Marketing Improvement Plan

Prepared by Evan Schuldenfrei BMKT411 | Professor Maynard Lassonde

Table of Contents

I. Context

A. Executive Summary 3 - 4

B. Introduction 4 - 6

C. Customer 6 - 7

D. Company 7 - 8

E. Competition 8

II. Segmentation, Targeting & Positioning (STP)

A. Market Segmentation 8 - 9

B. Target Market 9 - 11

C. Product Positioning 11

III. Strategy & Marketing Mix

A. Marketing Mix 12 - 13

B. Marketing Strategy 13 - 20

C. Marketing Objectives 20

D. Implementation Schedule 20 - 21

IV. Financials

A. Expense Forecast 21

B. Sales Forecast 22

V. Measurable Outcomes & Controls

A. Implementation 23

B. Keys to Success 23

C. Market Research 23

D. Contingency Planning 23

I. Context

A. Executive Summary

Blue Point Brewing Company is the largest microbrewery based in Long Island, New York. In 2014, beer giant Anheuser-Busch InBev acquired Blue Point for $24 million, while operations continue in their Patchogue, Long Island location. The currently maintain three principal concerns: (1) They believe the company is stuck in the ‘regional’ craft brew category, with relatively low brand awareness in potentially profitable new markets of the United States; (2) Growler sales to local customer are lackluster; and, (3) The company’s digital presence is outdated.

I have drafted four goals to strengthen the company’s brand in the minds of both new and existing customer markets: (1) Increase brand recognition, nationwide; (2) Garner positive, public attention through the brewing of a one-off, specialty beer, that will drive their expansion efforts; (3) Build a loyalty rewards program for growler refills at the Blue Point location; (4) Revamp the company’s current desktop and mobile sites, online store offering, and social media accounts.

Blue Point’s efforts will target several important segments, including that of (1) Millennials and (2) Generation X, for their nationwide expansion; and (3) Females, for the specialty brew campaign. Blue Point will position their products to new markets as innovatively brewed and sourced, high quality beer, that is delicately crafted alongside the beautiful waters of Long Island’s South Shore.

Expanding Blue Point’s operations in 2015 is a major opportunity, as craft sales have nearly doubled between 2007 and 2012, from $5.7 billion $12 billion, and are expected to grow to $18 billion by 2017.1 By implementing this Plan’s strategies, before 2016, Blue Point will maximize the effectiveness of their expansion efforts, and “ride the wave” of growth in the craft beer industry over the next several years. Additionally, Blue Point can utilize their relationship with parent company, InBev, to fund this expansion, given their massive budget. These marketing improvements will require $270,000 – representing 0.0173% of InBev’s 2014 advertising budget.

Among Blue Point’s marketing objectives for this Plan will be to (1) Increase product demand by 10% for 2016, 15% for 2017, and 20% for 2018; (2) Enter into at least $5 million in distribution contracts for new markets for the year 2016, $7.5 million for 2017, and $10 million for 2018; (3) Increase total social media following by 100% in 2016,

                                                                                                               1 http://www.mintel.com/press-centre/food-and-drink/the-rise-of-craft-beer-in-the-us-craft-beer-

 

125% in 2017, and 150% in 2018; (4) Earn 2% total market share in the craft beer industry by 2016, 2.75% by 2017, and 3.5% by 2018. Blue Point’s management will measure and evaluate key performance indicators by comparing monthly sales to both the figures in the Sales Forecast, and sales from the same month, in previous years.

Keys to success lie in Blue Point’s ability to accurately envision and determine which new markets will provide the greatest sales value to their company; their agility in adapting to unexpected changes and new market trends; and the effectiveness of Blue Point’s new digital presence, in making sure that both new and existing customers can easily and quickly find information that will allow them to make sound purchase decisions.

If Blue Point’s management finds that their new market entry sales are much lower than expected, they may decide to pull out, reevaluate other untapped markets, and proceed from there. This may cost Blue Point tens, or even hundreds of thousands of dollars; however, developing a presence in the most appropriate, profitable markets is paramount for the company’s success. Once Blue Point conquers the United States market, I will determine the viability of entering the global market. But that’s for another plan!

B. Introduction

Blue Point Brewing Company is a microbrewery based in Patchogue, Long Island, New York. Founded in 1997 by Mark Burford and Peter Cotter, Blue Point began as a two-man team, and became in 17 years, the largest craft brewery on Long Island, and was ranked #34 in the Top 50 Craft Breweries in the U.S., by the Brewers Association, for the year 2013.2

Blue Point’s Regional success was acknowledged in a February 2014 announcement3 from the largest brewing company in America, Anheuser-Busch InBev, stating their acquisition of Blue Point for $24 million. With this major business transaction, comes the ability for Blue Point to strengthen its presence in current markets, expand sales territory to new and emerging markets, fill underserved demographic market segments, and enhance its branding efforts; given InBev’s $1.56 billion annual advertising budget.4

The following Marketing Improvement Plan is pertinent to several of Blue Point’s

                                                                                                               2  http://www.brewersassociation.org/press-­‐releases/brewers-­‐association-­‐lists-­‐top-­‐50-­‐breweries-­‐of-­‐2013/  

3  http://www.businessinsider.com/ab-­‐inbev-­‐buying-­‐blue-­‐point-­‐2014-­‐2  

4  http://bit.ly/1JdhBdd  

Executives,5 including President, Mark Hegedus; Founder & Senior Advisor, Peter Cotter; Founder & Senior Advisor, Mark Burford; Brand Manager, Curt Potter; Brand Activation Manager, Elyse Carlucci; Sales Director, John Tomasetti; and Brew Masters, Jim Richards, Chris Amcher, and Eric Ahlberg. Each member’s role(s) in the Plan will be discussed later.

