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Advertising values THE RANT: A classic Molson Canadian beer commercial from March 2000. How to achieve greater national brand recognition with the next campaign?

Posted in Advertising National Values with tags , , , , , , , , on février 22, 2009 by mmmotta

With the big competition, beer advertising had to raise awareness quickly and give beer drinkers a reason to break their purchasing habits. With the Rant campaign Molson was on top of the market but how to achieve greater national brand recognition with the next campaign? Which plan for positioning, brand identity, advertising development, and sales promotion should Molson made to keep the number one position? 

IACCase

Molson was founded in Montreal Quebec in 1976, it was the older beer brand in North America and it was one of the two leading breweries in Canada with Labatt beer Company. Campaigns had lifted Molson Canadian into the number one brand position in Canada. However since 1989, the Canadian had lost a share of the market allowing Labatt Company to be on the top for 2 points.  It was in decline and a way had to be found to re-ignite Canadian with entry level drinkers. The ‘I AM’ campaign was launched from 1994-96, exceeding all marketing objectives. But the next campaign from 1997-99 call “The Monkeys” was not that good. In 2000, a new strategic marketing group consolidated a new brand portfolio and with the help of regional marketing teams they guided national programs and capitalized local knowledge and relationships.

During the same year in March 26, when they were still going through critical times because of the gaining share of his biggest competitor Labatt, they launched “The Rant”, a popular commercial that featured Joe, a Canadian who is proud of his culture and who compare it with the American culture. It was launched at the cinema, in internet, having sports sponsorship and finally in Television. After the rant advertising campaign, Canadian’s market share increases two points.  Each year, together Molson and Labatt spent an estimated 400 million on advertising and promotion to gain and defend their market positions.

Company Analysis

Goals:  To maintain its leadership position in the Canadian market. The marketing team needs to find the theme for the next advertising campaign for Molson’s flagship brand and Canada’s best selling beer: Canadian. The plan is for positioning, for brand identity, for advertising development, and for sales promotion.

Focus: Looking for ways to connect with young male beer drinkers from 19 to 24 years old.  At the beginning Molson strategy was to focus on existing markets, expanding the Molson brand to new markets and positioning Molson as a participant in the international brewing industry. In 2000 the Molson Company was divided into two divisions: brewing and sports and entertainment. Nowadays Molson wants to keep this strategy but it want to develop greater advertising to join its target and to attract new customers to the brand.

Culture: Molson is the biggest Canadian beer brand.  Brands like Molson Canadian are always looking for ways to connect with young male beer drinkers 19-24 having massive promotional activities covering almost every possible advertising category. They wanted to explore the Canadian patriotism and they wanted to represent it through their promotions. “An honest brew makes its own friends”

Strengths

– In reality, they just have one big competitor to fight with. (Labatt)

– They have a rich heritage to exploit because they are the only big Canadian beer brewer.

– Within the 19-to-24-year-old market, sport fans consumed twice as much as beer as non-sport fans.

– Target does not prefer any particular brand; therefore they have the opportunity to keep their brand name Molson in the consumer minds.

Weaknesses

– Significant loss of long-term market share.

– Beer consumption deceased after the age of 24 as people drank less, or switched to other alcoholic drinks thus the target is limited.

– The range of promotional activities used by the breweries is enormous. Huge Expenses in advertising will increase sales?

  • – A past failure campaign (Monkeys) 1997-1999

Market share: The Canadian market is a virtual duopoly where the players are:  Molson (45%) and Labatt (45%) with 90% of the market share. The remaining 10% is controlled by regional brewers, import beers, and microbreweries.

Customer Analysis

Researchers by Molson showed that “Canadian” was the number two brand that young Canadian adults were most proud of, ahead from the number three Labatt which was not Canadian at all. Their target was the population through Canada in between 19-to-24-year-old. In addition, Molson discovered that since 1994 young adults in Canada had become more sophisticated in what they were trying to achieve. They also discovered that more than 75% of young adults in English Canada believed that Canada was better than United States.

