INNOVATION BY SHEPHERD NEAME

Shepherd Neame has always focused on premium quality brands and tried to pull customers by creating demand and building awareness for their brands. In response to the dynamic nature of the beer market, they launched a number of new initiatives to strengthen their portfolio (Shepherd Neame, 2016). The changing needs of customers could not just be tackled by launching a new product though. Repositioning brands and devising a focused marketing plan for them have been some of the key strategies adopted by Shepherd Neame (Williams-Grut, 2015).

A number of key initiatives were undertaken by Shepherd Neame to cope up with the industrial shift.

Master Brew, the flagship ale of ShepheredNeame, has been re-launched with an attractive new brand identity that emphasizes its tradition as a classic dry hoppy beer from ‘The Home of the Hop’(Shepherd Neame Limited, 2016).
To commemorate the 75th anniversary of the Battle of Britain, Shepherd Neame is supporting a number of activities and events as well as launching a new brand Spitfire Gold, a light golden ale at 4.1% ABV, to take advantage of the trend towards lighter, paler and more aromatic sales. Earlier to this, Spitfire experienced a volume decline of ~15.5% due to reduction of promotional activities in the supermarkets as the grocers face significant competitive pressures (Shepherd Neame Limited, 2016).
In terms of innovative marketing campaigns, Spitfire TV advertisement has won a Beer Marketing Award for the Best Broadcast Advertising Campaign in 2014. This showcases the creativity of the company in coming out with newer methods of attracting new customers and retaining the existing ones (Shepherd Neame Limited, 2016).
The lager market has been promising in the UK. The Asahi Super Dry and Samuel Adams Boston Lager have both experienced some high-profile distribution on-trade. To complement Boston lager, the company is importing additional products from the Samuel Adams range including Rebel IPA, a strong hopped US craft beer, and Angry Orchard, America’s no. 1 Hard Cider (Shepherd Neame Limited, 2016).

This innovating approaches have strengthened the company’s portfolio and the opportunity to offer a wide range of beers to bars, pubs and restaurant groups.

SCOPE FOR NEW PRODUCT INNOVATION FOR SHEPHERD NEAME

The growth drivers of UK beer market is expected to be flavoured/mixed lagers. While Shepherd Neame has been successfully marketing the range of licenced lager beers, there is further scope in penetrating the mid-premium flavoured lager market. Presently Sun Lik Beer, Whitstable Bay, Samuel Adams Boston lager and Asahi Super Dry are some of the high-selling lager beers marketed by Shepherd Neame.
The light lager concept can be tested using a Activity-based new product development model. Various packaging options, price range, SKUs, promotional offerings and distributional options can be verified through proper research.
The concept for this beer can be:
“A light lager with a citrus aroma makes one feel refreshed and relaxed after a hard day’s work. One can afford it, one can find his neighbours drinking it, and can safely share with friends or colleagues.”
The beer attributes and ingredients can be researched upon during the concept generation period in detail. A suitable name and label need to be assigned to the brand before going into the concept testing phase.
In the concept testing phase, evaluators need to rate the beer with respect to the concept statements, such as –

This is a beer with a sweet aroma.
The beer has just the right amount of bitterness and a good taste.
It is affordable.
It gives a refreshing feeling.
I can associate myself with the brand.

Also, a telephonic, email or interaction-based survey needs to be conducted among the customers to evaluate the preference of the beer based on the concept. The respondents need to be within the target group and sampled through a proper technique. The survey would properly reflect on the forecasted sales and market penetration by the new brand based on the responses on the options –

definitely buy
probably buy
might or might not buy
probably not buy
definitely not buy

Based on the responses during the concept testing phase, Shepherd Neame can proceed with the development phase of the new lager. The lager, once produced, can be test marketed in Kent and London for market responses to the new offering. This is facilitated by the extended reach of Shepherd in the pubs, bars and restaurants in these areas. After beta testing and incorporating suggested improvements through research, the brand can be officially launched in the market in a phased manner.

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GO-TO MARKET STRATEGY FOR SHEPHERD NEAME

8P Analysis:

Product: The lager is recommended to have the following features –

made from high quality Kentish hops
4% ABV
golden colour with a citrus aroma
light bitterness

Price: As per the research data obtained during the concept testing phase, there should be multiple price points for the lager beer based on SKU variations. Shepherd Neame’s products are focused upon quality and targeted to premium market segment. The proposed lager is for the mid-premium segment and hence it can priced a little lower compared to other options in the portfolio to attract volume sales in pubs, bars and occasions for celebrations.
Place: Initially, test marketing can be performed in Kent and London, where the existing channel partners can play a major role in creating a market and awareness for the new lager. Some channels which can be leveraged:

departmental stores
speciality stores
mass merchandisers
e-commerce websites

On successful beta testing and customer feedback analysis, the lager can be channelized globally in a phased manner.
Promotion: Total advertisement and promotional expenses should be 4% of the total estimated sales of the device per annum.
Since the target customers will be students mostly (30-55 year category), the promotional avenues will include –

advertisements in local and national dailies
point of purchase displays and pamphlet distribution in the following outlets –
bars, pubs and restaurants
IT parks
supermarkets
display during trade events and road shows
direct marketing by leveraging existing salesforce
low-cost and effective social media marketing techniques with “retargeting” and online query resolution
tying up with sports events such as English county cricket or English Premier League

