Michelob Light: The Refreshing Classic

presented by Meg Cinimera, Teddy Palm, Alyssia Pessolano, and Rachael Travers

Table of Contents

Background .................................................... 1SWOT Analysis ............................................... 2 Competitor Analysis ....................................... 3The Refreshing Classic ................................... 4Sales Force Promotion .................................... 5Distributor Promotion ................................... 6Consumer Promotion .................................... 8Budget .............................................................. 9About Seniority ............................................... 11Sources .............................................................. 13

1

BackgroundThe Michelob brand was established in 1896 and is owned by Anheuser-Busch, America’s largest beer manufacturer. Michelob’s product line includes an Original Lager, Amber Bock, Honey Lager, Michelob Light, and a Seasonal beer. Another branch of Michelob, Michelob Ultra, is almost a brand unto itself, with its own microsite and marketing efforts. Michelob Ultra appears to be targeting active people, especially women, who are looking for a light, fruity beer. By contrast, regular Michelob targets a mix of consumers, focusing on simple ingredients and brewing methods.

With 4.3% alcohol and 113 calories, Michelob Light is an average light beer. It doesn’t quite fit into the low-carb category as Michelob Ultra does, but it’s definitely not a heavy beer. Michelob Light is very similar to Keystone Light and Natural Light, placing it in the inexpensive, watery, party-beer category.

Reviews of Michelob Light on Beeradvocate.com do not bode well for the brand, with most comments referencing the beer’s tastelessness. One reviewer even went so far as to say, “Water doesn’t begin to describe it.” Others termed it as “unmemorable,” “dad’s beer,” or “free beer,” saying it is perfect for “pounding beers like a madman.” However, the few that did appreciate Michelob Light made statements such as: “refreshing on a hot day,” “nothing crafty, just plain old thirst-quenching stuff,” and “tastier than Bud Light.” One man even called it his favorite beer, but said it was hard to find. With so little demand for the beer (only about 1% of the population drinks Michelob) it makes sense that few stores would be carrying this product. Reviews of Michelob Original Lager provided additional insights into consumer perceptions of the brand as a whole. One reviewer called it “casual and unpretentious.” A second stated: “While this beer’s heyday has come and gone, it would likely hit the spot on a hot day (or night).” However, less kind reviewers made statements such as: “Michelob just doesn’t deliver,” and “There is nothing of much to note, aside from the ideas that in the line of generic American [beers], Coors is more refreshing and Budweiser has a stronger flavor profile.” This last statement formed part of an interesting pattern: those who liked Michelob beers tended to dislike Budweiser and Coors, and vice versa.

According to a Simmons OneView report, typical Michelob drinkers are older, white males living in the southern region of the United States. 37.7% of Michelob drinkers live in the South, 63.2% of Michelob drinkers are male, and 32.5% of Michelob drinkers are between the ages of 45 and 54. However, this last data cannot truly be used, as the report indicates that the sample size for this population was too small to make any sweeping conclusions.

SWOT Analysis

Strengths

- recognizable - established brand

- in a strong family of beers

Opportunities

- seasonal branding for summer- appeals to users that prefer simple beers

- trend towards lower-calorie beers

Weaknesses

- low market share (1.62%)- terrible brand image

Threats

- strong competition (Bud Light)- Michelob Ultra is more popular

- trend towards craft beers

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Competitor AnalysisWith sales of over $5.99 billion in 2012, Bud Light is a true classic, appealing to men and women of all ages and tastes. However, its skunky, strong taste does not appeal to some, and it tends to be perceived as the quintessential redneck beer. As of 2011, Bud Light has a 19% market share. Although studies show that beer’s market share in general has dwindled over the past decade or so, Bud Light’s market share remains fairly constant, losing only 0.7%. The overarching Budweiser brand also has a strong presence in the media, boasting some of the most popular and memorable advertising campaigns in the United States. It is also the offical sponsor of the NFL.

