Question

Brewing companies face a changing, challenging market. Large brewers like AB InBev, MillerCoors, and Heineken still hold the majority of market share around the world, but their sales are beginning to slip due to competition from wine, hard liquor, and consumers’ rapidly growing preference for artisanal craft beers. Even in this declining market, there is one exception—MillerCoors’ Coors Light. This beer recently overtook Bud Light as the second-best selling beer in the U.S., and is the only top ten selling beer to post consistent growth in the past decade. This has contributed to sustained success for MillerCoors, which has seen revenues climb 4.3 percent in the past year to $2.2 billion.

What is the secret to the success of Coors Light? It’s not a change in the product, since the beer tastes the same and has been manufactured the same way as it has for decades. The success of Coors Light can be wrapped up in one word: cold. It’s the core message of the promotional campaign surrounding Coors Light; that it is the coldest, most refreshing beer in the market. According to CEO Andrew England, “We literally said, 'Okay, we're going to do nothing but focus around cold.’”

On one level, MillerCoors’ focus on cold is a bit silly, since any beer of any brand will only be as cold as the refrigerator in which it’s stored. Yet, the campaign has worked, as evidenced by the growing sales of Coors Light. According to Tom Pirko, president of the consulting firm Bevmark, the irrationality of the promotion is what makes it such a great marketing strategy. “What they have is this Pavlovian thing, where an image goes deep into your psyche," he says. "It's emotional, not intellectual.”

1. As you learned, the role of a promotional strategy is to communicate,the target audience,the firm’s competitive advantage. What is the competitive advantage transmitted by Coors Light’s promotional campaign? Is the company able to sustain that competitive advantage? Why or why not?

2.Coors Light is most likely in the maturity stage of its life cycle. You learned that promotion has four basic tasks. Which of these tasks is the company relying on? Justify your answer.

Answer 1

1. The role of a promotional strategy is to communicate, the target audience, the firm's competitive advantage. The competitive advantage transmitted by Coors Light's promotional campaign is the beer manufactured by Coors Light is that it is the coldest most refreshing beer. The company is not able to sustain its competitive advantage as it is not unique and can be easily copied by the competitors.

2. Company is relying on expanding the market share and creating a unique position in the market by attracting more number of customers. They are also going for penetrating deep into the market. The company has gone for increasing the revenue and market share by acquiring the small firm. Company is also focusing on creating a unique position in the market by attracting more number of customers.