Crafty Business - Big Beer May Soon Buy Up Your Favorite Craft Brewery

The craft beer industry has experienced explosive growth in the last 10 years. According to the Brewers Association, craft beer has gone from a 5.9% dollar sales share of the U.S. market in 2006 to a 24.84% dollar sales share in 2016. This growth hasn’t gone unnoticed by the giant “megabreweries”, which have seen sales of their beers flatten or even decrease in recent years. This rise in craft beer consumption has led to a number of major industry shakeups such as the merging of Anheuser-Busch and Belgian beer giant InBev back in 2008, as well as AB InBev’s subsequent purchase of SABMiller in 2016.

Recently the big breweries’ strategy has been to simply buy up popular craft brewers. For instance, AB InBev has now acquired 10 craft beer brands including Goose Island and Blue Point; while Constellation Brands, the makers of Corona, bought San Diego craft brewer Ballast Point in late 2015, and MillerCoors purchased a majority ownership stake of the Terrapin Beer Company in July of 2016. 

This trend has been met with backlash by many craft beer enthusiasts and industry members alike. For example, after North Carolina craft brewer Wicked Weed announced its sale to AB InBev in May of 2017, it drew harsh criticism from numerous customers and was subsequently stripped of its voting rights in the NC Brewer’s Guild. The issue has drawn attention once again as popular South Florida craft brewer Funky Buddha was purchased by Constellation Brands on August 10th of 2017. 

Where do you come down on the issue? Do you think this recent trend in the industry is a good thing? Will it change your view of your favorite craft brewer if they were bought up by the “big guys”? Please share your thoughts in the comments section below.

John Gironda, Ph.D., is an Associate Professor of Marketing in the Huizenga College of Business and Entrepreneurship, Nova Southeastern University. He can be reached at jgironda@nova.edu

Experiential Retailing: Can it Help Offline Stores?

The growth of online shopping has led many traditional brick-and-mortar retailers to create and emphasize unique in-store shopping activities and experiences as a way to compete with online retailers. This is known as experiential retailing, and the idea behind this trend is that the one thing online retailers can’t offer is the in-store experience. Therefore, if offline stores can develop truly interesting, entertaining, and/or one-of-a-kind shopping activities/experiences, that would be one way to effectively compete.

There are a number of examples of companies engaging in experiential retailing. For instance, Bass Pro Shops Outdoor World superstores feature a number of attractions that make each store a unique destination, such as indoor waterfalls, gigantic aquariums, archery ranges, and ponds with fish native to the store’s area. In addition, the stores hold a number of demonstrations and workshops that teach customers a variety of skills related to outdoor activities, including camping, hiking, fishing, and water safety. Another outdoor recreation company, REI offers climbing walls at some of its stores, for patrons to try out and practice their rock climbing skills. In addition, Dick’s Sporting Goods offers a golf simulator for shoppers to try out any of their golf clubs on a number of virtual holes before purchasing them. On the simulator, the customer hits an actual golf ball and then a large projection screen shows the flight of the ball through the air, as well as where it lands. In addition to displaying this, the simulator also provides a number of useful metrics, such as ball distance, speed, launch angle, and spin, to further help customers decide if the club they’re using is the right one for them. 

Sporting goods and outdoor oriented stores aren’t the only ones engaging in experiential retailing. Many other brick-and-mortar retailers are starting to use technology to create a personalized shopping experience for customers. For example, many companies such as Target offer mobile apps that allow shoppers to see if an item is available at a particular store, and if so tell them the exact location of that item within that store. In addition, other retailers including Timberland, are beginning to employ the use of augmented reality systems in their offline stores, to allow customers to virtually try on clothing and accessories, as well as instantly mix and match various combinations of shirts, pants, shoes, etc. www.youtube.com/watch?v=5TZmQPdhpak.  Neiman Marcus has also developed the “Memory Mirror” shopping assistant, which allows shoppers trying on various items to view them on a large video screen from any angle, as well as instantly change an items color, or see the way different outfits look in side-by-side comparisons: www.youtube.com/watch?v=B97k394jetk

Since many of these retailers’ items can be purchased online, companies are hoping that by offering these extra experiences, it will encourage consumers to go and shop at their physical stores. Obviously online shopping is here to stay and will most likely continue to keep growing well into the future. However, experiential retailing does show promise in helping offline retailers to still have a relevant place in consumers’ shopping habits.

