The Business of Brewing II March 12, 2018 Rick Cox

Marketing The activities that are involved in making people aware of a company’s products, making sure that the products are available to be bought, etc. (Merriam-Webster Dictionary)

Benchmarking Something that can be used as a way to judge the quality or level of other, similar things (Merriam-Webster Dictionary) Keeping score Knowing where you are in the market Ranking Tracking yourself and competitors on goals

Benchmarking (cont) Benchmarking is not only used for sales, but also for outputs and inputs Just like in life, make small, attainable goals/benchmarks in order to see success in your endeavors

The 4 P’s Price Be competitive in pricing in the market Pricing should be based on cost of materials plus labor Remember you are not trying to get rich on one bottle/6-pack/pint/keg

The 4 P’s Product Use of quality raw materials Differentiation is key Know your product How is it set apart from others? What makes your beer/brewery different from others? How is it similar? This helps keeps you honest in the marketplace

The 4 P’s Promotion Use of newspaper/periodicals Use of radio Targets some key demographics/age groups More expensive Sometimes less productive Discuss pros and cons Use of radio Much like newspaper Use of social media Very inexpensive Little to no control of what is said Word of mouth

The 4 P’s Placement Marketplace is concerned with profit per square foot End caps, displays and “action alleys” are best placement

Branding Creating who you are in the market With all of the craft beer brands out there, unfortunately, the beer in the bottle will not sell itself. Created with the combined creative energies of brewers, graphic artists and copywriters. Ex: Oscar Blues Brewery; river sports and bicycling. Sierra Nevada; mountain sports, hiking. Budweiser; self proclaimed “king of beers”.

Branding (cont) You must think about what it all means for who you want to be in your market You must think about what it will mean to your patrons and consumers You are your brand Every decision you make reflects on your brand

Make your brand worth remarking about BE REMARKABLE! Make your brand worth remarking about

Know your target audience Are you looking to sell to Millennials? Is your target market “lawn mower beer” drinkers? Do you want to promote craft beer to middle aged adults looking for something different?

DO YOUR REASEARCH No matter your target market, know them better than they know themselves.

Research There are multiple sources of information: Internet Google Analytics Census Bureau Local Chambers of Commerce Surveys Free and paid

Remember A.I.D.A. Attention Interest Desire Action Draw positive attention to your brand Even negative attention can be a good thing if spun the right way Interest Make people interested to see what you have going on at your brewery Desire Create a desire for your product, i.e. brew different styles Action Create a call to action, support a cause that means a lot to you and the community as a whole

Functions of a Brewery Everyone plays a part

Management function Management plays a vital role in the brewery. Not only do they make difficult decisions, pay bills and order materials, they also take care of other vital roles. Parts of the Management function Sales Sales management, delivery personnel, bartenders, etc. Promotion Encompasses everyone in the brewery, but mainly those in direct contact with the public and retail outlets Advertising P.O.S. (point of sale) materials, social media management, apparel, etc.

Operational Management Activities Set performance objectives Set productivity expectations Setting operational strategies Design of products and services Planning and controlling Improvement of operations over time Corporate social responsibility

3 core functions of business Marketing Product and service development Operations function

3 support functions of business Accounting and Finance Human resources IT functions

KEEP IN MIND… In most startup businesses, breweries included, the owner usually takes care of all of these functions themselves until more persons are able to be added to the payroll

Outputs Include the following: Products Services Raw materials Kegs Bottles Cans Etc. Services Point of Sales (P.O.S.) materials, etc.

Inputs Information General Legal Recipes Etc. Customers

Characteristics of an operation Volume – How much product is produced Variety – What type products are produced Variation of Demand – Seasonal demands Degree of visibility of product – How many locations (or packaging) is the product available in

Questions??