Competitors Analysis

Labatt: It was founded in 1847 in London Ontario but it was sold in 1996 to an international brewer call Interbrew. Labatt has approximately 45% of the total Canadian market. It controlled 60 regional and national brands that covered almost every segment of the beer market

Sleeman Brewers: It was founded in 1834 in Ontario. It is the number three brewer in Canada. By 2000 it operated five breweries across Canada producing and distributing the core Sleeman brand. It was the alternative to the larger national brands. . They did not compete directly with the large players.

Breweries:  by 1999 there were 75 breweries in Canada, 24 of those were conventional breweries with sales greater than 60.000 and mass retail distribution. The rest 52 microbreweries were having sales of less than 60.000 and distribution mainly through on-site retail outlets.

Imports: The amount of imported beer as a percentage of total beer sales increases 4.3 % between 1993 and 1996. Since date, it has been growing more than 10% per year.

Macro-environmental Analysis

  • – In Canada each province set its own legislation for the brewing, selling and transporting of beer and alcohol, consequently it difficult the national market.
  • – Government regulations on beer advertising are very strict.
  • – The legal drinking age in Canada is 19.
  • – With increasing competition from other alcoholics beverages beer sales are flat in Canada since 1989.
  • – Ontario and Quebec make up over 60% of the total market and the sales by province have remained the same for the last 10 years.

Conclusion and recommendations

Feeling that their campaign I’m Canadian was initially a strong campaign the Marketing team new they should continue in the same line, making Canadians proud of what they are. Indeed, they just change: I’m Canadian, for we are Canadian. After many cultural researches they decided to evolve into the same line but trying to give to his target what they want it. They don’t want individualism, they want union. The team relate the beer-drinking experience to the Canadian attributes that they perceived.

Although the Rant campaign was an excellent strategy and opportunity to return to the top market beer, the Canadian beer market is always facing increased competition. Molson Canadian cannot be stuck sharing its market all the time. The new ad campaign to be implanted most use humour and the perception that costumers have about the brand. They most focus on the brand’s taste and quality and they most still profiting his advantages of being the only Canadian beer big company.

The advertising strategy the used was smart. They follow the inclination that beer advertising is a mirror of the society but they just identified the right trend: Sports + nationalism. They mix a well planned promotion and sponsorship to keep the brand name in the mind of the consumers.

Also heir market researches were very useful:

  • – The fact of consolidate a new brand portfolio for their 2000 campaign
  • – The fact of being in a tie bond with the regional marketing teams that guided national programs and capitalized local knowledge and relationships.
  • – The pre-tested advertising.
  • – The great idea of invest in many different promotional and sponsorship activities to support the media advertising campaigns.

Molson could maintain the momentum of the Rant for a while but not for ever if they want to uphold their leadership position and if they eventually want to attract new customers to the brand. They should be researching and evolving according to his target cultural changes and preferences to keep up advertising fresh and interesting. They should not move into the traditional beer advertising (people socializing) but they should not maintain the non-traditional theme they had in its last campaign (emotional and positive Ad). What they have to do is to continue their researches and to make their brand advertising to evolve with every national trend. They can always to please their target by combining the traditional and non-traditional advertising for beer focusing on the brand’s taste and quality.

