As this case study begins, Madcap Craftbrew & Bottleworks, Inc. finds itself at the crossroads of having to make critical strategic marketing and promotional decisions regarding its Zebra beer brand. In this paper, the situation will be evaluated in-depth, and courses of action will be chosen based on the analysis of the available data
The problem facing Madcap at the present time is the fact that despite positive consumer feedback and strong results in test markets, the Zebra brand is not as profitable as it could/should be in order to generate sufficient revenues (Rosenthal & Twells, 1999).
Primary Critical Issues
Madcap has to contend with several primary critical issues, some of which are inherent in the craft brewing industry, as well as some that are unique to Madcap itself. In summary, these issues are as follows (Rosenthal & Twells, 1999) :
Microbrew drinkers are typically not brand loyal, making the development of a strong core market difficult
Only a small percentage of beer drinkers are microbrew drinkers
Beverage distributors usually do not like to stock large quantities of craft/microbrews in their retail locations, which results in less product available for sale, which keeps volume sales low
The Zebra brand is not widely recognized, nor does a large marketing budget exist
Current packaging characteristics (the painted bottle, imported from Mexico) have been causing production delays and prompting concerns from retailers who place a higher value on beers with paper labels on the bottles
Zebra is priced lower than competitors such as Sam Adams, placing it in a lower perceived value category than competitors’ brews
Evaluation of Alternatives
Given the challenges posed by the microbrew industry itself, as well as the practical options available to Madcap, the following alternatives, and the viability of each, are as follows:
Employ the new marketing strategy that has been successful in Bloomington test marketing efforts, which includes lower product pricing, more distributor incentives, and more advertising expenditures
Continue with the current positioning and marketing strategy
Proposed Course of Action
The course of action that Madcap should take in this situation, from a strictly strategic point of view, is the employment of the Bloomington plan, with the exception of price adjustments. This choice was made for several key reasons: first, the unconventional and volatile nature of the microbrew industry demands forward thinking and creative marketing; second, price point should be evaluated to avoid pricing the product in such a way as to lower its perceived value in the eye of the consumer. These strategies hold the potential to achieve the desired goals of Madcap in the short and long term.
(Rosenthal & Twells, 1999) (Rosenthal D W Twells R W 1999 Madcap Braftbrew & Bottleworks Inc: Zebra Beer-It’s Not All Black and White)Rosenthal, D. W., & Twells, R. W. (1999). Madcap Craftbrew & Bottleworks Inc: Zebra Beer-It’s Not All Black and White. Richard T. Farmer School of Business Administration, North American Case Research Association.