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Oland & Sons

Current situation and problem

President of Oland & Son, Halifax, Nova Scotia, had to determine whether he should introduce Oland's schooner beer and ale in the greater Boston Market. Limited growth in existing markets had led to exploring new markets. Boston Market was going to be used a source of increased profit as well as test market.

Strengths

Oland's strength was in the provincial loyalty it had managed to develop within Maritime and a history of brewing beer. It was the largest of regional Canadian breweries, accounting for about 50% (250,000 barrels) of sales in the Maritime region. Prior attempts to expand in other regions of Canada had failed, due to strong provincial loyalties, but could have been possible due to string government regulations in advertising and sales had prevented it from competing outside of its provincial regions in Canada. This could be a completely different story when competing in the in the US markets. It' other strength was in its ale, which accounted for 80% (160,000 barrels) of company sales.

Weaknesses

Oland's strength could also be its weakness - it is basically a regional brand, virtually unknown outside of Maritime. Out of total sales in Maritime region, 80% (200,000 barrels) sales came from the Nova Scotia region where Oland had it's plant and office located, indicating that it was better in performing in region where accessibility to retail outlets was good. Also, it seems like one of the reasons it has done better in Maritime region is because it managed to control its freight costs. Also, it seems like it's strength is in its ale, which accounted for 80% of company sales, where as the market (Greater Boston) it is trying to target is primarily a beer market, with ale having less than 20% share of the market.

Competitors:

Currently all beer exported to United States was controlled by three largest breweries in Canada: Canadian Breweries, Molsons, and Labatts. Oland did not export any beer. Boston market was dominated by 10 large domestic brewers that accounted for 90% of sales. German beers had the largest share (40%) of the imported beer market followed by Dutch. Canadian beers were not perceived to be of the same quality (used by adjectives such as "distinctive" etc.) as European beers, which reflects the taste of the clientele (white collar or with money) that the imported beers have. Although, when compared to American beer like Budweiser, there were no significant preferences when both beer where presented in unidentified glasses. Competing with bigger home brands like Budweiser will be a more challenging than for Oland to create a niche for it's own by competing against it's imported beer counterparts from Europe. As seen from sales data, foreign brewers spent money on magazines like "New Yorker" and national magazines which implied that they were targeting a different profile of customers than the domestic brewers who spent less than 10% on national magazine advertising.

Customers:

Customers can be divided into following categories:

Economic status: Although market research studies showed that of the 50% of adults in US