Blue Moon Beer Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Blue Moon Beer Case Study Help

Competitors Rivalry:The competitive rivalry ion the beer industry in China is considered to be low to moderate. One of the main reasons behind the low rivalry is that the beer market of china is composed of a few dominating players. The customers are also considered to be loyal that lower the rivalry among the competitors. In addition to this, the beer industry seems to be attractive and due to the high growth rate and government support, it encourages new players to enter the market and make the intense rivalry among the competitors. Furthermore, the high quality, strong brand image and customer loyalty lower the rivalry among the competitors (Officials, 2020).

Target Customers and Segments

In order to launch Blue Moon beer in Beijing, China, the following customer segments can be targeted.

Millennial:The millennial segment appears to be a significant growth driver for the craft beer industry as they need beers for socializing and parties. This segment prefers innovative experiences, social gatherings, attending events and parties with their beloved craft beer as most people don’t go out and buy craft beer to drink at home.
People with High Income: The professional segment with above-average income will be targeted as these prefer high quality and sophisticated beers and wines. On the other hand, the professionals residing in the top tier cities of China such as Beijing and Shanghai will be targeted as these cities are the first-tier cities in terms of GDP and has higher employment rate and industries which indicates that the disposal income of the population residing in Beijing will be high as compared to other markets in China.
Tourists:The foreign tourists visiting Beijing for business purposes will be targeted as they will be looking for high-quality beers with foreign like the taste. Moreover, as it is expected that Beijing is likely to receive 4 million foreign tourists by the next year, it is evident that the demand for craft beers will increase.

Target Market

The top tier cities such as Beijing and Shanghai will be targeted as these are the business centers of China, has a high employment rate and population which indicates that the disposal income of people will be high and the number of business professionals will be high. Moreover, markets such as Hong Kong, Macau, Vietnam and Taiwan will be targeted during the full moonmid-autumn festival season as various celebration events are held in these countries. (WikiPedia, 2020)

Marketing Mix

In order to launch the beer in the market, the following marketing mix strategy will be employed.

Product:High-Quality beer with sophisticated taste in a glass bottle will be offered to the customers. Moreover, the size of the beer bottle will be 500 milliliters (ml) and the packaging of the beer will comprise a triangular brown glass bottle with a printed graphic label containing the blue moon logo. The blue moon logo will help the business in creating a distinctive identity and will remind the Chinese people, the sacred festival of the blue moon.

Price:The bottle will be priced at $8 euros per liter in bars on average which will be consumed by high-income consumers and millennials in the one-tier and two-tier cities of China. The price is based on the average price of $12.6 euro per liter in bars offered by the leisure beers businesses. The price is set below the average price of $12 as Blue Moon Beer is a newly launched beer and customers will not buy the beer if prices are set too high in the beginning. (Flanders Investment and Trade, n.d.)

Place:The product will be offered in the one-tier and two-tier cities of China which includes Beijing and Shanghai, Moreover, Hong Kong, Macau, Vietnam and Taiwan will also be targeted during the mid-autumn festival season as the demand of the beer in this season will be high. The product will be reached to the customers through collaboration with event organizers for festivals, airports to facilitate foreign tourists, bars, high-end restaurants to facilitate high-income customer segments and local restaurants as millennial prefer spending time in local restaurants and public places.

Promotion:The product will be marketed through social media consider, the internet penetration in China was 57% in 2019 (Statista, 2020). Moreover, the beef will be marketed through celebrity endorsements, sponsoring local sports teams and collaborating with event organizations by providing them free samples to offer in the events.

Entry Strategy

The brand will enter the target markets in the mid-autumn festival season and will use wide distribution channels i.e. selling the product to the market through intermediaries such as event organizers and restaurants. The bottle will be offered at a price of $8 euros per liters and a quantity of 68500 bottles will be manufactured and distributed among the target markets and customers assuming, the business will target 5% of the total population of china which is $1.37 billion. (World Bank, 2020)

Budget and Profitability Forecast

The total budget required to enter the market amounts to 266369 euros assuming 165 million euros will be required for the production of craft beer bottles, fixed cost amounting to 41374 euros will be incurred and marketing cost will amount to 57924. However, the business will also require investments for purchasing the license to operate the business in Beijing and registration the brand for which a cost of $1575 has been assumed considering, the legal fees to register a craft beer business in the USA is $1500. (See Appendix 1).

On the other hand, the profits for the next four years have been forecasted using the annual growth rate of 2.3% as it is expected that the demand for raft beers will grow by 2.3%. Moreover, various general assumptions have been used in forecasting the profits which include that the variable cost will be 40% of the revenue, fixed cost will be 15% of the revenue and marketing cost will be 14% of the year as it the craft beer industry incurs 13-14% marketing cost annually. (Please see Appendix 2)

Evaluation of the Proposed Entry

The proposed marketing and entry strategy appears to be feasible and viable considering the fact that the demand for craft beers will be high in the mid-autumn festival season. Moreover, the proposed entry option requires a low estimated budget and provides adequate forecasted returns and profits. Moreover, the strategy to use wide distribution channels offered by intermediaries such as event organizers, local and high-end restaurants and airports will benefit the business in terms of increased customer reach and ease of customer access resulting in increased sales. On the other hand, offering high-quality beers with sophisticated taste at below-average prices will aid the business in attracting price-conscious and young customers as luxury and craft beers costs on average 12 euros.

Moreover, entering one tier and two-tier cities have aided the business in targeting ideal customer segments as these cities have a larger population of people with high income. On the other hand, entering the markets at the time of mid-autumn festival season will aid the business in increased customer awareness and sales as the expatriates will be returning to their home country, therefore, the airports will also be filled with increased number of people resulting in increased sales of the beer as it is one of the distribution channels for the organization................................

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