Molson Case Analysis

Christina Barsotti and Katherine Blackwood EBTM 411 Dr. Steffes November 13, 2010

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Problem Statement & Key Issues The Molson Company is a beer brewery and distributor and is also the second oldest company in Canada (Qureshi, 2008, p. 1). Molson is the most preferred beer brand in Canada and is part of the Molson Coors Brewing Company which holds the fourth largest amount of market share globally (Qureshi, 2008, p.1). In 2007 when firms were just starting to see Facebook and other social networking sites, like Twitter, as valuable places to market to consumers and communicate with them, Molson also decided to create a Facebook account to connect with consumers and increase brand awareness. One of the first promotional activities Molson established using its Facebook account was a contest called “Cold Shot” which was targeted at Canadian college aged students between the ages of 19 and 24. This contest was set up to be a competition between Canadian colleges, awarding the title of “number one party school in Canada” to the college with the most pictures posted by students while also giving a spring break trip to the student from that winning school who submitted the best picture (Qureshi, 2008, p. 5). Molson had to pull the promotion, though, because many administrators and other students from the various colleges were not happy with the contest since they thought that it not only gave their schools a bad image, but they also saw it as Molson encouraging irresponsible behavior and underage drinking. Therefore, Molson’s problem is to determine if it should continue to use social media, like Facebook, when marketing its brand, and if it does choose to continue, how the company will use these sites to promote its brand in the future. Another issue this company is facing is how it can reestablish its brand as a brand that promotes and encourages responsible and legal use of alcohol throughout its future promotions, especially on these social media sites.

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Consumer Buying Decision Model It is important for the Molson Company to look at the Consumer Buying Decision Model for the beer industry when determining if it is appropriate for this company to continue to use social media for marketing and how it will use social media to promote its brand. First, when it comes to need identification, consumers purchase and drink beer or alcohol in order to relax or have a good time with friends and family. Consumers identify alternatives or the different brands of beer or alcohol by word of mouth from friends or family or by observing their friends or family consuming these certain brands. Also, they can learn about the different brands available while out at bars or restaurants, shopping at grocery stores or liquor stores, and from different advertisements for the brands on television, on the internet, or in print media. Since beer and alcohol are products that are primarily bought for social purposes, word of mouth or recommendations from friends or family about their favorite brands would be the most important way that consumers evaluate their alternatives. When it comes to the purchase step in the consumer buying decision model, consumers will purchase the brand they have chosen either while out at a bar or restaurant or, if they are drinking in a home setting, they will purchase at a liquor store or grocery store. During post purchase, consumers may have to deal with cognitive dissonance depending on their experience while drinking that brand of alcohol. Since many people associate their good or bad times with the alcohol they drank, if an event does occur where the consumer got sick or in some type of trouble while consuming a brand of alcohol, they may connect that experience to the brand and choose to never purchase that brand again. Consumer Expectations When consumers purchase beer or alcohol, they expect to have a fun or enjoyable time while drinking that product. They also expect for a certain brand to always taste the same way

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since this is a factor that many consumers use to determine their favorite brand. Adversely, consumers also have certain expectations or perceptions of the brand that they purchase and the company that sells that brand. This is very important for Molson since the company not only always sought to produce quality beers, but also always tried to be perceived as a socially responsible company, especially through its “Here’s to Responsible Choices” Campaign, which encouraged drinking in moderation, not drinking and driving, responsibly preparing before drinking, and also condemned the idea of underage drinking. Therefore, many consumers have a perception of Molson as being a brewery that produces quality beer and a product that helps them have an enjoyable time while also being a responsible company that looked out for the best interests of its consumers. Market Size and Trends Regarding Social Media It is also important for Molson to recognize who the average user of social media or social networking sites is and the behavior of this user when determining if it should continue to market its brand via this channel. According to the Forrester survey conducted in 2006, 69 percent of young adults ages 18 to 21 used social networking sites while only 20 percent of adults used social networking sites (Qureshi, 2008, p. 4). Also, this group of young adults also had higher usage ratings for social networking sites, since 68 percent visited these sites daily while only 42 percent of adults reported using social networking sites daily. Essentially, these statistics show that if Molson used Facebook or other social networking sites to market its brand, it would mostly be interacting with or promoting to young adults since this is the average user, but it would also be promoting to the adult audience too since their usage of these social networking sites was not drastically lower than that of the young adult group. While this may not be completely socially responsible for Molson to promote to this group, it would be gaining

