Case Study Of Hockley Valley Brewing Co.

Situational Analysis overview
Hockley Valley Brewing Co. founded Hockley Village, Ontario in December 22, 2002 by Tom Smellie. They offer a wide range of craft beers from dark to light with more depth and character than many of their competitors. Their main consumers are craft beer consumers and retailers, such as LCBO and other liquor control commissions. With their commitment and expertise Hockley Dark had become the best-selling dark craft beer in Ontario. As a result, Hockley was named best dark ale at the Canadian and Ontario brewery awards in 2008. Because of the growing popularity of light beers in the market, they are in the stage of launching a brand new product called Hockley classic.

Main SWOT Points related to the issue
Strength:

Problem Analysis
Price strategy: A new product, Hockley Classic is likely to be launched by the company. From financial perspective, it is estimated that the direct cost per unit of producing Hockley classic is approximately $1.62, the same amount with that of current ales, it takes almost twice amount of time producing the new product than the other products. As a result, the production costs is expected to be 50% higher.
For the product placement, As Hockley has discontinued one of its product line, Black and Tan, shelf space in LCBO, the main retailer of Hockley might be saved. With new product introduced to the LCBO, changes of percentage of shelf space that is determined by perceived potential market share, allowed by the retailer is estimated. An annual promotion budget of $50,000 is decided by Miles and Smellie, within the budget plan
Product Promotion: The efficiency of this cost should be reconsidered on the basis of considering the necessity of incurring the cost due to shareholder’s publicity power and the effectiveness of promotion when larger competitors have already dominated the