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Toyota Motors and its strategy of resources and environment

Posted in Resources and Environment Strategy with tags , , , , , , , , on février 22, 2009 by mmmotta

                       When Toyota Motors introduced the Prius hybrid car at the end of 1998, it concentrated on two key concepts, “resources and environment”, to raise its global market share. They expected to produce 1000 units per month for the first three annual cycles. This was a very ambitious target considering they had experienced technical problems with their hybrid power train. As the new company president, Okuda felt this car was an opportunity to change the company’s image. However, he knew there were several problems that needed to be resolved: how to maintain Toyota’s remarkable market position in the 21st century, and how to grow overseas and be known as a value brand in the existing competitive automaker world? The first challenge was to change Toyota’s corporate culture into a young aggressive company; second, to penetrate new markets; and third, to align company values with growing environmental concerns. To do this, they required a complete company makeover to fix problems such as weak product planning, declining domestic market shares, and delays in shifting production overseas. For example, Toyota had to increase spending on dealers` incentives and advertising, especially in developing countries, which were considered to have a huge potential for increasing product demand. In order to achieve these goals, Toyota required new product designs, production configurations and marketing strategies.

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Company Analysis

Goals:  To conceive the car for the 21st century to survive in the competitive automaker market and achieve greater brand recognition overseas.

Focus: Resources and environment as a market positioning.

Culture: Toyota used to have a conservative corporate culture. They were perceived as being followers rather trend setters.

Strengths: Known for its prowess in marketing and sales as well as its production efficiency, as well as having the lowest number of problems per 100 vehicles. They also have good internal communication amongst employees and a long-standing concern with environmental issues.

Weaknesses: Toyota had not aggressively shifted production overseas as their competitors had.

Market share: Its annual domestic unit sales reached one million in 1962. Its exports reached a cumulative total of 10 million vehicles in 1979. In 1994, they surpassed a 7% market share in North America, higher than any other automaker.

Customer Analysis: Cars offered aspirational value in addition to a basic mode of transportation. Consumers made purchasing decisions based on the style, color, and concepts in addition to functions and pricing.

Competitor Analysis: Competition in the industry was largely regional with manufacturers developing appropriate designs for market share demands in their regions. Car companies commonly imitate each other’s products, ideas and innovations, but this did not provide long-term advantages. USA was the largest national market with General Motors, Ford and Chrysler respectively. GM was the world’s largest producer in 1994. Its strategy was to offer a full array of models, but it had concentrated on mid and full sized cars. They also built a small car named “Saturn” but the company was less efficient in product development. Ford was second to GM in vehicles sales and revenues but it had difficulty in unifying U.S and European operations. Chrysler was good in domestic markets but its image regarding quality was poor. In Europe, Volkswagen was the largest automobile manufacturer, whereas in Japan, Nissan was the second largest automaker but it had weak marketing. Honda was the third largest automaker and the world’s largest manufacturer of motorcycles.

 

Macro-Environmental Analysis

The total number of motor vehicles in use worldwide was 644 million units. Automobile sales were cyclical, falling during economic downturns and rising during the periods of strong economic performance. Automobiles were subject to many governmental regulations because of public concerns over safety, traffic congestion, air pollution, and fuel scarcity. Governments had implemented many regulations to avoid these problems and also to encouraged manufacturers to improve their fuel efficiency. On the social and cultural front, public concern over emissions of dangerous gases that were destroying the ozone layer caused world leaders to discuss about climate changes

 

Conclusion

Although the Prius hybrid car was an opportunity to change the company’s image, Toyota was going to have to work hard to reach their long-term goals and maintain their sales and revenues up with market standards. They were correct in focusing their plan on two key concepts, “resources and environment”. The first concept helped focus company finances and restructuring strategies. The second concept helped Toyota renew its image, meet consumer trends and government policies, but their ambitious production target was a daunting challenge considering the technical problems they had experienced with the hybrid power train. It was a huge risk to trust a car that was not even technologically ready and that was supposed to be the new image of Toyota. To maintain a remarkable position in the 21st century market, Toyota had to transform its company image into a young aggressive company. With a complete company makeover they started to solve their problems planning promotional strategies around the world, increasing domestic market share, approaching young people and new costumers, as well as developing overseas production to avoid delays. Toyota increased heavy advertising expenditures in order to grow overseas, reach new global markets, and be known as a value brand in the existing competitive automakers world.


Okuda had been president of Toyota Motor Corporation for only two months.