Trainee Supply 2018_Participant Material

GLOBAL MANAGEMENT TRAINEE Individual Role Play Exercise GOOD BEER

PARTICIPANT MATERIALS During this role play simulation, you will be in the role of the manager responsible for Good Beer Brewing Company’s craft beer product line. The Company has been considering the introduction of new craft beer products to the current craft beer product portfolio. Your team has been testing marketing a number of craft beers, with the ultimate goal of identifying two craft products to the current curre nt product portfolio. The COO of Good Beer has asked to meet with you today to discuss your recommendations regarding the two new craft products to be added to the current portfolio, as well as your plans for a marketing campaign to introduce those two new products. You have 20 minutes to review the attached materials related to this issue. Following that 20-minute preparation period, you will have 7 minutes to present your recommendations and plans to the COO, and 8 minutes to respond to questions from the COO. Today is May 6 th of this year.

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E-mail Date: May 4th, This Year Subject: Craft Products To:  You, Craft Beer Product Portfolio Manager CC: From: Pat Gordon, COO Good Beer Brewing Co. I know that you and your team have been test marketing a number of new craft beer products with the idea of introducing two new craft beers to our current craft product portfolio. I would like to meet with you on May 6th to discuss your new product recommendations. In preparation for that meeting, please review the current competitive landscape, data on test market results and internal operational issues that may impact the new product introduction. During our discussion, I would also like you to present proposals on a marketing plan to introduce the two new craft products. The goal of this new product introduction is to increase the total net revenue of our craft product line by 25% during this next fiscal year. In achieving this goal, you should focus on three important elements of our business: increasing product volume of craft products without exceeding the maximum monthly capacity of our brewery, increasing market share of the craft products from the anticipated 24% of the craft beer market to a 30% market share, and increasing profitability. Your performance will be measured based on your ability to positively impact these three elements.

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E-mail Date: May 4th, This Year Subject: Summary of Current Products To:  You, Craft Beer Product Portfolio Manager CC: From: Jan Winters, General Manager, Smithfield Brewery Per your request, attached is data related to the craft products in our current product portfolio.  As you know, the Smithfield brewery, the brewery where all our craft products are produced, can brew up to 12,000 Hectoliters (HL) of product per month. At the current time we have excess capacity to add craft products, as long as we do not exceed our current limit of 12,000 HL per month. In the attached data charts, I have provided Sales and Costs for the last 12 months and Projected Net Revenue for the next 12 months for the current portfolio of craft beer products. I have also provided our anticipated production volumes for the next 12 months, by product and season. I am pulling together data on the craft products we test marketed, and will be following up with that information shortly.

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Data Uploaded: Subject:

May 4th, This Year Data on Current Products

 Access:  You, Craft Beer Product Portfolio Manager  Access: From:

Jan Winter, General Manager, Smithfield Brewery

Current Craft Beer Products Sales, Costs and Projected Net Revenue by Product Current Products Spring Fever Lime Harvest Light Boulder Brown Ale White Ale

Sales (Last 12 Months) $819,300 $2,702,850 $707,350 $1,185,000

Cost (Last 12 Months) $305,000 $1,335,000 $181,000 $495,000

Projected Net Revenue (Next 12 Months) $491,461 $1,435,992 $504,404 $639,100

Anticipated Production in Hectoliters (HL) By Season and Product, Next 12 Months Current Product Spring Fever Lime Harvest Light Boulder Brown  Ale White Ale

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Fall 3,000

Winter 2,500

Spring 7,000

Summer 9,000

8,000 6,000

9,000 6,000

13,500 3,000

15,000 3,000

8,000

7,000

4,000

3,000

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E-mail Date: May 5th, This Year Subject: Increasing Ingredient Costs To:  You, Craft Beer Product Portfolio Manager CC: From: Paula Tobin, Purchasing Manager, Good Beer I understand that you are considering a number of new craft products for inclusion in our portfolio of products. Therefore, I wanted you to be aware of upcoming increases in some ingredient costs. These increased costs will impact the net revenue associated with some of the new craft products. I have just received word of these cost increases from our vendors, so they have not been figured into the anticipated revenue (next 12 months) for any of our test marketed products. The prices associated with roasted malt will be increasing over and above the amount we anticipated when we did our cost projections for the next 12 months. The same is true of a variety of hops known as Saaz hops. The increases of these two ingredients will impact the following products: Boulder Pilsner (which uses Saaz hops to produce a traditional style pilsner beer) Boulder Oatmeal Stout (which uses roasted malt to produce a dark color and rich flavor) The increase in these ingredients will result in a 1.5 percent increase in projected costs for Boulder Oatmeal Stout, and a 1 percent increase in projected costs for Boulder Pilsner. When making decisions about the craft products to add to our product portfolio, I would encourage you to consider the impact of these cost increases on the overall cost of the product.

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E-mail Date: May 5th, This Year Subject: Test Marketed Products – Results To:  You, Craft Beer Product Portfolio Manager CC: From: Jan Winters, General Manager, Smithfield Brewery  As a follow-up to my email from yesterday, I have provided information (in the attached data tables) regarding the craft products that we have been test marketing. The attached data includes target age groups, projected sales, and projected net revenue by product over the next 12 months. I have also included a projection of volume, in HL, that would need to be brewed each season for each product. Keep in mind, our total brewing capacity is 12,000 HL per month. So, when selecting new craft products, it important to select those products that maximize the volume being produced by the brewery, while ensuring that our total product portfolio does not exceed our production capacity at any time during the year. I hope this information is helpful as you prepare for your meeting with Chris.

