Product Case Study : Carlsberg Ice Beer

University Degree Business and Administrative studies

Product Case Study : Carlsberg Ice Beer

Background on Carlsberg Ice Beer:

The development of Ice Beer was done by the Canadian Labott Brewery in 1993, this was done by freezing the brew during its production. The crystals were removed making it, according to them, a “uniquely balanced smooth tasting beer”, called Ice Beer.

Two companies named Tetley and Carlsberg formed a partnership in 1993-94 for complementary reasons and became Carlsberg/Tetley Brewing Ltd ; Tetley having great strengths in ale, and Carlsberg having a great reputation in the UK and owning many breweries worldwide.

Carlsberg has long been know as “the custodian of traditional, quality, lager beer values”, but it was now time for something new…

Problem Statement:

Carlsberg needs something new, something rejuvenating and something that will help them compete with Bass and Courage now that Carlsberg has a joined venture with Tetley. Should Carlsberg take this opportunity of bringing out a new type of Ice Beer, or will this harm their image of having good quality lager beer? And will this product be a long lasting one or is it merely a passing fad? The formulation of the real product, the sales force, production facilities and marketing knowledge, all basic requirements were readily available. Should the company take advantage of this opportunity, or let the competition preempt this market segment?

Establishing a lasting product:

In order to make Carlsberg Ice Beer a long lasting product the following has to be thought about:

How to create a valid product with recognizable benefits, taste, appearance etc…
Explain the above and convince consumers through advertising and the use of Public Relations program.
Create appealing packaging, communicating product message
Deliver message to the right target audience
Ensure distribution in medium to upscale drinking “on trade” and higher level off trade outlets.

If the above marketing mix is ensured a lasting product category could be ...

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Establishing a lasting product:

In order to make Carlsberg Ice Beer a long lasting product the following has to be thought about:

How to create a valid product with recognizable benefits, taste, appearance etc…
Explain the above and convince consumers through advertising and the use of Public Relations program.
Create appealing packaging, communicating product message
Deliver message to the right target audience
Ensure distribution in medium to upscale drinking “on trade” and higher level off trade outlets.

If the above marketing mix is ensured a lasting product category could be built with Carlsberg as be category leader.

The product’s potential life cycle:

To see whether the product has a long life cycle the following has to be considered before it will be too late.

Restudy and adjust the target group appeal
Test and evaluate advertising alternatives to determine effectiveness- (TV, bill board, radio etc.)
Determine impact of various promotion approaches
PR campaign’s impact.
Geographic comparison of volume/ program relations

Market research

Total Beer market:

Insufficient information for market understanding
Lack of market breakdown by : type of products, price points by brand, volume by price point.
No industry spending by type of media (TV, print, radio, poster etc). Exhibit 15,2 only shows Premium packed lager “Carlsberg special brew” in on trade (80% of market) 5%, + in off trade” (20 % of market) 8%- what about the rest of Carlsberg size15.1 is minimum calc, if true, total 1%, total market 100%

The premium packaged lager: a) want more quality b) distinctiveness at least 5% ABV good target group for Ice beer.

Lack of distribution data

All the above is needed in order to improve the complement the market research already done.

Consumer Research

The research already performed can be considered good except for a couple of points:

Failed to bring out a conclusion on how to better define the product attribute communication of Ice beer.
Purchase interest by price point, consumer interest in “draught ice beer” versus packaged, possible name alternatives, brand interest under Tetley.
Distribution must be built fast.
Ignored female interest level in ice beer.
Target groups definition:

The “good time boys” and “good time men” definition is restricting their target audience. If they want to keep these terms and use them as their target groups, they need to be clearer and less stereotypical. There was also no indication on volume of beer consumed by these groups.

UK- Beer consumption behavior:

There is only a limited amount of data in order to establish this. Even though women are probably not a major part of the beer drinkers, they could form an important factor. There was no indication of them being researched on at all. Beer is a significant beverage for the average male consumer in all psychological and “self expression” categories. Since 80% of drinking it is ‘on trade’, it is clearly a social involvement.

Competitive factors to be considered:

Quality- of taste, packaging, image, promise, Product- draught versus packaged Ice beer
Distribution development in 1) on trade, 2) off trade by type of product.
Advertisement spending, campaign strength, message copy positioning – type of advertisement
Promotion effort/ spending by trade channel, trade deals, allowances, bonus
Sales force strength- direct sales force versus wholesales and third parties
Target user/ drinker and sales outlet selection
Determine groups and opportunities for competitive advantage.
Number of brands entering the market.
Examine Labatts and Carlsberg joining forces to have upper hand on competition.
Consider Tetley bringing out their own brand of ice beer (all three brands being in the same hand to determine+ guide key issues of differentiation.)

Overall thought on Carlsberg’s decision to launch Ice Beer:

Participation in a new modern market category.
Modern, new product should bring new younger users to the Carlsberg brand even if they are Carlsberg lager drinkers.
Superior product invention, formula (with minor changes) available from Labatt- partner firm.
Distribution channels, sales force capacity is available
Opportunity to modernize Carlsberg’s image
Carlsberg credential, historical stability provides product guarantee to ice beer.
This should be an opportunity to attract younger woman for the brand.
Advertising spending on Carlsberg Ice beer will raise share of voice in all to benefit the Carlsberg brand name.
Cross promotion opportunity for Ice Berg with normal Carlsberg / Tetley brands.