What do you think of experiential retailing? Do you think it’s a viable technique for allowing offline stores to better compete with online shopping? Are there any other examples of experiential retailing that you’ve recently seen in action? Please share your thoughts in the comments section below.

Image source: Tim Nichols (2014) – “Experiential Marketing on The High Street” (ExactDrive™).

John Gironda, Ph.D., is an Assistant Professor of Marketing in the H. Wayne Huizenga College of Business and Entrepreneurship at Nova Southeastern University. His teaching and research interests include digital and social media marketing, consumer behavior, marketing strategy, advertising, personal selling, and sales management. He can be reached at: jgironda@nova.edu

Repositioning: The Wheels of Marketing in Action

A very important topic in marketing today is that of Repositioning, sometimes also referred to as Brand Repositioning. The main objective is to basically pump new life into a declining/mature brand by attempting to change preconceived opinions and carve out a new distinctive space in the minds of its target market(s).  I find the practice of repositioning extremely interesting because as an observer (whether consumer or professional analyst) you can really see the wheels of marketing/branding in action. You can see firms trying to steer the ship in another direction so to speak, as they try to boost up an older brand and/or change its current image.

Taking a look at today’s marketing environment we can see that a number of brands have or are currently trying to reposition themselves. For instance, a few recent examples of brands who have attempted to reposition themselves that come to mind are Buick, Domino’s Pizza, and Cadillac. In the case of Buick and Cadillac, those brands are attempting to reposition themselves to seem more current, stylish, and hipper in order to appeal to younger consumers. A very good example of this repositioning at work is Buick’s commercial showing consumers’ surprised reactions to its newly redesigned vehicles: http://www.ispot.tv/ad/7UbT/buick-summer-sell-down-unexpected. Additionally, as a further effort to enhance their images, both Buick and Cadillac are even adding built in Wi-Fi to many of their new cars, which turns the vehicles into a hotspot with 4G LTE Internet connection speeds.

Regarding Domino’s, while still not considered gourmet pizza by any stretch, the company was able to turn around its lagging image and sales by initiating a new commitment and focus on quality. The company also completely overhauled its pizza recipe, from dough to sauce to toppings. In addition, the brand launched a creative advertising campaign, which included the “Pizza Turnaround” documentary-style commercial, in order to spread the word to consumers about the changes it was making. Together these initiatives helped to reposition the brand’s image. Additionally, Domino’s has tried to keep this momentum going by embracing technology in its pizza ordering and delivery process, introducing such features as the “Pizza Tracker”, as well as “Dom” the voice ordering assistant mobile app, and most recently the ability to order pizzas by way of text message, smart watches, smart TV’s, and even Twitter:  https://vimeo.com/139141726.

So what do you think about repositioning? Any thoughts on the brands I mentioned and whether or not they’re doing a good, bad or indifferent job in their efforts? Also, any examples of brands that you can think of (either recently or historically) that you’ve noticed trying to reposition themselves? Please share your thoughts in the comments section below.

*Images: Buick Avenir Concept (Buick.com, 2016); Cadillac Elmiraj Concept (media.cadilla.com, 2016).

