The company is very aware of the environment and to reduce obesity in the USA. New Belgium Brewery fights these problems by creating events with special focus on these. Worth to mention is:
- Urban Harvest (focus on recycling)
- Clips of Faith (bike-in-cinema)
- Scavenger Dash (solving different tasks)
- Tour de Fat (bikerace against obesity)
- Trade your car for a bike (save the environment, drive a bicycle for a year)
To sum up; we will conclude, that they operate on both the B2B and B2C marked. The company sells their beer productions to distributors, who distributes to bars and supermarkets etc. and therefore operate on the B2B marked. This is also confirmed by their homepage, which tell us that they use 185 different distributors in 26 states. Furthermore they mention that all alcohol in the USA is sold through 3-tier systems that include a producer (NBB), a distributer and a retailer.
Discussing if the company operates on the B2C marked, our conclusion is that they do not directly operate on the B2C marked. However you could argue that they operate on both markets by looking on their marketing terms that highly approaches the end customers on the B2C marked. On this market they only operate by selling merchandises and accessories through a web-shop (no beers) and making events and activities with focus on company marketing.
Our final conclusion is that the company operates on both markets, as the company does not “only” distribute beer.
- On the basis of the above answer, discuss and come with recommendations to how the company can make their strategy more Relationship marketing oriented?
Before you attend to develop relationship marketing, it’s a good idea to divide your customers. A way to do that is to use the ABC-analysis, where New Belgium Brewing can locate their most important customers. The division of their customers will be based after the customer’s percentage of total gross margin for the company. By using this method, you divide the customers into 3 groups which are A, B and C customers where A customers represent the most important customers.
After the division of ABC customers, you get the picture of a Whale curve for cumulative profitability which usually reveals that 20 % of the customers generate between 150 % and 300 % of total profits. The middle 70 percent break even and the last 10 % of customers loose between 50 to 200 % of total profits. By doing this, NBB can see what customers need to be dealt with, so they can turn the least profitable customers, profitable again.
With help from the whale curve model the company is now able to place the customer in a customer’s profitability model which gives an overview of the customers. The model shows that some customer´s make more value to the new Belgium brewing than other.
This model shows what the cost-to-serve price is with the individual companies and whether or not they provide enough turnover to make it profitable. In addition to this, you can also localize your most profitable costumer and place them under the first 40 percentage.
When one has established which customers are most or least profitable for the company, one can proceed to the next phase. This phase is about either assigning benefits or taking necessary actions towards companies who are less profitable.
First, we want to deal with the less profitable part of customers. This is illustrated in the “whale curve model” in the section “transform or remove”. The most important thing about this group of customers is to address the company and discuss future partnership. Here, New Belgium Brewery, must honest explain the distributors in question about the situation concerning their part of the sales and present possible changes which are necessary for future partnership. If they not accept these changes, NBB will have to terminate the cooperation with these distributors.
An example of a solution for these customers can be to create a call-center which is to deal with these clients. This can reduce the expenses of these specific customers which eventually will make them more profitable. This could also create an advantage for these customers as the service will be faster and more automatic.
If you on the other hand are to look at the more profitable group, it is a new situation. The company needs to create a better relationship to these clients, by targeting them directly in their marketing.
At this point, we find it relevant to use ”the relationship spectrum”.
It is optimal for NBB to move their clients as far to the right of the model as possible. These companies which represents the majority of the distribution, needs to be moved as close to collaborative exchanges as possible to achieve the highest status with the clients and thereby ensure continuous sales.
It would be advantageous for NBB to keep their customers in between the two categories value-added exchanges and collaborative exchanges.
At this point it is an opportunity for NBB to add a key account manager to the most profitable customers to add extra value in their cooperation. These key account managers can create a variety of advantages for the clients as a reward for their status in NBB. It is the key account managers job to discover areas in their partnership where NBB can add extra value to the clients.
These key account managers could e.g. work together with the current rangers working in the different areas, to throw events for the companies concerned. This provides an opportunity to promote the clients in a way as until now has not been possible.
Case tekst – New Belgium Brewing B: Developing a Brand Personality, side 2, række 13
Business marketing management B2B, Chapter 4, Page 100, figure 4,3
Business marketing management, chapter 4, page 102, figure 4,4
Business marketing management, chapter 4, page 93, figure 4,1
