How we applied Blue Ocean Strategy to the beer sector to target non-beer drinkers and create new demand
Our engagement was with one of the largest beer companies globally. The project brief was to work with 4 brand teams to help them redefine their value propositions in line with their customer target, based on their existing customer research data, while “bringing an innovative angle” to the approach.
Although the company had a comprehensive approach to innovation at global level – with clear definitions and measurements of innovation, sound innovation processes and collaboration among countries, one challenge was the
lack of a structured approach of transforming an idea into a market tested value proposition prototype.
The project sponsor also embraced our idea of challenging the teams’ assumptions and beliefs, and to depart from “what they know” to “what they don’t know” and explore “what they don’t know they don’t know”.
We proposed an approach based on Blue Ocean Strategy (developed by INSEAD professors W. Chan Kim and Renée Mauborgne – ranked top 1 global thinker in Thinkers 50), in particular focusing on exploring “non-customers”, as a way to create growth not only from gaining market share from competitors, but also by creating new demand.
More specifically, we led the teams to think about creating value propositions that appeal to different groups of consumers that are currently unaddressed or under-addressed by the beer industry – for example, people who don’t like the taste of beer, women, people who think beer is not a fashionable drink etc.
Although the teams had good (known) customer knowledge, additional insights were gained which needed to be further explored and validated with customer and market realities. Finally, several value proposition prototypes were quickly tested with the target (non)customer groups to maximize the chances of success.
As a result of the process, the teams voted for 15 value proposition prototypes and presented them to the project sponsors. Following the project, the Beer Company launched 6 innovative products in this European country, that helped increase sales and profitability – for example, a local cider brand targeted to women, the first IPA and a new line of radler (shandy).
In addition, a library of valuable market insights, value proposition prototypes and customer experience innovative ideas were produced, ready to be used in the future.
Finally, the project helped the Beer Company strengthen its innovation capabilities, mainly its front-end innovation process, people skills and shift in managers mindset.