will have a greater opportunity for brand awareness, being available in numerous depanneurs.

By having Moosehead be more available to the public, we could charge a lower price (for example, a price of $12. 99/ 12 pack), allowing the product to become for affordable for its consumers. DISADVANTAGES ,[object Object]

Overexposure of the brand could cause consumers to perceive Moosehead as a generic brand which is less valuable and less interesting than more illusive brands.

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