John Gironda, Ph.D., is an Assistant Professor of Marketing in the H. Wayne Huizenga College of Business and Entrepreneurship at Nova Southeastern University. His teaching and research interests include digital and social media marketing, consumer behavior, marketing strategy, advertising, personal selling, and sales management. He can be reached at: jgironda@nova.edu;  http://www.business.nova.edu/about/faculty-bio.html?jgironda

Useful or Invasive? Your thoughts on Personalized Advertisements

Personalized advertising (sometimes referred to as behavioral re-targeting) represents a new and emerging trend in the field of online advertising. Through the use of enhanced online data collection techniques, marketers can now craft seemingly made-to-order advertisements tailored to a specific individual. Numerous websites and services have begun hosting personalized banner and/or text ads, such as YouTube, Facebook, Hotmail, and Gmail. In addition, the technique is being used by more and more firms such as Amazon, MetLife, Dollar Thrifty, Staples, Joseph A. Bank, Orbitz, Zappos, and T-Mobile.

Through advances in data collection that allow individual consumers to be identified and their behavior analyzed, personalized advertising promises to deliver consumers more relevant ads. This is because the ads are created from specific consumer information and explicit and/or implied preferences obtained from previously monitored online activity including search entries, cookie clickstream data, and/or user profiles.

You may or may not have heard the term personalized advertising before, however you have most likely been served a personalized advertisement at some point. If you have conducted an online search for a particular product, and/or viewed that product on an e-commerce website, a laptop computer or tablet, you have probably noticed an advertisement for that same exact product, from the same seller, following you around the Internet from site to site for about a week or so.

The logic behind personalized ads, is that the increase in advertisement relevance should lead to a number of benefits including, more effective online display ads, less wasted advertising dollars, increased consumer satisfaction, and increased profits, just to name a few. Therefore, personalized advertising has the potential to benefit both consumers and firms alike. This has led to excitement regarding the huge potential that personalized advertising may hold. Hailed as a breakthrough because it will allow for the right person to receive the right ad at the right time, personalized advertising has even been touted as the savior of online display ads.

While personalized advertising seemingly holds great potential to transform online advertising and provide benefits to both marketers and consumers alike; consumer acceptance of the technique still remains a significant hurdle for personalized advertising to overcome.

One of the main issues concerning the lack of acceptance of personalized advertising involves the privacy concerns of consumers who do not yet seem comfortable with the immense levels of tracking, data collection and selling of consumer information that takes place in order to allow personalized advertising to happen. Recent studies by Pew Research reported that 68% of consumers were uneasy about personalized advertisements because they do not like their online activities tracked and analyzed, while 73% felt that it was an invasion of their privacy. In addition, there have also been concerns regarding consumer displeasure with personalized advertisements displayed on social networking sites (SNSs) that explicitly use information from a user's SNS profile in the ad, such as the name of a brand that the user has previously "liked" or "followed". In addition, SNS ads have also utilized information from users' SNS posts and previous browsing history of other websites to tailor advertisements. Finally, there also seems to be a thin line between personalization and invasiveness in advertising. For example, personalized advertisements may sometimes actually be too accurate or "over-personalized", meaning that the level of precision is too high, with the advertisement containing too much personal information about an individual to the point where the ad may be perceived as disturbing and almost "creepy".

Personalized advertising seems to be one of a number of online data collection issues under scrutiny right now, since recent breaches of online security systems due to fraud and/or hacking, have increased concerns over the safety and security of consumers' online personal and financial information. These concerns have led to calls for increased consumer privacy protections in a number of global regions including both the United States and European Union.

So where do you come down on personalized advertisements? Do you find them useful, relevant, annoying, an invasion of your privacy, or something else? Please share your thoughts in the comments section below.

*Image source: MyBuys, Inc., 2015, "Personalized Display Ads"

John Gironda, Ph.D., is an Assistant Professor of Marketing in the H. Wayne Huizenga College of Business and Entrepreneurship at Nova Southeastern University. His teaching and research interests include digital and social media marketing, consumer behavior, marketing strategy, advertising, personal selling, and sales management. He can be reached at: jgironda@nova.edu; http://www.business.nova.edu/Faculty.cfm/jgironda/