1. Coors Rocky Mountain Sparkling Water
Lindsay Klasing, William Louey, Ben Mills, Caitlyn Mitryk
MKT Dr Matulich

2. Learning Objectives Identifying market trends
Understand the demand and growth of product
Evaluating proper target market
Marketing research of launching and positioning a new product
Growing product portfolio (diversification)
Pros and cons of branding and brand equity
Understanding differential advantages
Properly describing marketing mix
Lindsay LK

3. Case Review - Background
The Adolph Coors Company was founded by Adolph Coors and Jacob Schueler in Golden, Colorado in 1873
Brewery survived prohibition by selling non-alcoholic malted milk and from the Coors porcelain business
Coors beer: American icon with cult status
Distribution primarily in the U.S. western states until late 1980s
Largest brewing facility in the U.S located in Golden, CO
Owns water rights and utilizes water from natural springs located in Golden, Colorado for its beer
Lindsay LK

4. Case Review - The Market
Projected Bottled Water Market Growth: : 35.1% (still); 15.3% for (carbonated)
Trends: Public fears concerning water safety; increasing competition in market
Alcohol Market: Consumer shift to lower alcohol content and overall consumption
Carbonated Soft Drinks: Public health concerns with consumption
Fitness craze and fad diets
Coors Key Finances:
The bad: -72.0% (decreased net income) - 50% (decreased market valuation of $1B)
The good: 76.2% (increased cash flow)
Lindsay LK

5. Case Review - Action and Results
January 15th, 1990: “Coors Rocky Mountain Sparkling Water”
Released bottled water as diversified growth strategy in 1990
First non-alcoholic beverage since the prohibition
Legendary water source
Using similar name and label of Coors beer confused customers
Coors went through a number of packaging re-designs with its bottled water
Coors cancelled its bottled water trademark in 1997
Lindsay LK

6. Dazed and Confused
Lindsay LK

7. Discussion Question 1-4
Did the Coors name provide positive brand equity to their bottled water product?
Did the marketing data indicate that bottled water would be a trend or a fad?
Did a market opportunity exist for Coors within the field of bottled water?
What marketing missteps did Coors make when they introduced Rocky Mountain Sparkling Water?
Lindsay LK

8. Problem definition
Primary: Despite a burgeoning bottled water market, consumers show limited interest in a sparkling bottled water product from Coors. This is due in part to confusion as to whether product is alcoholic or not. Ineffective marketing efforts resulted in poor positioning of Rocky Mountain Sparkling Water. Secondary: Coors needs to decide whether to invest or divest in their bottled water product. Coors still needs to increase net income.
Ben BM

9. Key Players William Coors- President of Adolph Coors Company
Peter Coors- Chief Executive Officer of Coors Brewing Company
Leo Kiely III- President and Chief Operating Officer of Coors Brewing Company
Alvin Babb- Executive Vice President, Operations and Technology of Coors Brewing Company
William Weintraub- Vice President of Marketing
Robert Klugman- Vice President of Corporate Development
John Recca- Brand Strategist of Coors Brewing Company
Competition in the water industry
U.S market of beverage consumers
Ben BM

10. Coors SWOT
Strengths?
Cait CM

11. Coors Strengths Brand recognition
12 redistribution centers - strong distribution
Coors success in advertising and promotions for existing product portfolio
Coors bottling capabilities and logistics
Coors largest beer market is also the largest bottled water market (California and Texas)
Coors brand associated with "pure rocky mountain spring water"
Consumers recognize Coors brand having pure water supply
Cait CM

12. Coors SWOT
Weaknesses?
Cait CM

13. Coors Weaknesses Lack of strong experience in non-alcoholic beverages
Single point production of bottled water
Alcoholic association with brand name
Traditional water source associated with brewing beer
Cait CM

14. Coors SWOT
Opportunities?
Cait CM

15. Coors Opportunities Large growth in the bottled water market
Large growth in carbonated water segment
New PET packaging available for bottled products
Public fear of tap water safety
Public health trends
Trends towards lower alcohol consumption
Cait CM

16. Coors SWOT
Threats?
Cait CM

17. Coors Threats Alcoholic beverage industry bias
Bottled water could be a fad
Reliance on trains for shipping: train strikes -70% of products via railroad
Major competitors already active in marketplace
Cait CM

18. Can Coors reposition Rocky Mountain Sparkling Water?
Discussion Question 5
Can Coors reposition Rocky Mountain Sparkling Water?
Cait CM

19. Alternative 1: Reposition Rocky Mountain Sparkling Water
Remove Coors branding to lower consumer confusion
New bottle (less beer-like)
Keep glass bottle for differentiation (Like Perrier)
Establish alternative positioning (Cannot compete with Perrier)
Retain existing liquid formulations
Cait CM

