Kirin Beer Case – Marketing Engineering and Analytics

and other higher end restaurants (i.e. steakhouses). In addition, retails sales will be focused on premium
grocery markets (i.e. Wegman’s, Dean and DeLuca), select liquor stores, and beer distributors.
Finally, the promotions used for the new product introduction will happen on a local/regional level.
These will include unique and memorable experiences for the consumer in order to establish the brand
image and encourage consumer recall. Such promotions involve tasteful window clings (Exhibit 5),
displays for in-store attention, and beer tastings. A signature promotional tool that we recommend
utilizing is an in-person marketing spectacle at bars. A member of a promotions team will dress as a
Japanese Samurai warrior and will work with the promotions team to create an experience for the bargoers. When a customer orders a Kendo beer, the Samurai warrior will use a Samurai sword to remove
the bottle cap for the customer. This unique experience draws the attention of other bar clients and
makes the consumer feel special and exclusive, which is directly in line with the premium and unique
image of the beer.
Rationale and Supporting Analysis:
Kirin Kendo will be established as a premium beer. There are several reasons that we chose to position
the beer in this manner. First, when using conjoint analysis, the market share did not differ much
between the two price points. If both Kirin products are priced at $5.49, Kendo will have a market share
of 1.44%, Kirin’s original beer will have a market share of 1.246%, and Sapporo will have a market share
of 1.52%. If Kendo is priced at $6.19, Kendo will have a market share of 1.39%, the original Kirin beer will
have a market share of 1.251% and Sapporo will have a market share of 1.53%. Before the introduction
of Kendo, the original Kirin beer held a 1.26% market share and Sapporo held a 1.54% market share
(Exhibit 6). In addition, based on the expressed needs of our target consumer (which matched closely
with the optimum product profile described below), the beer should be high quality, good tasting and
rich, full-bodied. This customer values a high quality beer more than the price, and has the highest
knowledge of beers and values a prestigious brand. This consumer would likely be attracted to a high
status brand and would be willing to pay a higher price.
Using conjoint analysis, we analyzed the data to develop an optimum premium profile. Originally, the
optimum beer was of European origin, however since we will be selling a Japanese beer (we need
Japanese beer in the U.S. to beat Sapporo in Japan), we reanalyzed the data with only Japanese beer as
an option. As a result, the optimum product profile is: Japanese Beer, $5.49 per six pack, rich/full-bodied
flavor, mild aftertaste, low calorie, six 12 oz. large bottles in a six-pack, and brown bottles with painted
labels. As mentioned above, we analyzed the data for increased price and ultimately decided to go with
the higher margin price of $6.19 per six-pack.
In segmenting the market to find our target consumer, we observed three clusters. We chose Cluster 3
as our target segment based on its beer preferences and taste. There is a clear difference between
segments in the area of flavor, good taste and high quality; in all of these categories, Cluster 3 had a
much higher preference than the other groups. In addition, this segment drinks the most beer. From the
data provided, we know that 20% of consumers drink 80% of the import beer. Furthermore, the
consumption patterns of this consumer (more likely to drink in restaurants, bars, and with guests), lends
itself to effective product marketing with more consumer touch points. In addition, there may be
opportunities for sales to permeate into other segments because the personality traits of all three
clusters are very similar; the other segments may also be attracted to our promotional activities (Exhibit
7). We have used a positioning map to determine where the Kendo brand will fall in comparison to
competitors. Exhibit 8 shows Kendo’s predicted position.
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We recommend test launching the product in New York and Los Angeles, where sales of Kirin Beer have
previously been successful. Reaching out to large markets on both coasts will provide insights for
expansion. Provided that results in New York and L.A. are positive, we will expand to eight other
metropolitan areas across the U.S. These areas have been identified by a leading brew publication as
“top beer cities”1. If the initial program does not heed positive results, we will use the launch data to
analyze the situation and implement a new solution.
It is critical to determine whether the current Kirin product and the new product will surpass Sapporo
sales in the U.S. After the introduction of Kendo, Kirin (both products) will capture 2.64% of the import
beer market in New York and L.A. At 2.64% market share, Kirin will sell a total of 2.1 million cases
(approximately 1.1 million cases of Kendo and 993,000 cases of the original Kirin beer). This results in a
1.1 million increase in cases sold for Kirin, with the assumption that 20% awareness and 50% distribution
are achieved. In reality, we do not expect that full awareness and distribution will be attainable within
the first year. Exhibit 9 demonstrates the expected sales of Kendo after six, nine, and twelve months. If
marketing efforts begin one month prior to the release of the Kendo beer in the U.S., we expect to
achieve approximately 60% of the projected yearly sales of Kendo in the first year, which equates to
approximately 663,000 cases of Kendo beer. The introduction of Kendo will cause a slight
cannibalization of sales for the original Kirin beer. We can expect to see a decrease of approximately
7,000 cases of the original Kirin beer in the first year. We also expect to see a drop in about 12,000 cases
of beer for Sapporo per year. This places Kirin in the number one Japanese beer position in the U.S.
Kirin has a limited budget for marketing efforts geared towards the Kendo launch. Based on last year’s
revenues from the original Kirin product, Kirin has just $1 million to spend on marketing for Kendo. If the
Kendo launch is successful, Kirin can expect to allocate approximately $2 million to marketing in the
second year.
