Coors Rocky Mountain Sparkling Water: A Failed Expansion Attempt in the Bottled Water Market
Matthew Schonewille
AI Case Writing Prompt Expert, Business professor and Author
Coors Rocky Mountain Sparkling Water: A Failed Expansion Attempt in the Bottled Water Market
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Abstract:
This case study delves into Coors Brewing Company's unsuccessful venture into the bottled water market with the launch of Coors Rocky Mountain Sparkling Water in 1990. The case emphasizes the challenges of brand extension and the implications of diverging from an established brand's core identity. Through a comprehensive analysis of market trends, consumer perceptions, product strategy, and eventual market withdrawal, the case offers valuable insights into the complexities of brand management and the critical importance of maintaining brand coherence.
Theme: The theme of brand extension and coherence within product diversification strategies is central to this case study.
Topic: A brand's failed attempt to expand into a new product category and the resulting implications for brand management.
Discipline: Marketing, Brand Management, Consumer Behavior.
Introduction
Coors Brewing Company, known for its iconic beer brand, attempted to diversify its product offering by venturing into the bottled water market with the introduction of Coors Rocky Mountain Sparkling Water in 1990. The decision was influenced by the company's established reputation for using Rocky Mountain spring water in its beer brewing process, aiming to leverage its brand recognition to penetrate the growing market for bottled water. This case study delves into the factors that led to the product's failure and the valuable lessons that can be gleaned from this foray into a new product category under an established brand.
Market Context
In the late 1980s and early 1990s, the demand for bottled water experienced a significant surge, driven by increasing health consciousness among consumers and the growing preference for on-the-go convenience beverages. Coors Brewing Company recognized this trend and sought to capitalize on its existing consumer base and brand image to expand beyond the beer industry into the non-alcoholic beverage market.
Product Launch and Initial Strategy
Coors Rocky Mountain Sparkling Water was introduced with the intention of leveraging Coors' association with Rocky Mountain spring water, a key ingredient in its beer production. The product's branding and marketing heavily emphasized its connection to the pristine and natural source of water, aiming to appeal to health-conscious consumers seeking high-quality bottled water options.
Challenges and Market Response
Despite the company's efforts to align the new product with its existing brand narrative, the launch of Coors Rocky Mountain Sparkling Water encountered challenges in consumer perception and acceptance. Consumers found it difficult to disassociate the Coors brand from beer, leading to a lack of enthusiasm for a non-alcoholic offering under the same brand name. The association of Coors with alcoholic beverages created a cognitive dissonance when attempting to transition to a health-focused, non-alcoholic product category.
Sales Performance and Withdrawal
The market response to Coors Rocky Mountain Sparkling Water was underwhelming, resulting in sluggish sales and an inability to gain significant market share. Recognizing the lack of consumer resonance and brand misalignment, Coors Brewing Company made the strategic decision to withdraw the product from the market within a few years of its launch. The company officially canceled the trademark for Coors Rocky Mountain Sparkling Water in 1997, marking the end of its foray into the bottled water segment.
Lessons Learned and Implications
The case of Coors Rocky Mountain Sparkling Water serves as a poignant reminder of the importance of brand coherence and congruence when expanding into new product categories. It underscores the critical need for a clear understanding of consumer perceptions and expectations, particularly when introducing non-traditional offerings under an established brand name. The failed venture highlights the challenges of breaking consumer associations and the potential risks of brand dilution when launching divergent products that deviate from the core brand identity.
Implications for Brand Management
The experience of Coors Brewing Company with Coors Rocky Mountain Sparkling Water underscores the significance of strategic brand management and the careful curation of brand extensions. Brand owners must conduct thorough market research and consumer behavior analysis to assess the compatibility of new product offerings with the existing brand equity. Moreover, the case emphasizes the imperative of aligning brand narratives and ensuring that new product introductions resonate with the brand's core attributes and consumer perceptions.