After speaking briefly with Mr. Burford and Mr. Cotter, in January 2015, the principal concerns of Blue Point’s Executives are as follows:

1. They believe the company is stuck in the ‘regional’ craft brew category, with relatively low-to-no brand awareness, in potentially profitable new markets of the United States

2. Growler sales to local customers are lackluster, and this is the company’s largest profit margin sales item

3. The company’s digital presence is outdated.

By analyzing these principal concerns, the following goals have been drafted to strengthen the company’s brand in the minds of both new and existing customer markets:

1. Increase brand recognition, nationwide 2. Garner positive, public attention, through the brewing of a one-off, specialty beer,

that will drive their expansion efforts 3. Build a loyalty rewards program for growler refills at the Blue Point location 4. Revamp the company’s current desktop and mobile sites, online store offering,

and social media accounts

By executing these ideas, Blue Point will provide significant value to the craft beer market in several ways:

• Entering new markets throughout the United States will provide greater choices for buyers and consumers, who will be able to expand their tastes through the discovery of Blue Point’s beers

• Local customers will be rewarded for their ongoing brand loyalty • Brand enthusiasts can more easily express their excitement and preference toward

the brand • Viewers and customers will have a greater digital experience and lower

search/information costs • A rapidly growing, largely disserved market segment will be served with a

                                                                                                               5  http://bluepointbrewing.com/bpbc/about/contact-­‐us/  

 

dignified product that makes up for the previously failed efforts of other brew companies.

Due to the multifaceted nature of this Marketing Improvement Plan, there will be several target segments in fulfilling these objectives.

C. Customer

According to a 2012 study by global market research firm, Mintel, it has been determined that craft beer drinkers maintain the following preferences and attitudes:

• 93% of import beer drinkers, 88% of domestic beer drinkers, and 84% of craft beer drinkers, value the discovery of new beer

o Potential Implication: Introducing Blue Point to new regions of the country, or even other countries, may prove beneficial out of pure novelty; however, if this is true, Blue Point will have to maintain customer interest in their products, or the effect may wear off over time

• Craft beer is favorable to 49% of the Millennial population and 40% of Generation X individuals

o Potential Implication: Introducing Blue Point to emerging beer-loving cities that maintain a relatively high percentage of individuals between 21 and 40, could provide a substantial increase in sales for the company

• 84% of craft beer consumers enjoy choosing their beer depending on the season o Potential Implication: Since Blue Point maintains five seasonal brews,

including their Spring Fling Ale, Summer Ale, Oktoberest, Pumpkin Ale, and Winter Ales, they will be a strong competitor in the market for this overwhelming majority of drinkers

• 73% of craft beer drinkers say they usually know what brand of beer they are going to buy before they go to the store

o Potential Implication: This may actually work against Blue Point’s expansion efforts into new markets, given that customers in these markets may not consider drinking anything except what they are used to drinking

§ This provides an ambiguous caveat, in that, craft beer drinkers enjoy discovering new beers, yet many of them decide beforehand, what they are going to purchase

• 45% of craft beer drinkers indicate that they would try more craft beers if they knew more about them

o Potential Implication: By completely revamping Blue Point’s web site and working to increase their overall digital presence (blogging, SEO, reviews, encourage user-generated content) potential customers in new markets, and even in existing ones, may decide to purchase Blue Point beer over that of a competitor, since they have information readily available and easy to find.

D. Company

My research includes a SWOT analysis, which evaluated the strengths, weaknesses, opportunities, and threats that Blue Point may face in the implementation of these improvements.

Among Blue Point’s [internal] strengths is its strong regional fan base, reputable brand perception and proven track record within the craft beer world, including over 20 awards and accolades from tasting competitions; current partnership arrangements with a major distributor, and, most importantly, a strong and creative management team that maintains a cache of expansive knowledge and innovations in brewing unique beers.

Blue Point also has several [internal] weaknesses, as well, including their outdated digital presence, which is crucial in earning business from the Millennial age group; lack of brand recognition relative to other craft breweries; stagnant position as a ‘regional’ brewing company, and weak sales from their Growler Station. However, effective implementation of this Plan will mitigate these weaknesses and earn Blue Point a nationwide presence.

Expanding Blue Point’s operations in 2015 is a major opportunity as craft sales have nearly doubled between 2007 and 2012, and are expected to grow to $18 billion by 2017.1

By implementing this Plan’s strategies before 2016, Blue Point will maximize the effectiveness of their expansion efforts, and “ride the wave” of growth in the craft beer industry, over the next several years. Additionally, Blue Point can utilize its relationship with parent company, InBev, to fund this expansion, given their massive budget.