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brand awareness with these individuals who could be customers in the near future since these young adults are only a few years away, if not already at legal drinking age. It is also important to note that individuals who use social networking sites, like Facebook, want “to engage with their favorite brands” and, as the Forrester survey also stated, “more than one-third of 18 to 26 year-old social networking users admitted that they would be interested in seeing a marketer’s profile” (Qureshi, 2008, p. 4). This willingness of consumers to interact with brands and also to be exposed to marketing messages on a brand’s profile is extremely important to Molson, especially since beer is a product that many consumers purchase due to word of mouth or seeing their peers purchase or enjoy a certain brand. By allowing consumers to communicate with each other and share their experiences they have had with Molson products, Molson would be able to significantly spread brand awareness and a positive image of its brand. Company SWOT Analysis (Exhibit 1) When looking at Molson and its utilization of Facebook as a promotional tool, it does have a few strengths that are important. First of all, from a company aspect, Molson is a very successful company, not only in Canada, but also around the world. In Canada, Molson had 41 percent market share in 2006, making it the most popular or preferred brand in the country, while globally, it had 3.8 percent market share, making it the fourth most preferred brand in the world (Qureshi, 2008, p. 1). Therefore, Molson already has widespread brand awareness and presumably a favorable perception by many consumers around the world. When looking at Molson’s use of Facebook, it also has a strength that would possibly encourage the company to continue to use social media since the company had 19,000 members on its Facebook page (Qureshi, 2008, p. 4). 19,000 members is a large audience that is willing to interact with the

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Molson brand and other fans of the Molson brand, giving Molson a large audience to spread future marketing messages to at virtually no cost. Molson’s weakness was that it did launch the “Cold Shots” campaign, targeted at college students between the ages of 19 and 24, which did give many consumers the impression that Molson condones underage drinking and irresponsible behavior, going against the image that Molson tries to promote of being a company that encourages responsible alcohol consumption. While the campaign was popular with many Canadian college students, it did result in a backlash from students and administrators from different colleges, resulting in Molson pulling the promotion, since these individuals thought that it tarnished the image of many schools while also encouraging students to engage in underage drinking and alcohol consumption. An opportunity for the company regarding social media is that social networking sites are an ideal place for companies like Molson to interact with and promote to consumers because the average user is so young and readily interacts with friends on these networking sites since these sites promote a “trusted and open setting” (Qureshi, 2008, p. 5). Also, many users of Facebook and other social networking sites expressed that they would like to interact with their favorite brands and also see these brands’ profiles. Therefore, there is an opportunity for Molson to promote its brand and products to consumers that are willing to be exposed to marketing messages from around the globe since word of mouth is spread from consumer to consumer so quickly and visibly while other forms of social media like blogs or forums would also spread brand awareness. The structure of social networking sites also allows for a virtually effortless spread of viral marketing campaigns by Molson and a creation of buzz about its brand and products. Along these same lines, Molson also has an opportunity to spread a positive image of

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its brand or their “Here’s to Responsible Choices” campaign in order to redeem itself for the mistake it made with the “Cold Shots” campaign. Adversely, Molson needs to take into account a threat of using social media which is that a company has very limited, if any, control over what community members post, leaving Molson vulnerable to possible negative comments about its image or products. Another similar threat that can cause a loss of control or ownership by Molson over the content on its social networking page is the idea of mashups since mashups result in the combination of content and data from different sources or services (Qureshi, 2008, p. 3). Competitor Analysis and Strategies Even though Molson is the most preferred brand in Canada, it lags behind InBev NV, Anheuser-Busch, and SABMiller globally, resulting in a need for stronger promotion of the Molson brands to consumers from around the world. A great way to do this would be to use Facebook since it is virtually a global community, and many of Molson’s competitors are also taking advantage of marketing through social media in order to increase their brand awareness and build communities that support their products (Qureshi, 2008, p. 3). More specifically, along with Molson, all of its competitors are also trying to figure out the best way to utilize Facebook and other types of social media for their marketing and promotional activities by using technology and different types of content like videos and pictures to promote their brands (Qureshi, 2008, p. 3). Alternatives (high level strategic and marketing implications) Colleges are not looking to be known as the best party school. Colleges are looking to be known for academics, and a place where students can create social connections. Instead of running a promotion that promoted the drinking of beer on college campuses, Molson could have

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promoted responsible drinking on campuses in various ways, created volunteer opportunities to go with its desire to help the community, or created a promotion that appealed to those of the legal drinking age. Run A Responsible Choices Campaign As a company, Molson is committed to the promotion of responsible drinking (Qureshi, 2008, p.1). Since this is the case, Molson should run a campaign to promote responsible drinking, especially on college campuses. Social media can still be utilized by having stories in the form of blogs, or videos, or even photos about drinking responsibly, and of people doing so. This campaign would be very much like both the “Cold Shot” campaign challenge and the “Here’s to Responsible Choices” campaign, only it would reward the college or university that best promoted responsible drinking. Students at the college would post about events, classes, or other ways that the college or university he or she attends promotes drinking responsibly. On the Facebook page, there could be a forum where people could talk about responsible drinking. Volunteer Days Hosted By Molson Molson takes its community responsibilities seriously, and could encourage those who are brand loyal to participate in volunteer days Molson would sponsor. These volunteer opportunities could range from cleaning a local park to visiting people adversely affected by drinking. Microblogging About Drinking Molson Anytime someone, student or not, is drinking a Molson beer, encourage him or her to update their Twitter or Facebook status about where they are and what they are drinking. This lets the friends of the person drinking Molson know what he or she is drinking, and where they got the drink so that others know where they can get Molson beer. In addition to posting statuses,

