Hockley Valley Brewing Co. is considering introducing a new lighter lager beer called Hockley Classic to expand their product line. They currently produce award-winning darker craft beers. At a recent festival, their lighter beers outsold darker beers 9 to 1. The marketing plan evaluates 10 alternatives for pricing, distribution channels, and promotion for the new lager. The recommendation is to price Hockley Classic at $2.65 per can and distribute through both LCBO and Beer Stores, allocating $50,000 to promotions including in-store displays, magazines, and festivals. The goal is to double sales and profits by the end of 2014 by appealing to newcomers in the craft beer market with a popular,

1. HOCKEY VALLEY BREWING CO. INC.
Marketing Plan
Date 2017-10-27
Presented by:
Michael, Carstensen
Ghorbani, Negin
Knelsen, Brenda
Lalata, Rachelle
Pratheeharan, Dushyanthy
Schmitz, Nicholas
Tang, Si (Recorder)

2. Executive Summary
Hockley Valley Brewing Co. Inc.has achieved tremendous success in the craftmicrobrewery
industry,a rapidly evolvingand highly competitivesegment of the beer industry. In justeleven
years,craft beers went from justtwo percent of beer sales in Ontario to fivepercent and had an
average annual growth rate of ten percent. Duringthis same period Hockley Valley Brewing Co.
grew from a small startup producingonebeer to an award winningbrewery offering five
different brews through LCBO and Beer Stores and restaurants throughout the province.
The success of the company is based on creating a superior quality productthat has a taste and
character that is unique. The company’s founder Tom Smellie, grew the business by building
strong relationships with customers and suppliers,makingsmartbusiness decisionsand strategic
marketing.
The next step in expandingthe business thatis beingconsidered is to introducea new brew, a
lighter lager than anythingthey have previously offered. This idea was the resultof the feedback
and sales results ata festival where sales of their lighter ales outsold the darker brews by nine to
one. The marketing plan alternatives in bringingthis newproduct to market include:
Alterative 1 - Price2.55 - Low costleader High Penetration
Alternative 2 - Price2.65 - Low costleader match majority of other product lines
Alternative 3 - Price2.75 - Low costleader Premium product premium price
Alternative 4 - Price2.85 - Match competitor premium product premium price
Alternative 5 - Distribution LCBO - Lower CM higher break evens
Alternative 6 - Distribution Beer Store - Higher CM lower break evens
Alternative 7 - Distribution LCBO and Beer Store - High penetration with mix of CMs
Alternative 8 - Promotion - Social Media - Limited to one alternative.Costs incurred
come out of $50,000 budget.
Alternative 9 - Promotion - Exhibit5 mix of options likely to hittarget market budget of
$50,000
Alternative 10 - Promotion - Exhibit5 and social media combined.Budget $50,000
Our recommendation is to offer Hockley Classicata retail priceof $2.65 for salein both LCBO
and Beer Stores. The marketing plan will havea budget of $50,000 allocated between i n-store
displays,hay balewraps,feature spots in LCBO magazine, billboards,Toronto Life Magazineand
at festivals and shows.
Hockley Classic should bea popular brew that will gain popularity through word of mouth and
repeat business. Followingthe custom of producinga top quality productwith superior tastewill
ensure that the company achieves its goal of doublingsales and profits beforethe end of 2014.

3. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 3
ProblemStatements
Hockley Valley Brewing Co. Inc.has focused on producingales and lagers,and has had great success with
their darker beers. At a recent festival celebratingthe 150th anniversary of the town of Orangeville,
Hockley was the solebeer supplier,and found that the lighter Hockley products were out-sellingthe
darker beers nineto one. This made Miles and Smellierethink their product offerings and consider adding
a lightcraft lager to the line.
Adding a lager would require a new production process that would increaseproduction time and costs
sincea lager takes four to six weeks to ferment compare to the ten to fourteen days their ales take to
ferment. Itwould also mean entering into directcompetition with two largebreweries who have
dominated the craft lager market for many years. Entering this market and achievingsuccess against
these strong competitors could be difficult. Miles and Smelliealso need to figure out how to promote,
distribute,and pricethis new product.
Company Objectives
Tom Smellieand Andrew Kohnen began Hockley Valley Brewing to make beers that tasted better and had
more depth and character thatwhat was available.They arepassionateaboutquality and offeringa
product that is superior,and their focus has been on ales, particularly darker varieties.
Recently the company has improved efficiencies in its brewingprocess and invested in capital
improvements that will allowproduction to double. Hockley plans to expand their productofferings and
increasesales and market sharein the craftbeer market.
Company Background
The Hockley Valley Brewing Co. began in 2002 as a small brewery in Hockley Village,Ontario by Tom
Smellieand brewmaster Andrew Kohnen offering one lightalecalled Hockley Gold. It was the first
microbrewery in Ontario and quickly grew in popularity and reputation. Two years later,they introduced a
dark alethat quickly becamethe best-sellingdark craftbeer in Ontario and won the award for Best Dark
Ale in 2008.
Operations expanded and the brewery moved to a larger facility in Orangevillein 2008. The new location
offered additional production ability,but did not have a location thatwas conduciveto operating a brew
pub and had limited store front presence.
In 2012,Hockley added a new majority shareholder to the team who added business experienceas well as
the opportunity for promotion through a newspaper publishingcompany that the new shareholder also
owned.
The brand grew to includefivedifferent products that are availableatLCBO stores and boutique Beer
Stores in Ontario,as well as Alberta, Manitoba and PrinceEdward Island. In 2013,theOrangevillebrewery
was improved to be able to handletwice the production and grow the business.
SituationAnalysis
Strengths (internal factor)
 Hockley was the firstmicrobrewery in Ontario,and only the second in Canada,to produce its craftbeer in
cans
 Their beer products in cans were more environmentally friendly,easier to move and store, superior in
maintainingfreshness and faster to chill.

4. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 4
 Because their beer products arepackaged in cans,Hockley would not have to sourceits bottles through
the Beer Store, which controlled the supply of bottles to Ontario breweries.
 One of their products the “Hockley Dark” is the most popular and became the best-sellingdark craftbeer
in Ontario.
 Hockley Dark was also named as the Best Dark Ale at the Canadian and Ontario Brewery.
 Hockley has been recognized as a premium microbrewer of dark beer
 The company had been ableto sell as much beer as itcan produce
 Operatingat only 50% capacity
 Reduced advertisingcosts dueto the shareholder’s ownership of a publishingcompany
 Positiverelationship with LCBO
Weaknesses(internal factor)
 They are not the “firstone” in the market
 Expert in brewing dark beer compared to lightbeer
 Currently not offering lightbeer products that can compete with other lighter craftbeers
 Hockley has to replaceone of their products to launch a new lightbeer product
 Proposed lager “Hockley Classic”needs more time fermenting than ales currently beingproduced which
would increasethe company’s production time and costs
 Factory production costs for proposed lager would be approximately 50%compared to producingthe ales
they currently have
 Their brewing facility is located in an industrial complex and did not have a brewpub. As a result,minimal
sales were made at the brewery’s storefront
Opportunities(external factor)
 Penetrate the market for lightbeer products
 Take advantageof their remainingcapacity
 Potential increasein revenue due to launchingnew lightbeer product
 Be known as the Best Light Ale at the Canadian and Ontario Brewery.
 Set the best priceof the new product and meet target volume and sales as breweries aregiven control by
the government over the pricethey wanted the end consumer to pay
 Learn how to ferment lighter ales and educate staff
 Offer products not only in Ontario but to other areas all over Canada
 Improve product mix by replacingoneof their products by replacingwith a better one
Threats (external factor)
 Hockley competes nearly 150 different brands of craft beers sold in Ontario
 Potential shiftin market trend, consumers may not be that interested in craftbeers
 Economic downturns that can affect consumer’s buyingdecisions,they might go for cheaper alternatives
 Lighter beer may only be seasonal products and can only meet its target sales duringthe summer months
 Consumers may not likethe taste of their new product
 Their proposed product launch may not be successful and as a result,they might incur losses on top of the
sales lostfor replacingthenew beer with their current product.

5. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 5
Market Analysis
In 2012, Ontario’s craftbeer amounted $210 million in sales.Craftbeer is gainingits popularity and
awareness.In 2012, craftbeer only represented 2% in volume in Ontario.By 2013,the number had more
than doubled to 5%. In LCBO, craft beer sales was thehighest growth. Craft beer averaged 10% growth in
other retail channels annually.
The growing demand for craftbeer is supported by numerous craft beer events that are completely sold
out (see Exhibit1). For example, the Toronto Craft Beer Festival held at Ontario Placesold out entrance
tickets as high as $30 in 2017 (Sloan & Fleming, 2017).Local newspaper and magazines are also very eager
to publish thesecraftbeer events. For example, Georgetown CraftBeer Festival is published in The
Observers (Boughner, 2017), and London’s Forest City Beer Fest was certainly covered extensively by CBC
London sayingthatthe scene of the event was “exploding” (Butler, 2017). Across Ontario,there are craft
beer events, festivals,and other food related festivals such as rib festbased on the search results on
Festivals & Events Ontario.
Accordingto Financial Post,“The number of Canadian craftbreweries grew to 520 in 2014,up from 88 in
2006.Craft beer is clearly a growingindustry,butit’s still niche,with about 10 per cent market share.That
compares with Anheuser-Busch InBev and Molson Coors,which have about 43 and 35 per cent market
sharerespectively” (Casey,2016).

6. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 6
Segmentation
Segment # 1 2 3 4 5
Name Newcomers Fans Connoisseurs Big Spenders Thrifty
Qualifying
dimensions
Who? 19-30 year olds
Trusting, repeat
customers
Beer enthusiasts
High income
individuals
Price-conscious
individuals
What?
Domestic,
affordablebeer
Domestic,
unique, quality
beer
Tasty, quality,
reputable beer
High quality,
tried-and-true
beer
Affordable beer
When?
- Occasionally
- At social events
- Regularly
- At social
events/festivals
- When dining
- At home
- Regularly
- At social
events/festivals
- When dining
- At home
- Occasionally
- At social events
- Moderately
- At social events
Where?
Bars,
restaurants,
liquor stores
(LCBO, The Beer
Store)
Festivals,bars,
restaurants,
liquor stores
(LCBO, The Beer
Store)
Festivals,bars,
restaurants,
liquor stores
(LCBO, The Beer
Store)
- Restaurants,
bars,liquor
stores (LCBO,
The Beer Store)
Liquor stores
(LCBO, The Beer
Store)
Why?
- The experience
- To unwind
- Taste
-Trust in the
brand
- Taste and
quality
- The experience
- Trust in the
brand,taste and
quality
- The experience
- Prestige
- The experience
- Taste and
quality
- The experience
- To unwind
How?
- Nights out
- At events
- Dining
- Refreshment
- At events
- Dining
- Casual drinking
- Refreshment
- At events
- Dining
- Casual drinking
- Refreshment
- At events
- Fine dining
- Nights out
- At events
- Casual drinking
Segment
size
10% 40% 30% 15% 5%
Determining
dimensions
Benefits
sought
- Taste
- Quality
- Price
- Taste
- Quality
- Brand
- Taste
- Quality
- Taste
- Quality
- Status
- Affordability
Usage rate Moderate Frequent Frequent Occasional Frequent
What is the targeted market?
The target market is the Newcomers segment. These consumers are more likely to try and enjoy Hockley
Classic compared to Hockley’s other products. This particular group is relatively new to the beer-drinking
experience and their potential to be adventurous could be greatly beneficial to Hockley when launching
their new product.
What is their current market?
HVB’s current market is primarily the Newcomers and the Fans,per the segmentation table. Fans are
repeat customers, whileNewcomers area growing segment.
What is their potential market?

7. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 7
HVB’s potential market is largely theConnoisseurs.This segment may enjoy the quality and tasteof
Hockley’s products and opt to chooseit over other domestic brews.
Competitive Analysis
HVB is facingcompetitors in various levels.Thesecompetitors includelargebrewery (Anheuser-Busch
inBev, and Molson),regional craftbrewery (Co-op, Boulevard Brewing, Magic Hat Brewing), and
microbrewery (HBV, Famery Estate, Half Pints).
Large brewery benefit from its popularity,production scale,promotions,and logistics,resultingin lower
price.For example, recent Budweiser 48 cans pack is sellingat$75 (which averages at $1.56 per 355 ml
aluminumcan) at Manitoba Liquor Mart, located atthe entrance, and can be replenished easily.Large
brewery takes 91% of the beer market sharein 2014 (Financial Post,2015).Their advertisingbudget is
immensely larger than regional brewery and microbrewery. For example, Budweiser can advertisetheir
product duringSuper Bowl seasons,major TV channels,and YouTube.
Regional brewery also benefit from its advantageabove, but in a smaller scale.Itgenerally does its
promotion through local stores.In Alberta, Co-op brand, which owns Co-op gas station,supermarket, and
agricultural services,operates CO-OP wine, spirits,beer brand,where co-op beer is placed in noticeable
locations.Albertans havea strong preference towards their locally owned beer, thus, making the brand
popular.
Microbrewery has increased in numbers in recent years, especially thosewith less than 2000 hectolitres
has increased from210 in 2009 to 350 breweries in 2014 due to popular demand and the trend to return
to locally brewed beers; breweries between 2001 and 5000 hectolitres had doubled by 2014,comparing
to 2009,from 30 breweries to 70 (Financial Post,2015).
Competitive Analysis Table
Name Sugar (g/L) Alcohol (%) Style Volume (ml) Price
Hockley Classic 2 5 Light, malty 473 2.75
Coors Banquet N/A 5 Light, malty 473 2.70
Molson CDN N/A 5 Light, malty 473 2.55
PabstBlue Ribbon N/A 5 Light, malty 473 2.10
Mill Street Original
Organic Lager
N/A 4.2 Light, floral 473 3.15
Steam Whistle N/A 5 Medium, hoppy 473 3.00
Positioningtable
Quality Steam W Mill St.
HVB
Molson Coors
Price
Pabst
Craft beer’s popularity gain was due to the followingreasons:

8. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 8
First,consumers are lookingfor new ways to experience the beer. They are lookingfor new taste and feel.
Second, breweries are constantly lookingfor ways for consumers to come back for more. Microbreweries
have the ability to switch flavours and come up with new flavours easily. Third,shiftin social trend
created the demand for craftbeer. As more emphasis is puton locally produced vegetable, meat, and
fruits,locally produced beer is also hitchinga ride.Forth, the introduction of craftbeer in local events
further promoted its popularity,as locally brewed beer is easier to transport (Durisin,2013).
Financial Analysis
The choiceof priceand distribution channelswill havevaryingresultson the required amount of sales in
units to break even for the new Hockley Classic lager.The LCBO has recommended a sale priceof $2.55
per can. Hockley’s current product mix is fiveproducts.Of these five products,one is sold at$2.75 per can,
one is sold at$2.55 per can,and three are sold at$2.65 per can.The competitors’ products areboth sold
at $2.85 per can.Analysis hasbeen completed on four different pricepoints rangingfrom $2.55 to $2.85
per can. All of the analysisassumes thatthe $50,000 annual promotion budget will be spent in full.
If the LCBO recommended sales priceof $2.55 is utilized,and the only di stribution channel used was the
LCBO, it would resultin a contribution margin of $.59 per can.With this contribution margin itwould
require 84,709 cans of beer to be sold to break even. If this pricewas utilized and the only distribution
channel used was The Beer Store, the contribution margin per can would be $.87 per can and 76,658 cans
of beer would need to be sold to break even. If both distribution channels areutilized the combined
breakeven would be 103,945 units.
Should the pricebe set at $2.65 to match a majority of the other Hockley products then it would require
less unitsales to break even for each distribution scenario.The contribution margin for LCBO sales would
be $.68 and for Beer Store sales would be $.97. If only the LCBO was chosen for distribution break even
unit sales would be73,692 units.The Beer Store only distribution break even sales in units would be
68,814 units.Total units of 90,960 would be required to be sold to breakeven if both distribution channels
are utilized.
The Hockley dark aleis set a premium priceof $2.75 compared to the other products in the product mix.
If this same priceis chosen for the new Hockley Classic itwould providefor a contribution margin of .77
for LCBO sales and $1.07 for Beer Store sales.The break-even unit sales for the LCBO only distribution at
this priceis 65,211 units.If the Beer Store only is chosen,it would requiresales of $62,427.The combined
distribution channel break-even is 80,876 units.
The lastpricingoption is to match the competitors’ priceof $2.85. This option presents the best
contribution margins and lowestbreak even unit sales.The contribution margin for LCBO sales is $.85 and
for the Beer Store is $1.17.If distribution is only through the LCBO, the required number of unitsales to
break even would be 58,480 units.If the Beer Store is the only distribution channel chosen,then 57,125
units would need to be sold to break even. The combined break even for both distribution channelswould
be 72,815 units.
Key Factors
Key Opportunities
 Proven lightbeer demand
 Shift to craft beer in trend
 Focus,learn and perfect the fermenting of Hockley Classic to be ableto offer a productthat is superior,
with more depth and character compared to other popular North American lagers.

9. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 9
 Launch the new product “Hockley Classic”to meet their goals of expanding their product offerings and
increasetheir sales and market sharein the craftbeer market.
Key SuccessFactors
 Product Awareness
 Review Product, Pricing,Placement and Promotion and ensure that is aligned with the overall goals and
objectives of the company
 Review customer feedback to assistin improvingthenew product
 Hockley’s positiverelationship with other partners such as LCBO
Key Uncertainties
 Competitive Reaction
 Consumer Acceptance
 Possibility of not meeting company’s goal of doublingits output and sales by the end of 2014
 Hockley may not be viewed as one of the premium microbrewers of lightbeer as they are in dark beers.
Alternatives
1 – Set the price of Hockley Classicat $2.55 per can
This new lager,Hockley Classic,will bein the introduction stageof the productlifestyle.It is importantin
this stage to set a pricethat will achievethe goals of the company. The LCBO has recommended a priceof
$2.55, which is the same priceas the Georgian Bay Beer. The ultimate goal of any new product is to gain
awareness and increasemarket penetration.
The competitors both have prices of $2.85 per can.The pricedifference between a 6 pack of cans for the
competitors would be $17.10 compared to $15.30 for Hockley Classic.The total cost for a 12 pack of cans
would then be $34.20 for the competitor compared to $30.60 for a 12 pack of Hockley. When the
consumer is makingtheir purchasedecision this pricedifferenceis sureto influencetheir purchase
decision.
Pros:
 Will attractcustomers from directcompetitors
 Will help to gain market shareand move through introduction stage faster
 May attractcustomers from larger competitors’ such as Molson and Labatt
 Larger pricedifferences for higher unit volumes
Cons:
 Low contribution margins to offset higher production costs of lager compared to ale
 Will resultin a high break-even in unit sales of over 100,000 units for combined distribution
 Pricemay resultin negative perception, cheap beer vs quality beer
 May cannibalizesales of Georgian Bay product line
2 – Set the price of Hockley Classicat $2.65 per can
If Hockley were to set the priceper can at $2.65 it would be the same as three out of its five products in
its current product mix. The Black and Tan beer that is goingto be discontinued also sold for $2.65.This
priceis something that current Hockley customers have become accustomed to for most of their
products.
This priceis still cheaper than the competitors’ prices of $2.85 per can. The pricedifference between a 6
pack of cans atthis pricewould be $17.10 for the competitors compared to $15.90 for Hockley. The price
difference between a 12 pack of cans atthis pricewould be $34.20 for the competitors and $31.80 for
Hockley if they set it at $2.65 per can.

10. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 10
Pros:
 Less likely to cannibalizeGeorgian Bay sales
 Pricewill attractcustomers from direct competitors
 Combined distribution breakeven is approximately 90,000 units
 Smallestunitof packagingstill has significantpricedifference
Cons:
 May not attract customers from larger competitors likeMolson and Labatt
 Doesn’t differentiate the quality of the lager within Hockley productmix
 May cannibalizesales of Hockley 100 and Hockley Amber, both lightbeers
3 – Set the price of Hockley Classicat $2.75 per can
The priceof $2.75 per can would be the sameas Hockley Dark. This was the quality productthat many
customers who have been loyal to Hockley have continued to demand from the company for year. Even
though sales of lightbeer compared to dark beer are 9 to 1 this producthas created brand loyalty for the
company.
This pricewould still becheaper than the competitors’ priceof $2.85 per can. The pricedifference
between a 6 pack of cans at this pricewould be $17.10 for the competitors compared to $16.50 for
Hockley. The pricedifference between a 12 pack of cans atthis pricewould be $34.20 for the competitors
and $33 for Hockley if they set itat $2.75 per can.
Pros:
 Round number for 12 packs
 Reflects a premium Hockley product for a premium price
 Contribution margins availableto offset higher production costs
 Breakeven in units for both channels combined is 80,870 units
Cons:
 May cannibalizesales of Hockley Dark
 Unlikely to draw sales fromcompetitors products
 Pricedifference in smallestunitof packagingis minimal
4 – Set the price of Hockley Classicat $2.85
The priceof $2.85 per can would be higher than any pricethat Hockley currently has in their product mix.
This pricewould be equal to that of their competitors for this new product. The main goal of when a
product is in the introduction stage is to gain awareness.By setting a pricethat is exactly the same as the
competition Hockley would fail to gain any product awareness within the current market.
Pros:
 High contribution margins through both channels
 Low combined distribution break even with unit sales of 72,815
 Reflects a premium Hockley product for a premium price
Cons:
 Unlikely to draw sales fromcompetitors products
 Unlikely to reach break-even sales
 High risk of product failure

11. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 11
5 – Distribute HockleyClassic through LCBO
Hockley currently utilizes the LCBO to distributeall of its products.Over the pastHockley has developed
good relationshipswith the LCBO and usually has no troublehave their beers placed in the LCBO.
Whenever a new LCBO is approached to carry their products the store managers have already heard
about the Hockley brand and are eager to stock their products should they have the space.
The LCBO charges a levy of 11% on sales.This levy equates to $.29 per can of aleat a priceof $2.65. There
are no stockingfees for Hockley products when they are placed for salein the LCBO. The relationship with
the LCBO is an importantone for Hockley and the saleof its products.
Pros:
 Large distribution network with over 634 retail stores
 Levy is flexibleas it’s based on sales
 Brand awareness within the LCBO stores
 Reaches multipletarget markets
Cons:
 Reduced contribution margin per unit due to levy
 Products can be bumped from shelves at others discretion
 Requires high volume sales to break even
6 – Distribute HockleyClassic through the Beer Store
The Beer Store is operated by two of the largestbrewers in North America. These brewers are Molson and
Labatt and they are ultimately the competition of Hockley. There are 50 Beer Stores and to placeproducts
in The Beer Store it requires a one-time fee of $3,000 and a fee of $275 for each store that you wish to sell
your product.
The Beer Store is placewhere more refined beer drinkers go to view and ultimately try different and new
beer products.Hockley currently utilizes the Beer Store to sell taster packs thatincludedifferent Hockley
products in their product mix.
Pros:
 Many shoppers that are willingto try new products
 One time fees resultin higher contribution margin per unit
 Can easily substituteHockley classic into taster pack
Cons:
 Limited exposure
 May offend the LCBO that they are not chosen
 One time fees requires higher number to break even through this channel
7 – Distribute HockleyClassic through both the LCBO and The BeerStore
Hockley currently utilizes both the LCBO and The Beer Store to sell their products.By utilizingboth of
these distribution channelsithelps to create as much awareness for the Hockley products as possible.
As mentioned above, the LCBO has a variableratefee in the form of a levy and the Beer Store has a fixed
rate one-time fee per company and per store. Hockley has the flexibility to calculatebreak evens per each
distribution channel aswell as incremental break even to come up with the total amount required to
break even.

12. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 12
Pros:
 Able to target various markets
 Combination of fixed and variableexpenses
 Creates more brand awareness
Cons:
 Requires higher sales to breakeven
 Individualsmay purchasethrough LCBO more frequently which is a lower contribution margin
 Taster packs prevent higher individual unitsales where contribution margins arehigher
8 – Promotion via social media
Social media collectuses’behaviours (likes,dislikes,posts,groups,and etc.) and recommend relevant
information back to the users.The resultwould be highly targeted potential customers instead of
broadcastinginformation to the general public.The cost, though manageableat the beginning, could
balloon as moreand more users click on the advertisements.
Facebook has tiered targets based on costs per posts. $5 for 900 to 1800 reaches; $10 for 1900 to 3500;
$15 for 2800 to 5200;$20 for 3700 to 7000; $50 for 10000 to 18000;and $75 for 13000 – 24000 (Dice,
2012).
Google Ad words has averagecost per click between 1USD to 2USD. Depending on the budget, itcould
range from $100 to no ceilingper month. However, users areallowed to set a ceiling (Shewan, 2017).
Another option was to hire a social media manager.However, the salary alonehas already taken up most
of the marketing budget. Year salary could rangefrom$45260 to $6100 USD (Washenko, 2014)
Pros:
 Reach rightpeople at the righttime
 Saves time and effort in promotion
 Startingat a very affordablebudget
 Effectively reach target audience
 Able to choose specific geographic areas
Cons:
 Will costmorein order to reach more audience
 Invalid clicks will hurtadvertisingbudget
 Does not reach customers who don’t use internet
 Advertisingmessage could be blocked by those internet savvy users
9 – Promotion basedon traditional selectionsonExhibit 5
Traditional media such as printand billboards aregenerally passivemessageconveyor - viewers are fed by
what they see. Subliminal and creativemessages had been very successful in thepast. For example, yearly
holiday season campaigns led by LCBO encourage drivers not to drink and drive in many crea tiveway.
MADD posts a billboard with a funeral car,policecruiser,firetruck,and paramedic truck to send a
subliminal messageto the drivers. In store display,for example, can have an effect on convincinga
customer to buy Hockley Classicwhilehewas lookingfor a lightbeer to drink.
Pros:
 Wide reach to general public regardless of interest
 Multiplepromotion mix to convincecustomers to take action
 Great for market exposure

13. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 13
 Real look and feel on traditional advertising
Cons:
 Measurement method cannotbe tracked accurately
 HVB must spend additional time,money, and effort in designingthe message
 Very hard to target audience
 Limited information conveyed in the message
 Lack of flexibility onceprinted
10 – Promotionbased both social mediaand traditional media
Combing with both traditional printmedia with social media advertisingcan haveforce multiplyingeffect
as you can have the best from both world. Potential customers areexposed to HVB’s promotion in both
real and virtual world, reinforcingthe belief that Hockley Classic would make the idea choice.For
example, Coca Cola puts up a billboard to encourage consumers to buy coke with their or their friends’
names, and ask them to use hashtags on the social media.
HVB can be more personal whilebeinggeneric should itdecided to go ahead with usingboth. The
traditional media can reach a broad base.With the help of social media,the message has been reinforced.
Pros:
 Being both passiveand activemessageconveyers at the same time
 Broad base broadcastand ableto be personalized
 Being ableto reach both internet users and non-users
Cons:
 Unable to balanceboth world
 Uncertainty as to which sideto put more efforts on
11 - Status Quo
HVB will continueto operate within its current territories (Orangevilleand Georgian Bay area) with its
dark beer leadingits productline.It will maintain its outputcapacity of 50% without any supportfrom
brewpub. As the number of independent breweries sprawlingacrossNorth America, HVB remains static.
HVB could only remain static for limited time, as lager did showits popularity and there was demand on
this type of lightbeer. HVB could try to get more involved in celebration events and then take next course
of action.
Pros:
 Remain profitabledue to its dark beer’s popularity
 No need to worry about the potential failurecaused by new product launch
 Saves marketing budget
 Reserves production capacity for future productshuffleand development
 More time to observe current market trend
Cons:
 Lost opportunity in seizingthis growingmarket
 Lost of competitive advantage againstmulti-national,regional,and local breweries
 Continue wasting50% of the output capacity which could havebeen better utilized

14. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 14
Recommendations
Our recommendation is for Hockley to launch the Hockey classic atthe pri ceof $2.65, by utilizingboth
LCBO and Beer store with the traditional based promotion.
Sincethe productpriceis $2.65 which is lower than the competitor’s price,this will lead to high
penetration. In addition,this pricematch majority of Hockley vall ey’s other productlineranging$2.55 to
$2.75. As such,this product may lead to gain a market shareand gain consumer awareness which will lead
to brand recognition.Since, Hockley’s other product has created good impactwith the consumers,
launchingHockley classic atthis pricewill attractthe consumers from direct competitors.
Hockley currently utilizes both the LCBO and The Beer Store to sell their products.By utilizingboth of
these distribution channelsithelps to create as much awareness for the Hockley products as possible.The
LCBO is well known government owned agency that operated 634 retail stores through the provicnce.it
was one of the world’s largestbuyers and sellers of beverage alcohol and offered a variety of beers from
all over the world. Currently, Hockley has builta strong relationship with LCBO, selectingLCBO as a
distribution channel to its new product could easily reach the consumers.LCBO has a variableratefee in
the form of a levy and the Beer Store has a fixed rate one-time fee per company and per store. Beer store
are mostly everywhere across theprovince,choosingbeer store as a distributional channel for Hockley
classiccan easily targetto rural area consumers.
Hockley has annual promotion budget of $50,000 for Hockley classic.By utilizingtraditional based
promotion, Hockley can widely reach general public regardlessof their interest. Since Hockley use LCBO
as their distribution channel,there is a possibility of usingLCBO’s magazine and store display for the
promotion of new product. The budget will cover these costs and will haveexcess that can be used for
additional promotional expenses.
Alternative 1 set the priceof Hockley Classic at$2.55 is notrecommended as this pricewill lead high
break-even in unit sales of over 100,000 units for combined distribution.Setting the priceat 2.55 may
resultin negative perception.
It is not recommended alternative3 and 4, because the prices arehigh and itmay not reach to the
consumers.Generally, launchingnewproduct with lower pricehas higher chanceof gainingconsumer
market. Also, the breakeven units arelow when the prices arehigh (at 2.75 the breakeven units are
65,211 and at2.85 breakeven units are 58,480) compare to prices at 2.65.
Only sellingthrough LCBO or Beer store is notrecommended. If Hockley would select either LCBO or Beer
store as its distribution channel,itmay only cover certain group of consumers.
Alternatives 8 and 10 are not recommended as well sincethe promotional costmay higher than allocated
promotional budget of $50,000 for Hockley classic.
Status quo is not a recommendation.
ActionPlan
Date Item Description
Immediately Product Development Brewmaster – develop recipes and produce test batches for
tastingand approval
Immediately Check with marketing
department
Make surecan design and graphics arein progress/finalized

15. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 15
Immediately Check with production team Ensure equipment and personnel are availableto begin
production as soon as recipeis finalized
Immediately Production Personnel and
Equipment
Order any new equipment and supplies thatwill beneeded,
have HR begin plan for new hires that will berequired
Immediately Touch Base with LCBO and
Beer Store
Begin process of placingnewproduct in stores
Immediately AdvertisingCampaign Have the marketing team startworking up printads,online
ads and signageand plan social media campaigns
Immediately Plan Launch Set a tentative date for product launch,plan launch
party/event
3 Weeks Packaging Order cans,boxes and other packagingsupplies
6 Weeks Social Media Start teaser ads on all social media platforms
6 Weeks Product Approval Taste test batches and decide on production recipe
7 Weeks Production Begin production of new product
10 Weeks Social Media Start teaser ads on all social media platforms
10 Weeks FinalizeAdvertising Review materials for all advertisingcampaigns,book space
for printads,finalizecontracts with farmers for balewraps
10 Weeks Order AdvertisingMaterials Order signage,balewraps,coasters,posters and all printed
promotional material
12 Weeks FinalizeProductPlacement Ensure LCBO and Beer Store contracts are in place
12 Weeks Arrange Distribution Contact truckingcompany and book firstproductshipments
12 Weeks Analyze Social Media Review analyticsand feedback from social media exposureto
date
12 Weeks Launch Event Finalizedetailsfor launch event, get promotional materials
and signageto LCBO and Beer Stores
13 Weeks Launch Ship product to stores,set up productdisplaysand signagein
store, host launch event, start all advertisingcampaigns
15 Weeks Evaluation Review first2 weeks sales and consumer responseon all
social media platforms
16 Weeks Changes Plan and implement any improvements to marketing plan
and promotional materials
17 Weeks AdvertisingCampaign Launch second phase of advertisingcampaignsincorporating
any change identified
Contingency
In the event that Hockley Classicfallsbelowprojected sales targets in the first3 months of production,
the recommended courseof action would be to reduce the retail priceto the LCBO’s suggested $2.55.
The hope would be that the bargain pricewould be incentivefor a larger proportion of beer consumers to
try the new product. In addition, setting pricingat$2.65 enables HVB to run sales campaign without
hurting much of its profitmargin.
Along with the reduced price,we would recommend increasingthenumber of festivals attended where
the hope would again bethat once a consumer tastes the product they will become a fan and a repeat
customer. The social media platforms could beused to conduct contests and gain some lowcost
exposure.
Finally,if theproduct fails to have a positivecontribution to the achievement of goals,the product would
be pulled from the product lineand focus be placed on promoting the proven products.

16. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 16

17. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 17
Appendix
Exhibit 1 – A popular craft beer event being sold out

18. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 18
Exhibit 2 – Number of breweries by volume
Option 1 Option 2 Option 3 Option 4
LCBO Recommended
Match LightProduct
Line
Match
Dark Match Competitor
Sale Price
$
2.55
$
2.65
$
2.75
$
2.85
Beer
(Ingredients)
$
0.33
$
0.33
$
0.33
$
0.33
Packaging
$
0.28
$
0.28
$
0.28
$
0.28
Factory
Production
Costs
$
1.05
$
1.05
$
1.05
$
1.05
Excise Tax
$
0.02
$
0.02
$
0.02
$
0.02
Provincial
Levy
$
0.28
$
0.29
$
0.30
$
0.31
Total Cost
$
1.96
$
1.97
$
1.98
$
2.00
Contribution
Margin LCBO
$
0.59
$
0.68
$
0.77
$
0.85
Annual
Marketing
Costs $50,000

19. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 19
Breakevenin
Units 84,709 73,692 65,211 58,480
Exhibit 3 – Break even analysis by sale at LCBO
Option 1 Option 2 Option 3 Option 4
LCBO Recommended
Match LightProduct
Line
Match
Dark Match Competitor
Sale Price
$
2.55
$
2.65
$
2.75
$
2.85
Beer
(Ingredients)
$
0.33
$
0.33
$
0.33
$
0.33
Packaging
$
0.28
$
0.28
$
0.28
$
0.28
Factory
ProductionCosts
$
1.05
$
1.05
$
1.05
$
1.05
Excise Tax
$
0.02
$
0.02
$
0.02
$
0.02
Total Cost
$
1.68
$
1.68
$
1.68
$
1.68
Contribution
Margin Beer
Store
$
0.87
$
0.97
$
1.07
$
1.17
Annual
MarketingCosts
$
50,000
BeerStore Fees
$
16,750
Total Costs
$
66,750
BreakEven in
Units(All costs) 76,658 68,814 62,427 57,125
BreakEven in
Units(Channel
Costs) 19,236 17,268 15,665 14,335

20. Hockley Valley Brewing Co. Inc
11/23/2017 Marketing Plan page 20
BreakEven in
Units(Combined) 103,945 90,960 80,876 72,815
Exhibit 4 – break even analysis by sale at Beer Store and combined
References
Boughner, B. (2017, Sep 15). International Plowing Match in Huron County Sept. 19-23.
Retrieved from The Observer: http://www.theobserver.ca/2017/09/15/international-
plowing-match-in-huron-county-sept-19-23
Butler, C. (2017, Aug 09). London's craft beer scene is 'exploding'. Retrieved from CBC:
http://www.cbc.ca/news/canada/london/london-craft-beer-festival-popularity-exploding-
1.4238879
Casey, Q. (2016, May 25). Molson Coors ushers in a new era for Canada's oldest brewery.
Retrieved from Financial Post: http://business.financialpost.com/executive/c-
suite/molson-coors-ushers-in-a-new-era-for-canadas-oldest-brewery
Durisin, M. (2013, Apr 23). Why Everyone Is Going Crazy For Craft Beer. Retrieved from
Business Insider: http://www.businessinsider.com/why-craft-beer-is-so-popular-2013-4
Financial Post. (2015, Sep 16). The rise of craft beer in Canada: An infographic. Retrieved from
Financial Post: http://business.financialpost.com/news/retail-marketing/the-rise-of-craft-
beer-in-canada-an-infographic
Flora, C. (2008, Nov 1). Group Think: This Is So We. Retrieved from Psychology Today:
https://www.psychologytoday.com/articles/200811/group-think-is-so-we
Sloan, W., & Fleming, R. (2017, Jun 19). The Pride parade, NXNE and seven other things to see,
do, hear and read this week. Retrieved from Toronto Life:
https://torontolife.com/culture/toronto-events-june-2017-pride-nxne-craft-beer-festival/