Coors Light, the “World’s Most Refreshing Beer,” promises cold refreshment and emphasizes this with its use of “Silver Bullet” branding efforts, such as nifty “cold-sensing” bottle labels and cans that keep beer cold longer. Coors appeals to a younger demographic, and seems to be very trendy. The brand’s website is sleek and visually appealing and involves itself with social media trends as well. For a summer promotion, Coors Light came out with a limited edition can design, which is being cross-promoted with a Twitter campaign: #livesummer. Coors Light, or its parent company, Molson Coors, is also the official sponsor of the NHL, as of the 2011-2012 season. While Bud Light’s market share has been decreasing, Coors Light’s market share has been growing. As of 2011, Coors Light has about an 8.7% market share, and had sales of $2.29 billion in 2012. Keystone Light, brewed by Coors since 1989, is a more watery version of Coors Light, and tends to be perceived as a party beer. It’s similar to Michelob Light in the sense that it is a refreshing, but overall poor beer, and isn’t a particularly salient brand in its category. In terms of promotional efforts, Keystone is the official sponsor of WWE, and announced in February of 2014 that it is renewing its sponsorship of FLW Bass Fishing as well. Similar to Michelob Light, Keystone Light appeals to men who drink below-premium beers and live casually.

Natural Light, more affectionately known as “Natty Light,” has been brewed by Anheuser-Busch since 1977. Targeted at younger demographics, especially men, the brand’s personality is cool and often humorous, with promotional efforts focusing on the idea that Natty Light drinkers “keep it real.” Natural Light gained awareness in 2011 via YouTube, when two Natty fans launched a Natty Light can into space, but that was about exciting as the brand has managed to get over the past forty years. Natural Light has a 4% market share, as of 2011.

The Refreshing Classic

A combination of the qualitative and quantitative data helped us to conclude that Michelob Light drinkers are looking for a simple, refreshing, and inexpensive beer. They’re not interested in the rich flavors of a craft beer and typically don’t like the strong flavor of the Budweiser line.

Drawing from these insights, we decided to rebrand Michelob Light as the “refreshing classic,” using a variety of summer-themed promotions to enforce this concept. Promotions would include seasonal POP displays, seasonal incentives for buyers, and a summer bash for the sales force. All of the promotions would cohesively enforce the concept of Michelob Light as a refreshing light beer. Additionally, we designed a special-edition summer label for the beer. Currently, the Michelob Light label design is rather uninspired, but we want consumers to be able to recognize the brand, and don’t want to create confusion between MichelobLight and Michelob’s summer beer. Therefore, the summer label would keep the major elements of the traditional label, but would transform these elements into summer images by using outlines such as a pair of flip flops, a sun, an umbrella, and a sailboat. Ideally, this would increase consumer desire to buy Michelob Light to take advantage of the limited edition packaging.

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Sales Force Promotion:

To incentivize the Michelob Light sales force to push the beer, we plan on hosting the “Refreshing Classic Summer Bash,” where the top fifty Michelob Light sellers will be invited, along with one guest each, to the end of summer party at company headquarters in St. Louis, Missouri.

The party will be on Friday July 31, 2015 from 3pm until 10pm. Michelob will cover airfare, transportation, and accommodations for all winners. Out-of-state winners will be flown in on Friday morning, where a rented bus will be waiting to bring them to their hotel. Any winners driving will be able to check into the hotel at noon. Starting at 3:30, shuttle buses will take the winners from the hotel to Michelob’s headquarters. Once at the headquarters, winners will be invited to take a tour of the brewery, check out the caricature drawers, snack on some chips and dip, listen to the DJ, or visit the open bar featuring Michelob Light, Budweiser, or Bud Light Lime Straw-Ber-Rita. Butler’s Pantry will provide a dinner at 7:00pm. The headlining artist, George Strait, will perform from 7:30 to 9:30pm. Following the concert, all attendees will be bused back to the hotel. All return flights will leave on Saturday morning. In addition to the entertainment, all attendees will be given a Beer Koozie and a Bottle Opener with “2015 Michelob Light Refreshing Classic Summer Bash.” These prizes will hopefully remind the sales force of the great time they had at the bash long after the event is over.

To win a ticket to the Refreshing Classic Summer Bash, the Michelob internal sales force will need to be one of the top 50 sellers of Micheolob Light. The contest will run from August 1, 2014 until June 30, 2015. To remind the salesforce of the promotion, the top 50 sales people for each month will be sent out via email. These emails will only have the monthly winners, not the overall list, so the contest winners will still be somewhat of a surprise.

