GLOBAL MANAGEMENT TRAINEE

Individual Role Play Exercise

GOOD BEER

PARTICIPANT MATERIALS

During this role play simulation, you will be in the role of the manager responsible for
Good Beer Brewing Companys product line. The Brewery has been considering the
introduction of seasonal beers to the current product portfolio. Your team has been
testing marketing a number of seasonal beer products, with the ultimate goal of
identifying two seasonal products to the current product portfolio.

The COO of Good Beer has asked to meet with you today to discuss your
recommendations regarding the two new seasonal products to be added to the current
portfolio, as well as your plans for a marketing campaign to introduce those two new
products. You have 20 minutes to review the attached materials related to this issue.
Following that 20-minute preparation period, you will have 7 minutes to present your
recommendations and plans to the COO, and 8 minutes to respond to questions from
the COO.

Today is May 6th of this year.

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 E-mail
Date: May 4th, This Year
Subject: New Seasonal Products
To: You, Product Portfolio Manager
CC:
From: Chris Ericson, COO Good Beer Brewing Co.

I know that you and your team have been test marketing a number of seasonal products with
the idea of introducing two new seasonal beers to our current product portfolio. I would like to
meet with you on May 6th to discuss your new product recommendations. In preparation for that
meeting, please review the current competitive landscape, data on test market results and
internal operational issues that may impact the new product introduction. During our discussion,
I would also like you to present proposals on a marketing plan to introduce the two new
seasonal products.

The goal of this new product introduction is to increase the total net revenue of our product line
by 28% during this next fiscal year. In achieving this goal you should focus on three important
elements of our business: increasing product volume without exceeding the maximum monthly
capacity of our brewery, increasing market share and increasing profitability. Your performance
will be measured based on your ability to positively impact these three elements.

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 E-mail
Date: May 4th, This Year
Subject: Summary of Current Products
To: You, Manager Product Portfolio
CC:
From: John Wente, General Manager, Good Beer Brewery

Per your request, attached is data related to the products in our current product portfolio. As
you know, our brewery can brew up to 14,000 Hectoliters (HL) of product per month. At the
current time we have excess capacity to add seasonal products, as long as we do not exceed
our current limit of 14,000 HL per month. In the attached data charts, I have provided Sales and
Costs for the last 12 months and Projected Net Revenue for the next 12 months. I have also
provided our current production volumes by product and season.

I am pulling together data on the seasonal products we test marketed, and will be following up
with that information shortly.

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 Data
Uploaded: May 4th, This Year

Subject: Data on Current Products

Access: You, Manager Product Portfolio

Access:

From: John Wente, General Manager, Good Beer Brewery

Sales, Costs and Projected Net Revenue by Product

Current Products Sales Cost Projected Net Revenue

(Last 12 Months) (Last 12 Months) (Next 12 Months)
Golden Ale $1,900,550 $840,455 $1,070,306
Light Lager $3,202,850 $1,335,000 $1,869,992
Wild Brew $987,000 $609,000 $380,609

Current Production In Hectoliters (HL)

By Season and Product

Current Product Fall Winter Spring Summer

Golden Ale 10,500 HL 10,000 HL 11,000 HL 11,250 HL
Light Lager 10,000 HL 9,500 HL 13,000 HL 16,500 HL
Wild Brew 11,000 HL 11,500 HL 9,750 HL 6,000 HL

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 E-mail
Date: May 5th, This Year
Subject: Increasing Ingredient Costs
To: You, Manager Product Portfolio
CC:
From: Tanya Gillespie, Purchasing Manager

I understand that you are considering a number of new seasonal products for inclusion in our
portfolio of products. Therefore, I wanted you to be aware of upcoming increasing in some
ingredient costs, which will impact the costs, and therefore the revenue associated with some of
those new products. I have just received word of these cost increases from our vendors, so
they have not yet been figured into the anticipated revenue (next 12 months) for any of our test
market products.

The prices associated with citrus and berry flavorings will be increasing over and above the
amount we anticipated when we did our cost projections for the next 12 months. These
increases will impact the following products:

Afternoon Ale (which combines a mild citrus flavor with selected spices)
Spring Fever Lime (which has a strong citrus flavor, specifically lime flavoring)
Spring Fever Berry (which as a strong raspberry flavor)

The increase in these fruit flavors will result in a 0.5 percent increase in projected costs for both
Afternoon Ale and Spring Fever Lime, and a 0.25 percent increase in project costs for Spring
Fever Berry. When making decisions about the seasonal products to add to our product
portfolio, I would encourage you to consider the impact of these cost increases on the overall
cost of the product.

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 E-mail
Date: May 5th, This Year
Subject: Test Marketed Products Results
To: You, Manager Product Portfolio
CC:
From: John Wente, General Manager, Good Beer Brewery

As a follow-up to my email from yesterday, I have provided information (in the attached data
tables) regarding the seasonal products that we have been test marketing. The attached data
includes, by product, the target age group, the projected sales, and projected net revenue over
the next 12 months. I have also included a projection of volume, in HL, that would need to be
brewed each season for each product. Keep in mind, our total brewing capacity is 14,000 HL
per month. So, when selecting seasonal products, it is important to select those products that
maximize the volume being produced by the brewery, while ensuring that our total product
portfolio does not exceed our production capacity at any time during the year. I hope this
information is helpful as you prepare for your meeting with Chris.

