Boston Beer Company: Light Beer Decision

Group-3 (Ravi Ranjan, Sandeep Kumar A, Tarun Kumar, Rohan Yadav, B Srinivas Naik)

Q1: Should Boston Beer attack the light beer market? If yes, why and how? If no, why?

In light beer market, the category holds about 38% of the share currently (1997 in US, according
to Exhibit 1), which is the largest share of beer in the market and it has shown a positive increasing
trend. From the BBC’s point of view, they have a very good hold on their sales and distribution,
also they have a very distinguished brand presence but it needs to further bolster its brand image
in the market.

BBC needs to exploit the brand differentiation present and its products should resemble very
well and resonate with the brand image. With more craft beers in the market the taste and brand
has begun to personify with the consumer of the beer. Each brand and each product has different
appeal to its consumer, this is a significant shift in the beer preference and brand preference among
the consumers.

Moreover, to suppress the competition that has been booming up in the US market, strong
brand differentiation along with new product lines might discourage competition and work in favor
of BBC.

Figure on the left

Threat from
new shows the
entrants: Porter’s 5 forces
Low
for Samuel
Adams.
Internal
Buyer Supplier Competition talks
Power: Internal power:
LOW competition Moderate about the pressure
(Differentia : High (Foreign on the industry to
tion) players)
include and
provide the
customers with
Threat of “better beer” is
substitutes: immensely high.
High
(Switching
Cost)
Q2: What were some of the strengths and gaps in the Field Study?

Field study taken across is kind of consumer survey data which is detailed analysis for consumers
and questioning their preference for two kinds of beers only i.e., Light or Regular. When given a
choice it is probable that a consumer might show a preference to one beer but might not turn
customer for that particular beer.

Also, not a lot insights are generated on consumer profiling, for e.g., if they like a particular
kind of beer what’s the reason for that, what kind of biases might the consumers have which may
affect the whole study overall. Detailed analysis should have been gone to understand the pulse of
the customer, market and the organization. If the study makes a survey the results are tend to have
much more bias and this needs to be taken care of.