Refreshing Classic Summer Bash

Our team at Seniority Consulting has decided to offer a bundling promotion to your various distributors starting this August. We will send out a company wide email about the bundling promotions, and we will also include literature informing the sales force about the specifics of our new promotions. The bundling promotion has a few different components, and we truly believe that this will cause an increase in demand for the Michelob Light brand. Simply, what the bundling promotion is going to do is take one of Anheuser-Busch’s top performing and popular beers and “bundle” it with Michelob Light in the sales exchange between the manufacturer and the individual distributors. There are many ways that the Michelob Light brand can benefit from this promotion, and there are some ways to alter and tweak the promotion along the way that will serve in your favor.

Michelob and Bud Light have a commonality that is very beneficial to the success of our bundling promotion, and that is they’re both manufactured under the brewing powerhouse that is Anheuser-Busch. Bud Light unanimously is the most popular beer in the United States with a 19.7% market share in 2013. Bud Light, the number 1 beer in the United States, doesn’t give distributors difficulty when it comes to selling it so we thought that it would be a great fit for our bundling promotions. We plan to give various discounts and incentives to distributors using Bud Light as an anchor for our promotions. Our vision is to utilize the fluidity of Bud Light, and give the distributors motivation to encourage the sales of Michelob Light to put money in their pockets, while simultaneously increasing the popularity, brand recognition, and reputation of Michelob Light.

Distributor Promotion:Bundling

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More Bundling OptionsAs an initial promotion to draw the interest of distributors, we want to give them a discount on Michelob with their regular purchase of Bud Light. The idea behind this effort is that the distributors will realize the profit potential that they can gain when selling their original Bud Light product, on top of the heavily discounted Michelob supply. Distributors will put forth a greater effort for the sale of Michelob, and this will give the spark needed to progress in a positive direction. The distributors sales force has confidence in selling Bud Light, and we want to instill that same confidence behind Michelob.

Depending on the size of the purchases from distributors we will adjust our promotions accordingly. For example, if South Eagle Distributors in South Carolina submits an invoice for 100 kegs of Bud Light, we would then offer 10 kegs of Michelob Ultra at a 50% - 75% discount. The bundling promotion will be adjustable for different keg sizes, case sizes (30, 24, 18, 12, 6), including both cans and bottles. The initial cost of this promotion should be viewed as an investment, or an advertising expense because we want to help build a future for Michelob, not make a few quick bucks.

Depending on the success that your various distributors had with the initial bundling promotion we can now focus on a different form of incentive for distributors and their sales force that will facilitate sales for you. The distributors that saw the potential profit gain in the first promotion, and sold the discounted supply, will be in a good position to sell more kegs of Michelob to retailers.

The distributors will always be re-stocking Bud Light, which is more than likely the most profitable product they sell, so you can capitalize on their high demand for it. Transitioning from the last promotion we offered to distributors, there is another possibility to entice the distributors’ sales force to push your product. The second promotion is a similar bundle, but the discount is now reversed. We will cover a percentage of their Bud Light purchasing costs, if they successfully sell the stock of full priced Michelob. The quantities of the bundle will remain in similar proportions, but the discount is applied to their Bud Light purchase if the previous shipment of Michelob Light was sold successfully, and in an adequate time frame.

Consumer Promotion:Our customers are looking for a refreshing classic; a light inexpensive beer. From our research, the target market has been defined as primarily males who live within the southern region of the United States. This works to our advantage in terms of how we will be marketing to the consumer because southern states tend to have fewer restrictions on selling alcohol in grocery and convenience stores. We are looking to put our display in fifty stores in the southern region of the United States. In an effort to rebrand the struggling Michelob Light brand, we would like to change the label and slogan, so as to make the beer more marketable and recognizable to our target market. Through our strategic repositioning we would like our customers to recognize a correlation between this refreshing classic and how enjoyable it is to have, especially in those warm summer months, when you want something light and refreshing. We have decided to use the theme of summer for our repositioning and promotional efforts. However, we have made our slogan and rebranding design broad enough that it isn’t restricted to only the summer months. In order to reach our consumers we have decided to include a consumer promotion by using the point of purchase(POP) strategy through a display case. This will be included within the summer fun