20. Alternative 1: Reposition Rocky Mountain Sparkling Water
Advantages
Disadvantages
Ability to change marketing mix to appeal to customers wants/needs
New branding to lower consumer confusion
New bottle will have wider appeal
Coors remains in the bottled water industry
Ability to keep resources already invested in the water
May confuse customers even more
Time it would take to reposition and make changes
Money and effort in changing label and packaging
Opportunity cost of spending time and effort if it does not work out
Cait CM

21. Alternative 2: Increase promotional effort of existing product
Build marketing effort around non-alcoholic beverage message
On-premise sampling (consumers don't need to buy to try)
Coupons and wholesaler discounting
Distance Coors' brand association with strictly malt beverages
Ben BM

22. Alternative 2: Increase promotional effort of existing product
Advantages
Disadvantages
Continuing presence in bottled water market
Utilizing existing Pricing, Product and Place
Keep existing stock at distributors, retailers.
Most cost-effective alternative
Need to shift Coors brand perception, no easy task
Existing consumer anti- alcohol bias
Product may have still need adjustment to sell
Ben BM

23. Discussion Question 6
What differential advantages did Coors possess in the bottled water industry?
Will WL

24. Alternative 3: Introduce a new water product- Switch from bottled carbonated water to bottled still water
Remove Coors branding to lower consumer confusion
Discontinue "Rocky Mountain Sparkling Water"
Introduce "Rocky Mountain Spring Water"
Use plastic bottling to resemble competitor's products
Change packaging from glass to plastic to appeal to on-the-go consumers
Will WL

25. Alternative 3: New water product- Switch from bottled carbonated water to bottled still water
Disadvantages
Advantages
Still water has higher projected growth than carbonated water
More demand for still water
Ability to capitalize on the American health trend
Have "legendary" water source with high perceptions
Natural water is not carbonated-cheaper to produce
Insignificant development costs
Great way to increase net income- low expenses
Consumers may still prefer competitors-market penetration difficult
Consumers may not recognize that the product has changed
Consumers may not want to support a "sin" product company even though Coors branding has been removed
Lost sales from Rocky Mountain Sparkling Water
Will WL

26. Alternative 4: Discontinue Coors Rocky Mountain Sparkling Water
Discontinue distribution
Remove Rocky Mountain Sparkling Water from product portfolio
Focus on alcohol and beer product line
Lindsay LK

27. Alternative 4: Discontinue Coors Rocky Mountain Sparkling Water – focus on core competencies
Advantages
Disadvantages
Discontinue an unprofitable product
Can focus on profitable products and legendary beer
Coors would no longer be as differentiated
Leaving bottled water market
Unable to capitalize on American health trends
Lindsay LK

28. Discussion Question 7
How could Coors have entered the market using an alternative differentiation growth strategy?
Lindsay

29. Selected Alternative:
New water product- Switch from bottled carbonated water to bottled still water
Will WL

30. Implementation
Cait WL

31. Case Update ( )
After a number of re-packaging designs Coors canceled its bottled water trademark in 1997
In 1992 Coors introduced Zima, a clear lightly carbonated beverage as an alterative to the traditional alcohol beverage. Zima was discontinued in 2008
In 2005, Adolph Coors Company merged with Molson Inc. to create the Molson Coors Brewing Company (Creating worlds 5th largest brewer)
In 2008, Molson Coors and SABMiller form a joint venture of MillerCoors
In 2010, Molson Coors announces joint venture with Hebei Si'hai Beer Company of China
Current signature brands: Blue Moon, Carling, Cobra, Coors Light, Keystone Light, MGD 64, Miller High Life, Miller Lite, Molson Canadian, Molson Dry, Molson Export, Molson M, Rickard's Red, Staropramen, Doom Bar
Partner Brands: Aguila, Amstel Light, Cristal, Cusquena, Heineken, Peroni Nastro Azzurro, Pilsner Urquell, Ty Skie, Grolsch, Singha
Cait CM

32. Lessons Learned
Importance of STP (Segmentation, Targeting and Positioning) of a new product- MKT 609
Performing market research is essential when looking to release a new product to accurately forecast products potential success-MKT 612
A company must build products based on consumers wants and needs as well as the company’s mission rather than decision makers opinions- MKT 609
When utilizing growth strategies, it is risky to utilize the diversification option to grow a company's product portfolio-MKT610
A product's logo is critical to the consumer's perception of the product -MKT 612
Proper test marketing in the new product development process- Unit 4 MKT 610
Continuous innovation is essential to compete in the market place- MKT 652
Cait CM