Coyote Beer is the oldest brewing company in New Mexico or, at least, the oldest beer brand in New Mexico. During the 1980s, the company went through bankruptcy largely due to its inability to compete with the big national beer brands. In the 1990s, a group of investors purchased the brand name from the bankruptcy court and reincarnated it as a microbrewery with retail locations offering brew pub atmosphere and casual dining. In addition, Coyote Beer distributed its products through specialty liquor stores that offer an extensive assortment of specialty beers, including imported and microbrewery beers. The company currently has 18 brew pub locations and distribution in 243 liquor stores across New Mexico.
The company has experienced solid growth and financial performance over its 12-year history. However, the competitive environment remains tough with the big national brands at one end of the spectrum and other microbreweries and brew pubs at the other end. It is critical that Coyote Beer spend its limited marketing budget in the most efficient manner to drive business to its brew pubs and the sale of its products through liquor stores.
In recent months, the management team at Coyote Beer has been divided in regard to the best marketing strategy for the company. One contingent wants to pursue a strategy based on a low price, relative to import and other microbrews. The other group wants to focus on enhancing the image of Coyote Beer with a focus on its long history in the state of New Mexico and the artisanal nature of its brewing process. The difference of opinion between the two factions has become heated and somewhat divisive. Furthermore, time is running out to get the marketing strategy in place for the coming year.
Toby Green, director of marketing, knows that it is important to make the right decision and to break the deadlock quickly so that the company can move on with its plans and business development activities. He wants to design a test that will settle the issue once and for all in a scientific manner. Coyote Beer has always focused on college markets across the state with a brew pub in the vicinity of every major college in New Mexico. Toby’s research plan calls for testing the price-oriented campaign in one market and the image-oriented campaign in another. The impact on sales in the respective markets will indicate the effectiveness of the two approaches. He faces a number of decisions. First, he is considering using Albuquerque and Las Cruces as the two test markets. They are both established college towns. His logic is that they are both somewhat isolated markets and what Coyote Beer does in these markets will not likely spill over into other areas. Second, there is the question of how long to run the test. Finally, it is necessary to sort out what happens in the two test markets from the general trend for Coyote Beer in the rest of the state.
Chapter 9 explores the use of experimental designs in marketing research and speaks to all these issues.
Now that you have read the chapter, comment on the three designs that might be used: one-short case study, one-group pretest–posttest, and before and after with control group design.
Which design provides a measure of the effects of variables not included in the experiment? Explain how it accomplishes this.
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