Point of Purchase Display

theme. This display should boost short term sales and will capitalize on sales during the summer holidays such as Memorial day, 4th of July, and Labor Day. Our goal is to put Michelob Light in a high traffic area within a grocery store or convenience store depending upon the distributor and space available. Ideally, our display would also be near barbeque and cookout items so consumers would be more likely to consider purchasing Michelob Light with their cookout supplies. We would like this display to be in the shape of a sail boat using the beer cases as building blocks. The sail would be made of plastic material being held up with a pole and on the plastic sail it will read, “Your new summer favorite: the refreshing classic, Michelob Light”. We would like to see this display appear prior to a big summer holiday, ideally 4th of July and have it last for about three weeks. We believe this will not only be attention-grabbing but will also entice shoppers to purchase because of Michelob’s key components: it’s smooth, easy to drink, and inexpensive.

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Budget

overall Summer Bash = $81,385.60Bundling = $5,611.40Point of Purchase Display = $107,500Sticker Rebranding = $5,000

TOTAL = $250,000

More Budget

Cost Per Unit Number of Units TotalFlights To St. Louis 300 100 30000Hotels 100 50 5000Beer Koozie Giveaway 0.2 120 24Beer Opener Giveaway 0.18 120 21.6Open Beer Bar 7 120 840Snacks 2.5 120 300Dinner for Bulter's Pantry 14.5 120 1740Caricature Drawers 120 3 360Tours of Factory 120 0 0Daytime DJ 200 3 600George Strait 40000 1 40000Buses for Transportation 2500 1 2500

TOTAL 81385.6

Rebranding stickers 5000 1 5000TOTAL 5000

Supplies Needed for POP 75 100 7500Cost to Show 1000 100 100000

TOTAL 107500

Bundling 5611.4TOTAL 5611.4

Sales Force PromotionThis budget shows the expenses for all aspects of the Summer Classic Bash. Prices have been estimated using costs from local catering, transportation, and promotions companies. Costs for entertainment have been estimated based on national averages.

RebrandingThis budget is based on a rough estimate for the cost to rebrand and create new labels.

Point of Purchase PromotionThis budget shows the expenses for materials needed for the POP display, as well as estimates to pay the stores for displaying the POP. This obviously represents a large part of our budget, as we hope consumers will help increase demand for Michelob Light.

Distributer PromotionThis budget shows the amount allocated towards the bundling promotions. Once this number has been reached, the promotion will be discontinued.

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About Seniority Consulting

Meg Ciminera is a graduating May of 2014 from Ithaca College with a B.S. in Communications Management Design. Through out Meg’s college career she has enhanced her skills within the events world and developed skills in marketing, sales, and public relations. Meg managed to hold three internships throughout

Teddy Palm is graduating this May from Ithaca College with a B.S in Business Administration with marketing concentration. Over his college career he has excelled within his concentration, while developing crucial business skills that make him an asset for his future employers. Outside of the classroom he has worked in the hospitality industry as a server/bartender, completed two summer-internships at the New York Mercantile Exchange, and worked as a sales associate for a tech-start up company Dashcrowd LLC. Teddy

hopes to apply his knowledge of marketing concepts, and strategies with a job within the marketing sector.

her education. For two years she was a Clear Channel Communications intern thriving in radio promotion and social media. As well as helping start a company in London called Heritage Heirlooms which concentrates on planning trips around your heritage. Meg has realized her passion for event planning and music can be combined in the radio or music events industry and hopes to turn that into her career upon graduation.

About Seniority Consulting

Alyssia is a junior Integrated Marketing Communications major with a minor in Writing. She hails from Cape Cod, Massachusetts, and plans to live somewhere on the East Coast after graduation. She is currently looking forward to studying in Los Angeles during the spring of her senior year.

Rachael Travers is graduating in May 2014 from Ithaca College with a B.S. in Integrated Marketing Communications with minors in legal studies, sports studies, and CMD. In the past four years, she has held a variety of professional positions ranging from an in-house marketing intern for a Fortune 500 technology company to the planner for

all events at Ithaca College’s School of Business to an on-site manager of hospitality for a golf company in Jamaica and the West Indies. From her professional experience, Rachael hopes to work the sports sector in either public relations or event management.

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Sources

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