Along with these changes come a number of threats, including unexpected fluctuations in market prices for brewing ingredients; the possibility that current Blue Point enthusiasts will be turned off by the brand if they become too mainstream and saturate the craft market; the notion that 50% of craft drinkers express interest in locally made beer,6 and may not embrace the Blue Point brand due to its distant location; the arrival of new

                                                                                                               6  http://www.beeradvocate.com/articles/384/  

 

market entrants, who will be competing for the same share of business; and the simple, but overlooked fact that craft beer is a trend with explosive growth, and may unexpectedly decline over time.

These threats greatly justify the need to conduct research and analysis with the utmost accuracy and detail on the part of Blue Point’s management team, as a large amount of money is at stake.

E. Competition

According to the Brewers Association, there were 3,418 craft breweries operating in the United States (+19.4% from 2013), including 135 regional craft breweries (+13.4% from 2013), 1,871 microbreweries (+27.8% from 2013), and 1,412 brewpubs (+10.3% from 2013). In 2014, alone, 456 microbreweries opened in the United States, proving that competition is increasingly tight for the craft beer industry.

Blue Point Brewing Company maintains both direct and indirect competition in the craft brew industry. Amongst its direct competitors are fellow regional breweries, including many New York State brewers, such as Southern Tier Brewing Company, Ithaca Beer Company, Barrier Brewing Company, Brooklyn Brewing Company, and Greenport Harbor Brewing Company.

With the acquisition of Blue Point by InBev, Blue Point’s indirect competitors include several beer giants, who may purchase craft breweries in the manner that InBev did with Blue Point, including that of D.G. Yuengling & Son, Boston Beer Company (Sam Adams), Sierra Nevada, and Lagunitas Brewing Company.

II. Segmentation, Targeting & Positioning

A. Segmentation

Blue Point’s efforts will target several important segments, including that of (1) Millennials and (2) Generation X, for their nationwide expansion; and (3) Females, for the specialty brew campaign.

Firstly, here are some general demographic statistics for the craft beer industry, provided by the 2013 Mintel Study:

• Men compose 71.9% of craft beer consumers, while women compose 28.1% • Ethnically, 85.6% of total craft beer consumers identify as Caucasian • White, male, Millennials and Generation X’ers tend to be the number one

consumer of craft beer

• Craft drinkers from the Midwest are significantly more likely (29%) than those from other regions, to support a particular brewery, while 57% of respondents agreed that the brand of beer you choose “says a lot about you,” with 47% of all respondents stating that it is a source of pride to try as many beers as possible

• The southern United States is the smallest craft-drinking region, with only 16% of respondents identifying with this area

B. Targeting

Given this information, Blue Point will target the following segments:

(1) Millennials/Generation Y

The Millennial generation is perhaps the most significant market to attract, as they make up 32.9% of all craft beer consumers. 7 According to the article, ‘The Millennial Consumer Craves Craft Beer’:

“Millennials love beer. Reasons why they’re choosing craft beer over leading brands includes variety, taste, and the experimentation with seasonal and local choices. Millennials know what they want, and with craft beer, there’s an option for every taste bud.”8

This is certainly true, as 86% of those surveyed noted ‘flavor’ as the most valued craft attribute. With nearly 2,600 unique craft brands sold in 2012 – a 24% increase over 2011 – these adventurous Millennials will not run out of brews to try anytime soon.

Another interesting result of the study is that over 50% of Millennials order their favorite craft beer with food at local restaurants, while only 22% try a new craft beer, which proves their loyalty to specific brands. This could prove a challenge in penetrating new markets.

The main challenge that craft beer faces with Millennials is the ability to communicate its value over that of macro-brewed beers, as only 17% of those surveyed believe that craft beer offers this greater value. Despite the potentially discouraging figure, 50% of

                                                                                                               7  http://dcinno.streetwise.co/2013/03/27/dissecting-­‐the-­‐craft-­‐beer-­‐consumer-­‐a-­‐look-­‐at-­‐what-­‐an-­‐awesome-­‐beer-­‐drinker-­‐  looks-­‐like/  

8  http://www.millennialmarketing.com/2014/01/the-­‐millennial-­‐consumer-­‐craves-­‐craft-­‐beer/  

 

Millennials surveyed have consumed craft beer at least once,9 which shows the prominent emergence of this phenomenon.

In order to effectively target this segment, Blue Point must fill the void in their digital marketing presence and utilize social network campaigns, while expanding their distribution efforts to new territories. Additionally, emphasizing the notion of variety, flavor, and value, in their promotion will prove beneficial in Blue Point attracting this segment.

(2) Generation X

Generation X represents another important target segment, given its 23.9% composition of total craft beer consumers.10 According to the 2013 Mintel study, “Beer drinkers aged 36 to 47 are slightly less likely than consumers aged 21 to 35 to show a preference for the taste of craft beer.” Additionally, “Members of Generation X are more likely than their younger counterparts to indicate that imported beer and craft beer are of similar value.” 9

In order to effectively target this segment, Blue Point must, as with Millennials, effectively communicate the value of their product, over those that these [long-time] drinkers usually consume. Utilize a comparative angle in their promotion may prove beneficial in attracting this segment.