Conclusion
The unsuccessful expansion of Coors into the bottled water market with Coors Rocky Mountain Sparkling Water serves as a cautionary tale for companies seeking to diversify their product portfolios under established brand names. The case underscores the inherent challenges of stretching brand associations beyond their original product categories and the critical importance of maintaining brand coherence and relevance. While Coors Brewing Company continues to be a dominant force in the beer industry, the legacy of its brief foray into the bottled water market offers valuable insights into the intricacies of brand extension and the necessity of aligning new offerings with core brand identity.
Teaching notes
Case Summary:
Coors Brewing Company's endeavor to diversify its product portfolio by introducing Coors Rocky Mountain Sparkling Water in 1990 faced significant challenges and ultimately resulted in the product's withdrawal from the market. The case explores the underlying factors contributing to the failure of this brand extension and the associated implications for brand management and product diversification strategies.
Context and Background Information:
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The late 1980s and early 1990s witnessed a surge in the demand for bottled water, driven by shifting consumer preferences towards healthier beverage options and on-the-go convenience. Coors Brewing Company, known for its iconic beer brand, sought to leverage its brand equity and the association with Rocky Mountain spring water to enter the burgeoning bottled water market.
Key Issues and Challenges:
1. Brand Extension Failures: The disconnect between Coors' beer-centric brand identity and the introduction of a non-alcoholic product.
2. Consumer Perception: Cognitive dissonance resulting from attempting to shift consumer associations, leading to low market resonance and sluggish sales.
3. Brand Coherence: The challenges of maintaining brand consistency and relevance when diversifying into new product categories.
Big Underlying Problem impacting everything:
The big underlying problem impacting everything is the struggle to reconcile the established brand identity of Coors as a beer producer with the attempt to enter the bottled water market, thereby leading to consumer confusion and an inability to align the non-alcoholic product with the core brand narrative.
Learning Objectives:
1. Understand the complexities of brand extension and the associated challenges in diverging from an established brand's core identity.
2. Explore the implications of brand coherence and consumer perceptions in the context of product diversification strategies.
3. Analyze the impact of failed brand extensions on consumer behavior and market acceptance.
Theoretical Framework:
The case aligns with theoretical concepts in brand management, consumer behavior, and product diversification strategies, providing a platform to apply relevant theories and models to real-life business scenarios.
Target Audience:
The case study is designed for undergraduate and graduate students pursuing studies in marketing, brand management, consumer behavior, and strategic management. It is also beneficial for mid-career professionals and executives seeking insights into the challenges of brand extension and product diversification.
Teaching Strategy:
The case study can be utilized in a classroom setting to facilitate interactive discussions, group activities, and role-playing exercises. Instructors may employ multimedia resources, such as videos and real-life examples, to enhance student engagement and comprehension.
Discussion Questions:
1. What factors contributed to the disconnect between Coors' established brand identity and the introduction of Coors Rocky Mountain Sparkling Water?
2. How did consumer perceptions and associations impact the market acceptance of the new product?
3. What strategic considerations should companies evaluate before diversifying their product portfolio under an established brand name?
Analysis of Key Issues:
Students are encouraged to critically analyze the challenges surrounding brand extension, consumer behavior, and brand coherence. They should evaluate the implications of the failed brand extension on Coors' market position and consider potential strategies to address the underlying issues.
Assignment or Project Ideas:
1. Conduct a brand analysis of Coors Brewing Company, assessing its core brand identity and consumer associations.
2. Develop a new product launch strategy for Coors Rocky Mountain Sparkling Water considering brand coherence and consumer perceptions.
3. Create a market entry plan for a new non-alcoholic product under an established beer brand, addressing potential consumer resistance and brand alignment.
Possible Outcomes and Conclusions:
Students should be able to identify the complexities of brand management and the critical considerations associated with brand extension and product diversification. They can draw conclusions on the implications of brand misalignment and devise strategic recommendations for companies aiming to expand their product offerings under an established brand name.