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G. HEILEMAN BREWING CO.
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Marketing problems associated with introduction of PowerMaster beer, aimed at African-Amer. consumers.... More...
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Paper Abstract:
Marketing problems associated with introduction of PowerMaster beer, aimed at African-Amer. consumers.

Paper Introduction:
G. Heileman Brewing Company faces the problem of being among the top five brewers in the United States, but having a market share which is well below the top three. At this point, companies in this segment can gain market share by drawing existing customers away from competing brands within the same product category, or by offering new products which bring new customers to the company's products, and possibly into the product as a whole. Thus companies introduced 'dry' and 'light' beers in order to appeal to consumers who did not otherwise drink beer, or who did not consume as much as the manufacturers desired. This was the attraction to introducing PowerMaster. Heileman already markets Colt 45, a malt liquor which contains significantly higher alcohol per volume than traditional beer. Howev

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Heileman introduced PowerMaster in order to gain market share andattract customers to its brand. However, Heileman perceived a market fora beer-like product which had an even higher alcohol content, and thuscreated PowerMaster as a way to gain market share. Brewers are not the only company facing this problem. Heileman is now in a defensive position with regard to PowerMaster inlarge part because it engaged in niche marketing, a strategy whichsuccessful companies often use. Companies musttherefore determine how they can engage in niche marketing withoutappearing to be exploiting the market segment they are targeting. But because the campaign targeted African-Americancommunities, the public perceived that the company was exploiting thatcommunity with a product that has significant deleterious effects. Because of this, when marketing goods and services of questionablereputation, companies should avoid niche marketing by ethnicity (orreligion or other politically sensitive groupings) and focus on location(making sure that targeting a specific region does not result in targetinga particular ethnicity) or other segmentation characteristic. Heileman and its PowerMaster product demonstrates that companiescan no longer market their goods without regard to the politicalenvironment. Thus companies introduced 'dry' and 'light' beers in order toappeal to consumers who did not otherwise drink beer, or who did notconsume as much as the manufacturers desired. If thecompany had developed marketing campaigns which targeted all races, itwould be difficult for the African-American community to take umbrage atthe product. These arguments aside, Heileman must conduct business in anenvironment which is highly political, and must recognize that marketing toa specific market segment can prove problematic. Had Heileman introduced PowerMaster with a broader campaign whichtargeted a more general audience, it might have encountered less consumerresistance and protest. It could certainly be arguedthat wine merchants and purveyors of hard liquor are harming the African-American community more than Heileman since these products contain far morealcohol per serving than even PowerMaster. G. It is possible that consumers will simplyswitch from Heileman's current malt liquor offering (Colt 45) toPowerMaster, but the company may also draw customers from other malt liquorand "fortified" beer products. An argument could be made that theactivists are simply over-aggressive and over-sensitive, and that membersof the African-American community are able to make choices concerning theiralcohol consumption without interference. Heileman Brewing Company faces the problem of being among the topfive brewers in the United States, but having a market share which is wellbelow the top three. It should be noted that PowerMastercontains less alcohol than a serving of wine, and considerably less alcoholthan a serving of "hard" liquor. It is the position of the activists that PowerMaster will harmcommunity members, and will do so without causing similar harm to othercommunities because Heileman chooses not to market to those communities.From this standpoint, the activists are acting in a protective manner forthe African-American community. Although Heileman had legitimate business and marketing reasons forintroducing PowerMaster, the company did not anticipate the large publicoutcry at the product's introduction. By targeting product information andmarket support to an audience which has demonstrated a particular affinityfor this type of product, the company was selling to consumers which aremost likely to be interested in the product in question. Even better, companies such as Heileman can focus on a broad marketingstrategy which does not target a specific group at all, but which insteadserves to build demand for the product in general. To avoid the appearance of impropriety, companies such as Heileman areadvised to refine the niche marketing process and determine whether theniche marketing strategy serves their corporate "citizenship" goals. G. Part of the reaction was no doubt spurred by the fact that theadvertising campaign, although developed by an agency owned and operated byAfrican-Americans, featured African-Americans in the visuals. Tobaccocompanies, and cigarette manufacturers in particular, also have the problemof marketing goods which are perceived as harmful by the public and whichare subject not only to regulation, but to strong campaigns by publicinterest groups against the companies in question. This could leadobservers to conclude that Heileman was taking unfair advantage of thelegal environment in order to capture additional market share, and that themarket share it sought to capture was a particularly vulnerable minority. It isone thing to market products to a specific community when a need exists inthat community for the product; it is another to market a product with aquestionable public reputation to a specific ethnic community and appear tobe creating demand for that good. The public was also moved to action by the nature of the productitself. Heileman alreadymarkets Colt 45, a malt liquor which contains significantly higher alcoholper volume than traditional beer. Even though the African-American community has, on the whole, embraced malt liquor to a greaterdegree than other market segments, it is not clear that the preference isnot due to the marketing tactics in which companies have engaged in thepast. This was the attraction to introducing PowerMaster. It is inthe company's best interest to increase demand wherever possible, and tomarket its products to the various market segments where it is likely toreceive the greatest return on its investment. Activists, on the other hand, are concerned that the relatively lowcost of malt liquor and the fact that Heileman is targeting the African-American community in particular will result in an erosion of thatcommunity. Although true regardless of the product in question, thisbecomes even more important when the product has negative characteristicssuch as tobacco or alcohol. The main focus of the reaction to PowerMaster is that African-Americans do not need to drink beverages which contain increased alcohol,and the product was perceived as exploiting the community rather thancontributing to it. Unfortunately forHeileman, the product in question also carried with it politicalcharacteristics which Heileman did not anticipate. While many consumers realize that malt liquor contains more alcohol thanbeer, Heileman went to considerable lengths to emphasize the high alcoholcontent of PowerMaster both in the name and on the label. Certainly marketresearch indicated that consumers of Colt 45 might well be drawn to theincreased alcohol of PowerMaster. At this point, companies in this segment can gainmarket share by drawing existing customers away from competing brandswithin the same product category, or by offering new products which bringnew customers to the company's products, and possibly into the product as awhole. The company obviously hasaccepted this as its mission and seeks to maximize its profits by providingproducts to consumers which meet their demand for such beverages. Many beer drinks select beer as their beverage of choice becauseit contains relatively less alcohol than other available "adult" beverages. What is not clear is whether the position the activists take isactually protective or patronizing. The activists who take exception to Heileman's marketing strategy andthe company itself must come to terms with the fact that the companydevelops and markets alcoholic beverages. Although this is lesseffective from a purely marketing standpoint since the message reaches manymore people who are not interested in the product, it avoids the politicalproblems that might otherwise arise. The public's reaction was driven by the fact that the promotion forthe product targeted the African-American community and the product itself,with its increased alcohol content, was perceived to be damaging to thatcommunity.

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