(3) Females

According to Dr. Bart Watson, Chief Economist for the Brewers Association, women account for 37% of total craft beer consumption in the United States, with women 21 to 34 representing 15% of total consumption. Additionally, Regan Stephens, Communications Director at BeerMenus.com stated, “As the demographic changes, the breweries taking female craft beer drinkers seriously will benefit.” 7

To further justify focusing on this market segment, Hayley Jansen, Beer Sommelier at New York’s Taproom No. 307, suggested that previous marketing efforts towards women have failed tremendously, and Chicagoist Beer Writer, Lorna Juett, stated, “Dumbing women drinkers down to the lowest common beer denominator does not legitimize our presence in the marketplace.”

                                                                                                               9  http://marketrealist.com/2013/12/craft-­‐beer-­‐attracts-­‐millennials-­‐consumers-­‐momentum/  

10  http://www.nytimes.com/2010/01/27/dining/27growl.html  

 

These statements make it explicitly clear that the female craft beer drinker has been severely disserved; in reality, all they want in a craft beer is the same thing that everyone else wants – flavor, taste, and value. These notions will be utilized in effectively advertising and attracting business from this segment.

In 2007, an organization called The Pink Boots Society was created to “empower women beer professionals to advance their careers in the Beer Industry through education.” 11 By bringing more females into the world of brewing, this emerging target segment will hopefully grow successfully in its shadow.

C. Positioning

To maximize the effectiveness of Blue Point’s marketing strategies, they will position their products to new markets as innovatively brewed and sourced, high quality beer that is delicately crafted alongside the beautiful waters of Long Island’s South Shore. In order to express the sense of local pride that comes with Blue Point’s products, they will close the perceived distance between the new markets and the brewery by advertising with sayings such as “From Long Island, with love,” “From our coast, to yours,” and, “Too good to be only regional.” These sayings will hopefully offer a sense of closeness to new [West Coast] markets, and will attract them to try Blue Point’s beers.

Regarding craft beer market sales, in 2014, they rose 17.6%, to nearly 21.8 million barrels from the previous year, resulting in a 22% dollar sales growth (to $19.6 billion). Overall, craft beer represented 11% of total barrel sales for 2014. Additionally, an incredible statistic shows that regional microbrewery production (which Blue Point fits into) grew from 3.751 million barrels in 2004, to 17.56 million in 201412 - a 368% increase.

A Brewers Association info graphic also shows the strength of the state of craft beer, with 615 brewery openings, and only 46 closings, in the year 2014. As of the end of 2014, small brewing companies employed over 115,000 individuals, representing a 4.3% increase from 2013.13

                                                                                                               11  http://pinkbootssociety.org/about-­‐us/  

12  http://www.brewersassociation.org/statistics/national-­‐beer-­‐sales-­‐production-­‐data/  

13  http://www.brewersassociation.org/industry-­‐updates/2014-­‐craft-­‐beer-­‐data-­‐infographic/  

 

III. Strategy & Marketing Mix

A. Marketing Mix (4 Ps)

(1) Product

Blue Point will continue to sell their 23 varieties of beer, but targets new markets with only those of the highest popularity, including that of its Toasted Lager, Blueberry Ale, Hoptical Illusion, Spring Fling Ale, Summer Ale, Winter Ale, and RastafaRye Ale.

The products will be of high quality, as they always have been, and will be communicated effectively on bottles, packaging, and company marketing materials and web page.

Out-of-region customers will be able to purchase Blue Point products in a 6-pack of 12 oz. bottles, single 22 oz. “bomber” bottles, and single 64 oz. growlers (subject to local availability). Additionally, a combination of Blue Point’s most popular brews will be available in a specialty “sampler” 12-pack, of 12 oz. bottles, that includes four different styles – allowing new customers to determine which beer(s) they enjoy the most.

(2) Price

The list prices of Blue Point’s products will remain similar to that of its current prices, with a 6-pack costing around $11.99, a “bomber” costing around $4.99, a growler refill costing around $11.00, and the variety pack costing $21.99. Because Blue Point will incur increased shipping expenses due to the distant location of new markets, they will absorb the expense into their cost of doing business, as not to disturb the company’s image of providing high quality beer at fair prices.

(3) Place

Blue Point will attempt to secure distributorship, nationwide, through the largest beer wholesaler in the United States – Reyes Beverage Group. Reyes will distribute Blue Point’s products to higher-end liquor stores and specialty beverage shops in new markets.

Blue Point will also look to distribute their products to well-known local bars and restaurants in the areas that they choose to enter, as this provides ample opportunity for diners to try Blue Point’s most popular beers with their food. After trying these flagship beers, customers will [hopefully] go to their nearest Blue Point retailer, which they will be able to easily find on the new website, and purchase more of their products.

(4) Promotion

Blue Point’s promotional efforts will lie mainly within digital marketing, including its revamped site, social media promotions and campaigns, and user-generated content curation from all over the web, including YouTube, blog posts, articles, etc.