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Data Uploaded: Subject:

May 5th, This Year Data on Test Marketed Products

 Access:  You, Craft Beer Product Portfolio Manager  Access: From:

Jan Winters, General Manager, Smithfield Brewery

Target Marketed Products: Anticipated Sales and Revenue by Product Test Marketed Seasonal Product Home Brew Might Micro Crisp Craft Turtle Lager Boulder Oatmeal Stout Harvest Honey Wheat Boulder Pilsner Harvest Pale Ale

Target Age Group 56+ 35-55 25-35 35-55 56+ 21-25 21-25 25-35

Projected Sales (Next 12 Months) $950,000 $820,000 $1,550,000 $717,000 $986,000 $613,000 $401,000 $838,000

Projected Net Revenue (Next 12 Months) $395,000 $495,000 $682,000 $497,000 $502,000 $306,000 $215,000 $410,000

Anticipated Volumes (in Hectoliters) Next 12 Months By Product and Season Test Marketed Seasonal Product Home Brew Might Micro Crisp Craft Turtle Lager Boulder Oatmeal Stout Harvest Honey Wheat Boulder Pilsner Harvest Pale Ale

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Fall 5,750 4,500 4,000 2,500 6,500 4,500 2,500 4,500

Winter 5,500 4,500 5,000 2,000 6,500 4,500 2,500 4,500

Spring 5,750 4,750 6,500 3,000 3,500 3,000 3,000 5,000

Summer 5,750 4,750 7,500 3,000 2,000 3,000 3,000 4,000

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E-mail Date: May 5th, This Year Subject: Customer Base By Age Group To:  You, Craft Beer Product Portfolio Manager CC: From: Lana Curren, Manager, Sales Per your request, below I have summarized Good Beer’s current customer base by age group 56+ years old: 19% 35 – 55 years old: 27% 25 - 35 years old: 30% 21 – 25 years old 24%  As you can see from the above data, the 56+ year olds represent the smallest percentage of our customer base (19%). As a result, Sales has implemented a major push to increase sales in the 56+ age group. As you are considering craft products to add to our portfolio, I hope you will give careful review to the products that target this age group. For next year, based on our anticipated volume of current product sales, we anticipate controlling 24% of the craft beer market. Based on beer sales throughout the industry, each 4,458 Hectoliters of beer sold represents 1% of the current beer market.

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E-mail Date: May 6th, This Year Subject: Marketing Budget To:  You, Manager Product Portfolio CC: From: Randall Westbrook, Manager, Marketing  As you think about your plans for introducing two new craft products into our portfolio of products, please don’t limit your ideas to our traditional methods of marketing products (e.g., radio and TV spots, print advertising, and billboard and bus stop ads). I want you to develop an innovative approach to the marketing of these two new craft products. I believe that in order to keep up with changes in media and the delivery of advertising content, we need to find new ways of promoting our products. I believe that applying new innovative approaches to marketing these products is the only way to ensure we achieve our target of 25% net revenue growth over last year. I am working with the Marketing Director to develop a marketing budget for these two new craft products, but at this point I do not want our creativity to be limited by a specific budget number. When you meet with the COO today, you should have multiple innovative, yet practical, ideas for marketing the two new craft products. Your creative ideas will help us determine the appropriate budget for these two products.

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E-mail Date: May 6th, This Year Subject: Competitor Insights RE: Craft Beers To:  You, Manager Product Portfolio CC: From: Ricki Mendoza, Manager, Marketing Since you have been asked to recommend two new craft products for our portfolio, I thought that some information on the competition ’s actions related to craft products might be of interest. I have provided information on our four largest competitors. 1) In recent months, all four of our competitors have tended to focus their product development and their marketing on beers that sell more in the Spring and Summer. 

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Rocky Mountain Brewing Company recently introduced 2 new craft products that we believe are likely to appeal to consumers during the spring and summer months: , Pike’s Peak  Wit Beer and Front Range Ginger. Johansen Brewery have targeted their radio and TV spend on Spring and Summer holidays and are promoting existing products that are popular in summer months.  Alberta Brewing Company has followed an approach similar to Johansen and is specifically targeting spring and summer events and activities. Southwest Brewing has created two new products that seem geared toward Spring and Summer Consumption: Southwest Pilsner, a slightly sweet, malty and hoppy tasting larger, and Southwest Cactus & Lime a crisp light beer with cactus and lime flavors.

2) There is greater emphasis on sweet and flavored beers, in addition to Southwest’s new product, Johansen has introduced fruit flavor beers and Alberta Brewing Company has introduced a Vanilla Ale. Johansen’s and Alberta’s new products are part of the portfolio featured in these competitors’ Spring/Summer radio and TV spends. 3) There seems to be some reduction in the production of heavier beers (porters, stouts, etc.) particularly those products that are targeted at the Winter holiday season. 

Johansen Brewery eliminated their Holiday Spiced Porter product

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Southwest Brewing has ceased production of Pumpkin Brown Ale

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Rocky Mountain Brewing Company has eliminated marketing funds for their Honey Stout and there are rumors that they will soon be eliminating that product. On the other hand, Alberta Brewing Company recently introduced Old Irish Stout and has been marketing the product aggressively.

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4) There seems to be an increased focus on consumers who are 56 years or older. 

Rocky Mountain Brewing Company’s Pike’s Peak  Wit Beer and Front Range Ginger

are both geared toward the 35 to 55 and the 56+ market. 

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Johansen Brewery has targeted their print advertisement to magazines favored by readers 56 or older.  Alberta Brewing Company’s recent introduction, Old Irish Stout, is targeted toward the 56+ market.

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