Process: The buying process for the lager should be smooth. A bar owner may like to produce a bulk order and available suitable discounts. The process has to be more customer oriented.
Physical Environment:The website of Shepherd Neame as well as the physical presence of the the bars or pubs owned by them need to be proper, i.e. clean, organized, smart and well-managed. The lager needs to have a separate shelf space which can attract the attention of the end customers. The bar or pub manager needs to highlight the arrival of the brand into the market once it is launched in order to create awareness.
People: The frontline people i.e. salesforce, pub and bar owners are the ones who need to create awareness by introducing and pushing the new brand into the minds of the customers. Often consumers seek preferences from the bar manager and this would definitely help spreading word-of-mouth publicity.
Productivity and Quality:The lager has to be of very high quality to strike the target segment at the first trial. The market penetration becomes easier once a good marketing plan is adopted even before the launch or once the new offering is introduced into the market.
Segmentation-Targeting-Positioning:
Geographical: Shepherd Neame should target the Kent and its outskirtsinitially. Later, it can expand into London, Sussex, Surrey and other regions where existing channel partners can facilitate distribution.
Demographic: The target segment includes the upper-most consumer segments in the Socio-Economic Classification i.e. A1, A2 and B1, and also higher middle class B2. The different set of consumers are –

B2C consumers: Middle-income working professionals, college students etc. should form the target consumers in the B2C segment.
B2B consumers:Bars, pubs and restaurants should be targeted in the B2B segment.

Behavioral: The working class who are looking for a relaxed and refreshing drink after a hard day’s work to quench their thirst.
Psychographic: The psychographic segment would highlight on taste and qualityof the lager – i.e. it will mostly attract on-the-go “Cyber Individualists” and “Aspirationals”. The former lead a lifestyle of “Thinkers” and they are “HardcoreLoyals” when it comes to brand loyalty, while the latter segment are “switchers”. It is very important to retain the switchers to increase repeat sales.

BEER INDUSTRY: ETHICAL ADVERTISING

In alcoholic beverage industry, ethical advertising is paramount to maintaining regulatory standards defined by ASA (Advertising Standards Authority) and CAP (Committees of Advertising Practice).As per the code, “Advertisements for alcoholic drinks should not be targeted at people under 18 years of age and should not imply, condone or encourage immoderate, irresponsible or antisocial drinking.” (Committee of Advertising Practice, UK, 2016) Also the advertisement campaigns must not make any health or fitness claims or weigh-control claims.
Shepherd Neame has abide by the standards set by the governing authorities and it has effectively created award-winning ad campaigns. It has been awarded the “Best Broadcast Advertisement Campaign” for its campaign on the Spitfire brand in 2014.

MEASURES TO MONITOR MARKETING PERFORMANCE

The marketing efforts of every company needs to be put under a scanner. The obvious indicator is corporate awards or increased sales of its products. Apart from these assessing customer response about the products can be one major approach for measuring marketing performance of the company. Shepherd Neame won the Best Advertising Campaign Award in 2014 for its ad campaign on Spitfire, a local ale.
Certain techniques that can measurethe marketing effectiveness are listed below –

Sales Figure:High sales volume can automatically assert the effectiveness of marketing communications.
Home Customer Survey:Shepherd can distribute surveys to its potential customers (bars, pubs, restaurants etc.) through email, phone or take-home surveys attached with customer receipts. This very well solicits the customer’s experience of the product. In the beer industry it is very important to solicit pub manager’s response to monitor any shift in consumers’ preference.
Customer Service Questionnaire: These are brief surveys that the end customer fills up after having a drink at the bar. This method can provide light on how well the new lager is perceived by the end customer.
Social Media Follow-up: Online social media platforms are one key resources (pages, ads etc.) that can provide deep insights on customer satisfaction on the lager. It is important to get the brand trending by creating a buzz (through hashtags, launch promos etc.) even before the official launch to gauge what the customer perception is surrounding the brand. This also, in a way, helps in sales figure estimation.
Customer Suggestions: Customers often fill up voluntary surveys and provide suggestions that can be seen as a strength or a scope for improvement. Creating customized services by incorporating these suggestions can help build brand loyalty.
Unique Visitor, Website View, Bounce Rate:The marketing effectiveness can be examined by analysing the number of unique visitors, amount of time spent by them on the official website, or the product sites on e-commerce platforms, and also bounce rate, i.e. sales that fail to convert and conversion rate.

The survey techniques mentioned above should not be elongated with too many questions. The survey questions should solicit both objective and subjective responses from the respondent. The survey should be designed aesthetically to have a compelling effect on the respondent to fill up.

REFERENCES

1. Account, S. N. O. T., 2016. Shepherd Neame Official Twitter Account. [Online]
Available at: https://twitter.com/ShepherdNeame/status/721427848628727808
[Accessed 17 April 2016].
2. Committee of Advertising Practice, UK, 2016. Advertising Codes. [Online]
Available at: https://www.cap.org.uk/Advertising-Codes/~/media/Files/CAP/Codes%20BCAP%20pdf/The%20BCAP%20Code.ashx
[Accessed 17 April 2016].
3. Euromonitor International, 2015. Beer in the United Kingdom, s.l.: s.n.
4. Shepherd Neame Limited, 2016. Shepherd Neame Limited Annual Report 2015, Kent, London: Shepherd Neame Limited.
5. Shepherd Neame, 2016. Shepherd Neame Brands. [Online]
Available at: http://www.shepherdneame.co.uk/brewery/our-values
[Accessed 17 April 2016].
6. Social Mention, 2016. Social Mention Analysis. [Online]
Available at: http://www.socialmention.com/search?q=Shepherd+Neame&t=all&btnG=Search
[Accessed 17 April 2016].
7. Williams-Grut, O., 2015. Britain's oldest brewer sold 75 million pints last year. [Online]
Available at: http://www.businessinsider.in/Britains-oldest-brewer-sold-75-million-pints-last-year/articleshow/49073101.cms
[Accessed 17 April 2016].

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