When entering new markets and rolling out new products, Blue Point will utilize major public relations (PR) websites for press release distribution, including that of PR Newswire, PR Web, and Market Wired.

B. Marketing Strategy

Blue Point’s marketing strategies are as follows:

(1) The first facet entails increasing brand recognition, nationwide. Blue Point will undertake the research, evaluation, and entry of new markets by utilizing leading global information and metrics company, Nielsen, mainly their PRIZM Market Segmentation tool.

This geo-demographic analysis will look at new regional markets, including that of emerging ‘beer-loving’ cities, such as San Diego, Seattle, San Francisco, Denver, and Portland;14 and combine demographic data on those specific areas to determine which one(s) would provide the greatest value to their company.

For example, For example, if the PRIZM research determines that Portland, Oregon is the second largest craft beer-drinking city in the United States, with an average beer drinking demographic of 26 years old, male, single, $50,000 - $74,999 annual income, and a craft beer-drinking annual growth rate of 2% volume, per person– this may be a valuable market for Blue Point to enter. However, this must be juxtaposed against other entry possibilities.

Perhaps Blue Point would garner sales five times greater by utilizing the Portland- entry efforts and resources to instead target San Diego, CA. All of this information will be gathered and compared when conducting the PRIZM Segmentation Analysis. Along with the tacit knowledge of Blue Point’s management, they will be more properly suited to make a market entry decision.

Blue Point faces an additional challenge in expanding their markets, as they are based on the East Coast, yet they plan to enter major, emerging ‘beer-loving’ cities that happen to be located 2,000 - 3000 miles away. Craft beer drinkers are often loyal to regional or home-state breweries, rather than out of state, let alone cross- country, ones. Among the top-ten craft brew consuming states (2013) were (1) California, (2) Washington, (3)                                                                                                                14  http://bit.ly/1koAuOm  

Colorado, and (4) Oregon.15 If this high propensity to consume local craft brews over distant ones is an actual phenomenon, it must be determined before actually entering the market, to prevent the waste of valuable time and resources. These efforts will hopefully allow Blue Point to break their ‘regional’ stereotype by entering new markets across the country.  

President Mark Hegedus, and Senior Advisors & Presidents, Mark Burford and Pete Cotter will hire outside consultants to perform the PRIZM analysis, and will be responsible for deciding which markets to enter. These top management individuals will report to Sales Director, John Tomasetti, who will then focus on creating the appropriate strategic distributor partnerships, nationwide.

Additional Blue Point management members included in the actual expansion efforts include Brand Manager, Curt Potter, who will integrate this expansion into social media conversation; Brand Activation Manager, Elyse Carlucci, who will focus on finding new ways to relate with these customers; and Sales Director, John Tomasetti, who will maintain and oversee all distributor relationships. These individuals will manage all aspects of this expansion strategy, and report all findings and recommendations to President, Mark Hegedus, for approval.

(2) The second facet of the plan - garnering positive public attention, will be executed during the same time period in which the company actively enters new markets, and will hopefully create a synergistic effect for both their expansion efforts, and gaining traction in the underserved segment, that is, female beer drinkers.

According to a November 2014 article from lifestyle site, ‘First We Feast’, Chief Economist for the Brewers Association, Dr. Bart Watson, presented the surprising statistic, that, females, aged 21-35, represent 15% of total craft beer consumption.16 The article then notes Beer Writer and Author of ‘Hey, Brewtiful,’ Jessica Miller’s statement that, “Women are still predominantly cast as non-beer drinkers, and furthermore, details the “cringe-worthy” efforts of Chick Brewing Company, who attempted to market and sell an American Pale Lager, specifically for women, with pink label, and all. Another brewery, called Clown Shoes, also attempted to successfully market a beer to women, known as ‘Tramp Stamp,’ which, as you can imagine, garnered a collective eye-roll from the demographic. These failed efforts provide a potentially nation-wide, brand-boosting, industry-changing opportunity for Blue Point, to serve the female segment correctly, and with dignity, unlike the efforts of Chick Beer and Tramp Stamp.

                                                                                                               15  http://www.winebags.com/v/ALookatCraftBeerandWomenAwesomeInfographic.pdf  

16  http://firstwefeast.com/drink/how-­‐craft-­‐beer-­‐fails-­‐its-­‐female-­‐fan-­‐base/  

Blue Point will create a beer and digital campaign that pays homage to the female human in the most scientific sense, rather than create a sexually charged or sexist brand story that insinuates women cannot/do not enjoy the same beer that men do. The brew will be called ‘Hop-o-Gametic: Double X Ale,’ a double, or maybe triple- entendre that combines wordplay, science, and correcting the common fallacies of the female beer drinker. Have no idea what this means? It will make sense in a minute!

Note: The female human species maintains the ‘XX’, or ‘double X’ chromosome, and is known as the “homogametic sex.” Since ‘Hop-o’ and ‘homo’, pronounced “hah-mo,” sounds similar when spoken out loud, this wordplay fits nicely.

Here we go...