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Molson should encourage those drinking of the legal drinking age to post pictures of themselves and friends out having a good time while consuming Molson brand products. Tailgating Rather Than a Dorm Room Another option for Molson would be to promote the brand in a way that is more acceptable. Rather than ask students to post pictures, ask the people that tailgate and/or attend hockey games to post pictures of themselves drinking Molson products while tailgating or during their favorite NHL team’s game. Rather than a “dorm room” for each college, use a “tailgate” for each NHL team on Molson’s Facebook. At the end of the campaign, whichever NHL team’s fans have submitted the most pictures wins the title “Molson’s MVFs” (Most Valuable Fans). From the winning hockey team, a photo would be chosen at random, and that person would win a prize of either an all expense paid trip to the Stanley Cup, or beer supplied by Molson for the next season’s tailgating. Recommendation Molson should continue to benefit from the many opportunities to market their products using social media, or more specifically Facebook, while implementing the “Molson’s MVFs” campaign to promote the idea that their product is a fun product while still showing the brand as encouraging responsible drinking. Rather than using “dorm rooms” for colleges and universities, Molson should create a campaign using “tailgating” for NHL hockey teams to raise awareness. By promoting Molson in a more appropriate place, like a hockey game, there will be less controversy over the promotion of drinking Molson. Alcohol is sold at sporting events, and is a large part of tailgating festivities. Creating a contest for a popular sporting event that already involves beer will help to raise awareness for Molson.

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The new tailgating campaign, “Molson’s MVFs” (Most Valuable Fans) will be similar to the “Cold Shots” campaign Molson ran for colleges and universities. Molson’s MVFs campaign would run the length of hockey season. When hockey season begins, fans would be able to join a tailgate for their favorite team on Molson’s Facebook site, and post pictures to that tailgate of their own tailgates. Those pictures could be of family and/or friends at the tailgate before a game having fun, playing games, eating, or drinking a Molson beer. At the end of the season, the team tailgate on Facebook with the most pictures wins the title “Molson’s MVFs” (Most Valuable Fans). From the winning tailgate, one photo will be chosen at random and the tailgate in the picture will win the option of having an all expense paid trip for two to the Stanley Cup, or of having Molson provide all the beer for the winner’s tailgate the next season. The campaign will be used to create awareness for Molson primarily through social media, with some traditional media directing consumers to the Facebook site to generate more traffic. The primary age demographic of social media is 19-24, so the primary group of the campaign would be aimed at the same demographic. These 19-24 year olds would be hockey fans that may or may not tailgate. Those who do not tailgate may be encouraged to tailgate with this campaign in order to be entered in the contest. There is no fee to join the contest or to participate in the contest, so a fee will not deter people from participating in “Molson’s MVFs.” The only costs involved are those that are involved with the game and tailgating. Most of the target audience is already on Facebook posting pictures, videos, comments, stories, and posting statuses on a somewhat regular basis. Since they already spend a large amount of time on Facebook, posting pictures onto Molson’s tailgate campaign will not be a stretch. There is also an incentive to post pictures that will encourage hockey fans to use some of that time to post their pictures for the contest.

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In order to raise awareness for the campaign on Facebook, some traditional media will be used to generate traffic to the Facebook site. During hockey season, Molson’s Facebook site will promote the campaign, but there will also be promotion on Molson’s products with the campaign name, “Molson’s MVFs”, and direction to its Facebook site for more information and to join the contest. There will also be promotion during tailgating and at games reminding fans to post pictures on Molson’s site to be entered in the contest for Most Valuable Fans, and to increase the possibility of being chosen for the prize. In addition, Molson will partner with the various NHL hockey teams to provide backgrounds and screensavers for fans to help fans show their enthusiasm for their favorite team. Even though the “Cold Shots” campaign was a failure for Molson, social media and social networking sites provide too many outstanding opportunities for firms to market their products, making it the best decision for Molson to continue using these social media for their promotional activities. By instead using the “Molson’s MVFs” campaign, they will be able to spread brand awareness while once again promoting that their brand helps consumers have a fun time while encouraging responsible drinking.

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Exhibit 1- Molson SWOT Analysis

Strengths
    41% market share in Canada, making it the most preferred brand nationally 3.4% market share globally, ranking it fourth in the world 19,000 members on its Facebook page 

Weaknesses
“Cold Shots” Facebook promotion failed and gave Molson a bad reputation since it was seen as promoting irresponsible behavior and underage drinking.

Opportunities
Average users of Facebook are very young and readily interact with friends because of the open and trusted setting of social networking sites. Users of social networking sites would like to interact with a see their favorite brands’ profiles. Social networking sites allow for a quick and effortless spread of messages, which could include viral marketing campaigns.  

Threats
Social media are very hard to control since anyone can submit posts or comments about a firm or its products. Social media also allows mashups which cause an issue for companies when it comes to ownership or control over content.

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References: Qureshi, I. (2008). Molson Canada: Social media marketing. Richard Ivey School of BusinessThe University of Western Ontario. The McGraw-Hill Companies.

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