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 Data
Uploaded: May 5th, This Year

Subject: Data on Test Marketed Products

Access: You, Manager Product Portfolio

Access:

From: John Wente, General Manager, Good Beer Brewery

Target Market and Anticipated Sales and Revenue

By Product

Test Marketed Seasonal Target Age Projected Sales Projected Net Revenue
Product Group (Next 12 Months) (Next 12 Months)
Afternoon Ale 21-25 $990,588 $505,200
Summer Ale 35-55 $1,726,667 $518,000
Spring Fever Lime 25-35 $1,329,411 $452,000
Spring Fever Berry 21-25 $776,250 $310,500
Fall Harvest 56+ $733,333 418,000
Golden Ale: Octoberfest 35-55 $1,137,714 398, 200
Winter Wonderland 25-35 $1,002,500 513145

Wild Brew: Holiday Ale 56+ $1,631,250 522,000

Anticipated Volumes (in Hectoliters) Next 12 Months

By Product and Season

Test Marketed Seasonal Fall Winter Spring Summer

Product
Afternoon Ale 5,000 4,000 4,000 5,850
Summer Ale 5,000 4,000 6,200 7,100
Spring Fever Lime 3,800 3,500 7,000 4,500
Spring Fever Berry 2,300 2,500 4,200 2,350
Fall Harvest 5,500 5,200 3,250 2,400
Golden Ale: Octoberfest 6,500 4,000 2,750 2,200
Winter Wonderland 4,000 6,500 4,000 2,350
Wild Brew: Holiday Ale 6,000 9,000 2,000 1,000

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 E-mail
Date: May 5th, This Year
Subject: Customer Base By Age Group
To: You, Manager Product Portfolio
CC:
From: Laura Callahan, Manager, Sales

Per your request, below I have summarized Good Beers current customer base by age group

21 25 years old: 18%

25 35 years old: 25%
35 55 years old: 30%
56 years old or older 27%

As you can see from the above data, the 21-25 year olds represent the smallest percentage of
our customer based (18%). As a result, Sales has implemented a major push to increase sales
in the 21 -25 age group. As you are considering seasonal products to add to our portfolio, I
hope you will give careful review to the products that target this age group.

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 E-mail
Date: May 6th, This Year
Subject: Customer Base By Age Group
To: You, Manager Product Portfolio
CC:
From: Chris Ericson, COO Good Beer Brewing Co.

As you think about your plans for introducing two new seasonal products into our portfolio of
products, please do not be limited by our traditional methods for marketing products (e.g., radio
and TV spots, print advertising, and billboard and bus stop ads). I want you to develop an
innovative approach to the marketing of these two new seasonal products. I believe that in
order to keep up with changes in media and the delivery of advertising content, we need to find
new ways of promoting our products. I believe that applying new and innovative approaches to
marketing these products is the only way to ensure that we achieve our target of 28% net
revenue growth over last year.

I am working with the Marketing Director to develop a marketing budget for these two new
seasonal products, but at this point I do not want our creativity to be limited by a specific budget
number. Please come to our meeting today with multiple innovative, yet practical, ideas for
marketing the two new seasonal products. Your creative ideas will help us determine the
appropriate budget for these two products.

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 E-mail
Date: May 6th, This Year
Subject: Test Marketed Products Results
To: You, Manager Product Portfolio
CC:
From: Richard Mahon, Manager Competitive Analysis

Since you have been asked to recommend two new seasonal products for our portfolio, I
thought that some information on the competitions actions related to seasonal products might
be of interest. I have provided information on our four largest competitors.

1) In recent months, all four of our competitors focused their product development and their
marketing to focus on the Spring and Summer seasons.

Great Lakes Brewing Company: recently introduced 3 new products specifically

targeted to the Spring and Summer Seasons, Great Lakes Wit Beer (with orange and
coriander flavors), Huron Blueberry Ale, and Superior Ginger Flavor Ale

Jacobsen Brewers have targeted their radio and TV spend on Spring and Summer
Events such as, The Summer Olympics, The World Cup, the All-Star Game (US),
Soccer in selected cities, Cinco de Mayo (Mexico), Canada Day (Canada) The
Fourth of July (US), and Spring Festival (China).

Hudson Brewing Company has followed an approach similar to Jacobsen and is

specifically targeting major sporting events occurring in the spring and summer
months.

Baja Brewing has created two new products: Baja Summer Pilsner, a slightly sweet,
malty and hoppy tasting larger, and Baja Maibock.

2) Both Jacobsen and Baja Brewery have either eliminated fruit flavored beers from their
portfolio or reduced production volume and market spend on those products.

Of the 3 fruit flavored products in their portfolio, Jacobsen has ceased production of
Vanilla Porter, Watermelon Wheat, and reduced production volume of Blueberry Ale
by 25%.

Baja Brewery has two fruit flavored beers in their portfolio. They have eliminated
market funds for the promotion of their Baja Berry Wheat beer. They have also
ceased production of West Coast Peach Wheat beer.

3) All four major competitors are reducing their focus on products geared toward the winter
months. Each of the major competitors plan to reduce the volume they produce of their
winter season beers.

4) There seems to be an increase focus on consumers who are 56 years or older.

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 Great Lakes Huron Blueberry Ale and Superior Ginger are both geared toward the
56+ market.

Both Jacobsen and Baja have targeted their print advertisement to magazines
favored by readers 56 or older.

Hudson has introduced a Pumpkin Ale that is specifically geared to the 56+ market
segment.

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