Hops are, perhaps, the most romanticized ingredient in beer production, in that companies often take pride in sourcing hops that are rare, expensive, or unique in some way, including the geographic regions which they are cultivated, or the unusual aroma or other traits which the hops give to the beer. Additionally, hops give a beer its bitter characteristic, which, many believe females do not like, hence, the whole notion of a bitter beer being a ‘guy-beer’. By creating a brew that’s packed with this bitter, hoppy flavor, it goes against the current stereotype of the female beer drinker.

Due to the prominence of the romanticization of hops within the craft industry, brewers sometimes create a play-on-words for the beer name that includes the word ‘hop’ in it, somehow. For example, Blue Point, itself, offers a classic, American- style India Pale Ale (IPA), called ‘Hoptical Illusion,’ clearly a play on ‘Optical Illusion.’

The background story comes from Blue Point’s sourcing of a rare type of hop from a small farm in Oregon, which they enjoyed the aroma of so much that they purchased the entire crop. Additionally, Blue Point brews Hoptical Illusion with a “generous amount of this select hop that’s added five different ways for maximum hop flavor.”17

Other craft breweries that utilize this wordplay in their beers include that of Hopslam Ale by Bell’s Brewery; Hop Stoopid by Lagunitas Brewing Company; ApriHop by Dogfish Head Brewing Company; Modus Hoperandi by Ska Brewing Company; Pure Hoppiness by Alpine Beer Company; and over 20 others, according to a Beer Advocate search query.18

On to the ‘Double X Ale’ part of the name – as mentioned before, the human female

                                                                                                               17  http://bluepointbrewing.com/bpbc/microbrews/hoptical-­‐illusion/  

18  http://www.beeradvocate.com/search/?q=hop&qt=beer  

species maintains the XX, or ‘double X’ chromosome, and if you say the words “Double X Ale” out loud, it sounds very similar to “Double XL” which infers very large size. Because of the beer’s heavy use of hops, its flavor will be “Double XL,” and the beer happens to be Ale – one of the most common brewing styles.19

By combining these concepts, you get an incredibly flavorful beer that represents the antithesis of a common fallacy among beer drinkers, and furthermore, alludes to science, without any sexist or sexually charged innuendo – sorry feminists out there; there’s nothing to complain about with this one!

Additionally, men may even drink Hop-o-Gametic: Double X Ale, due to the subtleness of the name; on the other hand, you would be hard-pressed to find a male willing to drink Chick Beer, or Tramp Stamp.

A close friend of Blue Point’s, Jim McCune, will be responsible for designing the label, in a manner that aligns with the story of the beer, as he has had great success with designing previous Blue Point beer labels. Mr. McCune will report to President, Mark Hegedus; and Brand Activation Manager, Elyse Carlucci.

As for the actual brewing process, Brew Masters, Jim Richards, Chris Amcher, and Eric Ahlberg will be responsible, and will report to President Hegedus regarding the project’s status, and update Brand Manager, Curt Potter, on news regarding the brew process, which he will then be able to “hype up” on social media, since the brew process takes around one month from the day of brewing, through fermentation and settling time. The brew will be sold only at their tap house in Patchogue, which will hopefully bring a sense of exclusivity to the project.

Brand Manager, Curt Potter, will be responsible for the daily operation and monitoring of this digital campaign, including all daily social media posts, customer engagements, and implementation of paid social network ad platforms, such as Facebook Ads and Twitter Ads. Mr. Potter will report to President Hegedus on all outcomes of the digital campaign.

(3) The third facet of the Plan is not nearly as entertaining as the second, but is quite lucrative, and involves building a loyalty rewards program that will target Blue Point’s local, Long Island market, in order to drive more sales of their most profitable item, growler refills.

Before explaining the specifics, first, I would like to provide a brief history of the ‘growler’ phenomenon. According to beer review giant, Beer Advocate, the story is as                                                                                                                19  http://en.wikipedia.org/wiki/Ale  

 

follows:

“In the late 1800s and early 1900s, fresh beer was carried from the local pub to one's home by means of a small-galvanized pail. Rumor has it that when the beer sloshed around the pail, it created a rumbling sound as the CO2 escaped through the lid, thus the term "growler" was coined.

Before World War II, city kids used to bring covered buckets of draft beer from a local bar or brewery to workers at lunchtime or to their parents at dinnertime, a practice called "rushing the growler."

In the 50s and 60s, waxed cardboard containers with lids were used to take home beer; it's said that they were round and resembled take-out Chinese soup containers. And, in many US states, it used to be (and still is) illegal for "liquor stores" to be open on Sunday. So if you wanted beer on Sunday you went to a bar and bought some of these "containers" of draft beer. However by the late 60s many bars had switched to plastic and eventually they were allowed to sell packaged beer after hours. Soon after, many states allowed Sunday sales at liquor stores and the concept of the growler soon died.

In the early 80s, Newman Brewing in Albany, NY used to sell soft plastic gallon containers of their beer. Apparently if you brought the empty back to the brewery, they'd replenish it with more beer.

