Coors What's Wrong With Being #3

Coors: What¡¦s Wrong with Being Number Three? 1. Let¡¦s start by defining the concept of production-oriented marketing and where this strategy can be successfully implemented. The production concept states that consumers favor products that are available and highly affordable and that management should therefore focus on improving production, low cost, and distribution efficiency. The concept of production oriented marketing may do well in an environment where demand exceeds supply due to its uniqueness, scarcity or recent creation. It may also be successful in a market where production costs are high and increase in market share is dependable on reducing costs. In the case of Coors, it is evident that the main strategy through 1976 was production oriented. It was up to this point that the strategy no longer helped the company maintained its sensational growth it had experienced during the 60s and early 70s. As mentioned above one of the characteristics of a production concept is production improvement.

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Coors was certainly a follower of this characteristic as Bill Coors stated: ¡§Our top management thrust is on engineering and production¡K. We¡¦re production-oriented. Nobody knows more about production than I do.¡¨ Coors main emphasis was on making a quality beer in terms of processing and raw materials. It used hops that were mostly imported from Germany, rice, Rocky Mountain spring water, and developed an improved strained of barley for malting, which was grown by contract farmers. Pasteurization was eliminated from the beer since taste was affected. Also, considerably effort was taken to prevent any deterioration of flavor in shipping and handling and distributors were required to pull Coors off the shelves in 30 days in order to prevent lost of flavor. Another characteristic of the production-oriented marketing is cost cutting. During the 60s and early 70s Coors total expenditures averaged only one-quarter...