Contingencies and Other Issues:
This analysis and recommendation were performed without access to full information regarding past
marketing and sales tactics. Multiple tools within the Marketing Engineering for Excel software were
used to perform a complete analysis with the information provided. A segmentation analysis was
utilized as a means to target the appropriate market and a positioning analysis was used to position the
product appropriately within the market. A conjoint analysis was used to predict the preferences of
potential consumers based on a number of different attributes and then demonstrate how the
consumer may react if the new product was introduced to the market.
There are several alternatives that have been rejected. The first was the decision not to enter the U.S.
market with a new product. After performing the appropriate analyses, we determined that the
introduction of Kendo in the U.S. market would achieve the objective of surpassing Sapporo as the
number one Japanese beer in the U.S. based on additional cases of Kirin beer sold per year. A second
rejected alternative was the use of mass marketing as a channel of reaching the target segments. The
high costs and low penetration of mass marketing efforts could not be justified, especially considering
its past failure. It is ineffective and inefficient to reach out to such a wide range of consumers, many of
whom will never be targeted or have access to the beer. Also, Kirin’s limited budget does not allow for
such expensive marketing. A final alternative that was rejected was the development of a non-premium
beer versus a premium beer. A premium beer was aligned with the selections of the optimum product,
and selling a premium beer allows for larger margins for Kirin. The non-premium beer is disconnected
from the optimum product. 2
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REFERENCES
1
Celebrator Beer News. June/July 2006. Top Ten Beer Cities in America.
http://celebrator.com/archives/0606/0606reviews-topten.html
2
All data and information extracted from “Kirin USA, Inc.: Ichiban Shibori” case by Robert J. Thomas
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APPENDIX
Kirin Kendo
Japanese Beer
$6.19 Price
Rich Full-bodied Flavor
Mild Aftertaste
Low Calorie
6 x 12oz Large Bottles
Brown Painted Bottles
Exhibit 1: Kendo Beer Product Profile
Self-Identified Demographics of Target Consumer
(Segment 3)
Consumed average of 9.8 beers last week
Age: 30-40
Income: around 45-70K per year
Education: Trade/technical school or college
Gender: Male
Exhibit 2: Target Consumer Profile
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Exhibit 3: Kirin Kendo Beer Product Samples from left to right: beer bottle, six-pack case, beer case window cling in
a retail refrigerator, and beer mug.
Exhibit 4: Kirin Kendo product launch map highlighting New York, NY and Los Angeles, CA as trial cities.
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Exhibit 5: A window cling used in retail locations. The window cling will be placed on the glass in front of the cases
of Kendo beer. The center region of the window cling will be clear and consumers will see through the “mouth” of
the dragon to the beer.
Percentage Comparison of
Current Market Share vs. Predicted Market Share
40%
35%
30%
25%
20%
15%
10%
5%
0%
Current
$6.19 Pricing
Exhibit 6: Change in Market Share with the introduction of Kirin Kendo
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Exhibit 7: Personality traits of each of the three clusters
Dimension II (29.9%)
Bass
Masculine
Rich full-bodied
Gives buzz
taste after
For home
work
Good taste
Country with
Drink at bar
Becks
brewing
Heineken
Kirin
Drink with
Sapporo
St. Pauli Molson
Good
value for
tradition
Dos
Equis
friends
money
Moosehd
Corona
To serve guests
Lower price
at home
PrestigiousFor young
Drinkpopular
at picnics
Amstel Light
Refreshing
& outings people
Light
No aftertaste
Dimension I (39.8%)
Exhibit 8: Positioning Map for Kirin Kendo
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Exhibit 9: Expected Sales for Kirin Kendo beer during the first year on the market in the US
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ADDITIONAL SUPPORTING DATA:
Exhibit 10
Exhibit 11
10
Aware
*
Awareness Distribution Distro
Heineken
1.00
Becks
0.50
Bass/Guiness 0.30
Amstel Light 0.25
Molson
0.65
Corona
0.60
Kirin
0.20
Saporro
0.20
Kirin Kendo 0.20
1.00
0.80
0.70
1.00
0.85
1.00
0.50
0.50
0.50
1.00
0.40
0.21
0.25
0.55
0.60
0.10
0.10
0.10
Segmentation
Effect
Raw
0.341
13.15
12.44
11.52
11.91
9.43
14.31
4.86
5.94
16.45
Index
Normalized
13.15
4.98
2.42
2.98
5.21
8.59
0.49
0.59
0.56
33.75
12.77
6.21
7.64
13.37
22.04
1.246
1.52
1.44
Index
Normalized
13.23
4.98
2.42
2.98
5.27
8.68
0.49
0.60
0.55
33.76
12.72
6.17
7.60
13.44
22.14
1.251
1.53
1.39
Exhibit 12: Adjustments for awareness and availability based on $5.49
Aware
*
Awareness Distribution Distro
Heineken
1.00
Becks
0.50
Bass/Guiness 0.30
Amstel Light 0.25
Molson
0.65
Corona
0.60
Kirin
0.20
Saporro
0.20
Kirin Kendo 0.20
1.00
0.80
0.70
1.00
0.85
1.00
0.50
0.50
0.50
1.00
0.40
0.21
0.25
0.55
0.60
0.10
0.10
0.10
Segmentation
Effect
Raw
0.341
13.23
12.46
11.51
11.92
9.53
14.46
4.90
5.99
15.99
Exhibit 13: Adjustments for awareness and availability based on $6.19
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