A claim to the modern day growler states that in 1989, Charlie Otto and his father were discussing the dilemma facing the Otto Brothers Brewery. They wanted to offer "beer-to-go" for their local customers, but they were not yet in a position to bottle. Father Otto suggested the use of "growlers," which were used in his younger days, but Charlie recognized the need for an updated package type. He purchased a small silkscreen machine, and set it up on his patio. Soon he was silk-screening his logo on half-gallon glass bottles that resembled moonshine jugs. The modern-day "growler" was introduced.

George Bulvas III, brew master at Water Street Lake County Brewery, WI, suggests that growlers are named for the buckets of beer once given to factory workers before their stomachs began to "growl" from hunger.

Whatever. Nowadays, a growler is simply a glass jug that carries a half-gallon of beer. However, some can get rather extravagant holding upwards of two liters with a clampdown ceramic top and a metal

handle/grips (German-style). You can even buy specially designed cooling packs complete with carrying straps for your growlers, but we'd probably pummel you to the ground for looking like a complete dork.

Growlers are filled straight from the tap, sealed with a twist-cap, often with a plastic wrap over this if filled ahead of time, and are sometimes labeled. Filled prices range anywhere from around $4 to $15 or more. A deposit must be paid, often included in the price, and chances are if you bring back your washed growler, you can get a refill for a cheaper price. Just note that you must always refrigerate growlers. Doing so will give them a shelf-life of 7-10 days, or around 2-3 days once opened if you’re lucky.

Almost all brewpubs sell growlers these days, as do many breweries. And regardless of its true origin the growler is a great way to take home some fresh brew from a local brewery or brewpub.” 20

Over the past several years, a recent increase in the sale of beer growlers has been noted, including in a January 2010 New York Times ‘Dining & Wine’ article, titled ‘The New Old Way to Tote Your Beer’. 21

Blue Point has acknowledged this emerging trend in beer drinking by providing not a ‘spigot-in-the-wall’ growler refill, as some maintain, but rather a state-of-the-art growler station, in 2011, from a startup, aptly named, The Growler Station, and currently offers twenty22 of their highly rated brews for on-the-go enjoyment.

Blue Point has given us exclusive access to the following financials with regards to their (net) growler and refill sales over the past 4 1/3 years:

2011: $4,500���

2012: $6,700

���2013: $8,800���

2014: $11,300

                                                                                                               20  http://www.beeradvocate.com/articles/384/  

21  http://www.nytimes.com/2010/01/27/dining/27growl.html  

22  http://growler-­‐station.com/main/brewery/blue-­‐point-­‐brewing-­‐company/page/2/  

���2015: $3,600 (through April)

Even with this steady annual growth in growler sales, Blue Point believes that they can “do better” if their local customer base is somehow encouraged to purchase more growler refills. This specific aspect of their business is so important to them because, as mentioned, growler refills represent their highest profit-margin product; and, additionally, being the warm, friendly people they are, they especially thrive on seeing locals enjoy the unique fruits of their labor.

By interpolating the brewing-related expenses provided by a 2014 Huffington Post article, ‘Here’s How a Six-Pack of Craft Beer Ends Up Costing $12,’ I have determined that 64 oz. of craft beer costs a company approximately $1.41, and includes that of labor, malt, hops, and yeast. Because the beer is brewed at their same [Patchogue] location23, there is effectively zero cost for filling and storing the kegs that the growler station taps each time a customer fills up.

After speaking with Blue Point, I have learned that, on the retail level, Blue Point sells the actual growler container for a one-time, $11.99 fee, and refills range from $8.99 to $14.99, with a mean of $11.99, plus tax. Using these numbers, Blue Point averages $10.59 in profit per refill – a 750% profit margin.

A quick Google search will show that implementing a purchase rewards system can be extremely profitable in retaining loyal customers,24 utilizing the notion of Ivan Pavlov’s ‘Classical Conditioning’ experiment,25 which has been prominent in both psychology and consumer behavior for over 100 years.26 I plan to create a fixed- schedule loyalty rewards program, utilizing the powerful, customizable system, ‘mplifyr’. 27 Using mplifyr is simple, entailing the business to purchase ‘Universal Points’ in ‘lots’ of 4,400 units, each lot costing $110.00, total, or 2.5 cents per unit, with transactions processed via the company site, mobile app, or integrated POS system, at Blue Point’s location.

When an enrolled customer purchases the growler container and first fill, they will be awarded with 10 points. They will additionally be rewarded 5 points for each ‘full’

                                                                                                               23  http://bluepointbrewing.com/bpbc/about/faq/#faq303  

24  http://blog.fivestars.com/psychology-­‐loyalty/  

25  http://bit.ly/1OTbNGU  

26  http://www.simplypsychology.org/pavlov.html  

27  https://www.mplifyr.com/business-­‐info#about-­‐us  

growler refill purchased, meaning one container/fill purchase and eight refills earns them one free refill from any of Blue Point’s offerings. (50 Points)

This could potentially drive sales higher because refills come in the form of 1⁄4, half, and full refills; by offering points for only ‘full’ refills, this will hopefully encourage customers to purchase these, and ultimately, increase sales volume.

Sales Director, John Tomasetti will be primarily responsible for overseeing the new loyalty program, and will report to President, Mark Hegedus, on all outcomes. Brand Manager, Curt Potter, will promote the new loyalty rewards system on Blue Point’s social media networks, and report results to Mr. Hegedus, as well.

