Marketing: Custom Edition for Texas A&M University 17th Edition by William Pride,Ferrell

Exercise 34

New Belgium Brews Up Strong Brand Equity The idea for New Belgium Brewing Company began with a bicycling trip through Belgium, where some of the world's fi nest ales have been brewed for centuries. As Jeff Lebesch, a U.S. electrical engineer, cruised around on a fat-tired mountain bike, he wondered if he could produce such high-quality ales in his home state of Colorado. After returning home, Lebesch began to experiment in his Fort Collins basement. When his home-brewed experiments earned rave reviews from friends, Lebesch and his wife, Kim Jordan, opened New Belgium Brewing (NBB) in 1991. They named their first brew Fat Tire Amber Ale in honor of Lebesch's biking adventure.
Although the overall craft-brewing industry has done well in recent years, with sales growing steadily even during the recent economic downturn, NBB has done even better. Today, NBB is a successful $125 million company that markets 710,000 barrels of ales and pilsners every year. The entrepreneurial company has steadily expanded its distribution throughout the western United States, partnering with regional breweries to produce and sell its fresh-brewed beers in local communities farther and farther from its Colorado headquarters.
The standard product line includes Sunshine Wheat, Blue Paddle Pilsner, Abbey Ale, and 1554 Black Ale, as well as the firm's best seller, the original Fat Tire Amber Ale. NBB also markets seasonal beers, such as Frambozen, released at Thanksgiving and Christmas, and Hoptober, sold during the early fall. The firm occasionally offers one-time only brews-such as LaFolie, a wood-aged beer-that are sold only until the batch runs out.
To reinforce the firm's commitment to old-fashioned brewing quality, NBB's packaging and labels evoke a touch of nostalgia. The Fat Tire label, for example, features an old-style cruiser bike with wide tires, a padded seat, and a basket hanging from the handlebars. All the label and packaging designs were created by the same watercolor artist, Jeff Lebesch's next-door neighbor.
NBB prices its beers to reflect high quality and set the products apart from those of more widely available brands, such as Coors and Budweiser. This pricing strategy conveys the message that the products are special but also keeps them competitive with other microbrews, such as Pete's Wicked Ale and Sierra Nevada. To demonstrate its appreciation for its retailers and business partners, NBB does not sell beer to consumers onsite at the brewery for less than the retailers charge.
Since its founding, NBB's most effective promotion has been via word-of-mouth communication by customers devoted to the brand. The company initially avoided mass advertising, relying instead on small-scale, local promotions, such as print advertisements in alternative magazines, participation in local festivals, and sponsorship of alternative sports events. Through event sponsorships, such as the Tour de Fat, NBB has raised thousands of dollars for various environmental, social, and cycling nonprofit organizations. The company is also a member of 1% for the Planet, donating 1 percent of its annual sales revenue to environmental protection groups around the world.
With expanding distribution, however, the brewery recognized a need to connect more effectively with a far-flung customer base. NBB's top management consulted with Dr. David Holt, an Oxford professor and branding expert. After studying the fast-growing company, Holt, together with NBB's marketing director, drafted a 70-page "manifesto" describing the brand's attributes, character, cultural relevancy, and promise. In particular, Holt identified an ethos of pursuing creative activities simply for the joy of doing them well and in harmony with the natural environment.
With the brand defined, NBB teamed up with Amalgamated, a New York City advertising agency, to help communicate the brand identity. The agency created a $10 million ad campaign targeting high-end beer drinkers among men ages 25 to 44, highlighting the brewery's down-to-earth, whimsical, yet thoughtful image. The grainy ads focused on a man rebuilding a cruiser bike out of used parts and then riding it along pastoral country roads. The product appeared in just five seconds of each ad between the tag lines "Follow Your Folly... Ours Is Beer." In addition to advertising, the company promotes its brand by engaging customers in conversations via social media, such as Twitter, Facebook, and blogs. "One of the biggest messages for craft [beer] is local and variety," says NBB's director of advertising and social media. That's why the brewer has created a series of Facebook pages, one for each of its brands and each market. It also maintains an overall Facebook company page. In all, its pages have more than 400,000 Facebook fans, who each buy an estimated $260 worth of NBB products every year. By investing time and money in social media, the company is spreading the word about its brand and reinforcing brand loyalty among current customers.
NBB's mission is: "To operate a profitable brewery which makes our love and talent manifest." From top-quality brewing to a strong belief in giving back to the local and global community, the company reinforces the positive qualities that make its brand so successful every day.
Assess New Belgium's brand equity in terms of awareness, quality, associations, and loyalty.