(4) The fourth, and final facet of the plan entails improving the company’s current digital marketing presence, as their website has been sporadically and inconsistently updated over the years. Because digital/content marketing has become so important to a company’s potential success, I would like Blue Point to take advantage of this by modernizing features and optimizing the availability of information and layout of their site for viewers of all (legal drinking) ages to enjoy and value.

With this said, after analyzing Blue Point’s [brand] culture, I would, however, like to maintain their rustic ‘look and feel,’ so as not to dishearten loyal, existing customers from drinking Blue Point. This undertaking will require a delicate balance of modernization and company tradition.

Brand Manager, Curt Potter, will be responsible for working with a web designer to revamp the company’s current site, and will report to both Mr. Burford and Mr. Cotter, for content approval, and also to Mr. Hegedus, on all progress.

C. Marketing Objectives

Among Blue Point’s marketing objectives for this Plan will be to (1) Increase product demand by 10% for 2016, 15% for 2017, and 20% for 2018; (2) Enter into at least $5 million in distribution contracts for new markets for the year 2016, $7.5 million for 2017, and $10 million for 2018; (3) Increase total social media following by 100% in 2016, 125% in 2017, and 150% in 2018; (4) Earn 2% total market share in the craft beer industry by 2016, 2.75% by 2017, and 3.50% by 2017.

These benchmarks may be lofty; however, with strong marketing efforts from Blue Point, they could turn their already-reputable regional brand, into a national brand.

D. Implementation Schedule

In order to take maximum advantage of the rapid growth in the craft beer industry, Blue

Point will implement these changes over the next six months. The schedule is as follows:

April 2015: Present this Plan to Blue Point executives; have them agree to funding commitment; register with the mplifyr rewards system and begin promoting locally and digitally; begin revamping the company website

May 2015: Perform PRIZM segmentation analysis and evaluate new markets; finish revamping company website so it is ready for summer

June 2015: Decide on final new market(s) to enter and contact Reyes for distributorship; prepare to promote the Hop-o-Gametic: Double X Ale brewing campaign

July 2015: Launch the Hop-o-Gametic campaign, which will run through September; continue heavy promotion through this time; begin distribution to new markets

August 2015: Monitor progress of sales in new markets, perform changes as necessary; continue promoting Hop-o-Gametic campaign

September 2015: End Hop-o-Gametic campaign in time for autumn, by hosting a celebration at Blue Point’s Patchogue location; analyze sales in the newly entered markets; analyze results of customer loyalty rewards program, and analytics regarding the new site

IV. Financials

A. Expense Forecast

The following expense forecast has been drafted on a per-item basis, as follows:

• Geo-demographic analysis and market entry research and implementation ($50,000)

• Loyalty rewards program for growler refills ($25,000) • Stock new inventory for online store ($15,000) • Total cost of Hop-o-Gametic brewing campaign ($75,000) • Company website revamp ($5,000) • General advertising and promotion ($100,000)

These marketing improvements will require a budget of $270,000, which represents 0.0173% of InBev’s 2014 advertising budget. Because this undertaking could prove highly successful in bringing the Blue Point name to stores and individuals, nationwide, spending this relatively infinitesimal amount on what could become InBev’s craft brew powerhouse, is certainly worth it.

B. Sales Forecast

The following Sales Forecast has been drafted for Blue Point’s 2015 sales activities, taking seasonality and January – April’s existing sales, into account:

V. Measurable Outcomes & Controls

A. Implementation

Blue Point’s management will measure and evaluate key performance indicators by comparing monthly sales to both the figures in the Sales Forecast and sales from the same month in previous years, where applicable. Blue Point will also monitor its increase or decrease in market share and production volumes, which will facilitate in determining the marketing improvement’s effectiveness.

B. Keys to Success

Keys to success lie in Blue Point’s ability to accurately envision and determine which new markets will provide the greatest sales value to their company; their agility in adapting to unexpected changes and new market trends; and the effectiveness of Blue Point’s new digital presence, in making sure that both new and existing customers can easily and quickly find information that will allow them to make sound purchase decisions.

C. Market Research

In addition to gathering Blue Point’s sales data, I will also monitor the entire craft industry’s sales trends, comparing Blue Point’s results to these indicators, as well as to other competitors within the Northeast, and those that resemble the closest brand ‘feel’ and perception to that of Blue Point.

D. Contingency Planning

With several moving parts in this Plan, it lends itself to the possibility of failure, which is unavoidable when undertaking any entrepreneurial activity. If Blue Point’s management finds that their new market entry sales are much lower than expected, they may decide to pull out, reevaluate other untapped markets, and proceed from there. This may cost Blue Point tens, or even hundreds-of-thousands of dollars; however, developing a presence in the most appropriate, profitable markets, is paramount for the company’s success.

Overall, I believe that the items included in this Marketing Improvement Plan will allow Blue Point to become one of the most well-known craft breweries, not just in the Northeast, but nationwide, even with thousands of other craft breweries competing for the same business. Once Blue Point conquers the United States market, I will determine the viability of entering the global market. But I will save that for another Plan!