CORPORATE CASE STUDY: Molson's PR formula has a distinctly local flavor

Keeping corporate and product PR apart while marketing specifically to each region has proven a winning strategy for Molson in Canada, and one it has begun to export beyond its home borders.

Keeping corporate and product PR apart while marketing specifically to each region has proven a winning strategy for Molson in Canada, and one it has begun to export beyond its home borders.

It's no secret that beer is associated with fun. But brewing, marketing, and selling beer is serious business. And in Canada, it's even a little tricky. But Montreal-based Molson seems to have figured it out, the best indication being that the Canadian beer giant, one of North America's oldest brewers, more or less splits the vast majority of market share with chief competitor Labatt (each at about 45%). According to beer writer Stephen Beaumont, an author and frequent newspaper and magazine contributor who also runs WorldofBeer.com, only about 10% of the Canadian market remains for divvying up among imports and local craft-beer favorites. Local taste, however, is of utmost importance, even to a big company like Molson. To put it another way, brewing beer requires the right mix of different ingredients and processes. In that sense, Molson is no different from any other brewery, large or small. Distinct PR ingredients When it comes to communications however, the company has found it essential to keep the major ingredients - corporate and product communications - totally separate. In fact, corporate communications exerts relatively little - if any - influence on how the products are promoted. The idea, essentially, is that Molson corporate affairs focuses on, well, everything corporate, while the regional communications groups focus on beer drinkers, measuring and benchmarking locally. Molson's approach to product marketing, then, splits Canada into two regions: Ontario/West and Quebec/Atlantic. (Molson USA is solely a marketing outfit for the products, as the company has no breweries in the US; its recently acquired Brazilian arm Cervejarias Kaiser S.A. is also separate.) Corporate communications "has to do with the corporate entity itself, meaning the entity that's a publicly traded company," explains VP of corporate affairs Sylvia Morin. In other words, corporate affairs handles everything before and after selling the beer, meaning communications of a corporate and operational nature (such as brewing and community relations), and financial reporting. To that end, Molson does have aggressive communications plans for the communities in which it operates, as well as for the breweries themselves, should a crisis occur. But aside from a product recall a few years ago in Quebec, Morin claims that there's rarely been a need to twist the cap off the crisis plan. Same goes for the product side of things, which in the Ontario/West region, is headed by director of PR David Jones. "On a case-by-case basis, there are crisis plans developed for every event we do - every contest where we fly winners in, and host people in large numbers," says Jones, adding that the plans are updated every year after major events like the Molson Indy, or the Molson Snow Jam (a summer event for which snow is trucked into the venue for snowboarding jumps and ramps). He claims that he hasn't had to deal with crises in a long time, but "there's a constant readiness here from a product point of view, so we're always prepared, as anyone in our position must be." But Jones' primary focus is on beer drinkers in his region. "It lets us split our resources effectively, as opposed to having one central PR function that must look out for the whole country," he says. That in mind, he aligns his efforts with those of the sales and marketing operations of Ontario/West, "bringing thinking to the table earlier in the process - before things are fully baked - to give us more of an opportunity from a PR standpoint." He's quick to add, however, that it's not simply about marketing in different provinces (though there are obvious cultural and preferential differences between English-speaking Canada and Quebec). "In certain provinces, some brands are disproportionately popular, but it's not a function of geography as opposed to market penetration." Foresight and flexibility And with that, he claims, there has to be a level of flexibility. Many of Jones' efforts are planned far in advance, like Molson's activities surrounding Canada-based NHL teams, but he must always be ready to make tactical adjustments. "If you're bringing out a new product, that's something you want to capitalize on. Obviously, those sorts of things happen on an ad hoc basis. We have to react, as well as look for opportunities where we can quickly jump on board things that are happening." Reaction, in fact, is clearly a Molson strength. Jones points to the introduction of a special-edition Bubba, a five-liter mini keg adorned with designs of certain NHL team jerseys (of course, the idea being that Bubbas with Toronto Maple Leafs jerseys printed on them would be popular in Toronto, for example). "We're talking weeks as opposed to months of planning," he says. "It was a matter of trying to capture public interest, and put as many of these things in the media's hands as possible because we knew they had talk value." The Bubbas sold out in many places, and people were even auctioning them off on eBay. But Molson had to be prepared for the backlash, as upon the Bubba's introduction, at least one major outlet sought to report on it as a mass-consumption container. "We have to prepare for negative stories that may come out," says Jones. And he was. "The most popular-selling format in Canada is the 24 pack. It's what most people buy. The Bubba holds 14 beers. So the argument that it's a super-consumption pack is false. It is designed, marketed, and consumed as a social case. We didn't have any problems dealing with it, but the media can sometimes take a story like that and try to make more out if it than it really is." Molson has had other major successes on the PR front, such as the "I Am Canadian" campaign of a few years ago, which featured a character named Joe Canadian and a fair amount of US-Canada interplay. But opportunities such as that don't pop up as often as Jones would like, as the media spillover from the US can make it hard for Molson to break through with its audience. "People here read the same magazines that are popular in the US, and TV is the same in terms of entertainment programming. It's not as easy for us to get involved with those sorts of things," he laments. Evaluating the competition Nevertheless, Molson constantly reviews and evaluates how it performs, as Jones wants "to see how our brands are stacking up and making news" against the competition. "I want to be able to compare Budweiser's activity in the Super Bowl with ours in hockey," Jones explains. "We want to be able to slice and dice the information as much as we can, down to a city or regional level." But is it the right approach? Yes and no, says Beaumont of WorldofBeer.com. He claims that Molson's MO isn't really unique, as Labatt essentially operates the same way. And in the eyes of the consumer, the brands are interchangeable. "Brand loyalty in beer has been waning for some time. A Labatt's Blue loyalist, if there's no Blue around, will have a Molson Canadian, and not really get upset about it," he says. What's more, Beaumont sees smaller craft beers like Sleeman and Moosehead better poised for growth in Canada, as they not only have local appeal, but are able to make strategic alliances in regions they aren't able to reach on their own - and perhaps start to tear away at that 90% of the market owned by Molson and Labatt. "They're not structured as a corporation to address that segment of the market," Beaumont believes. "I think both Molson and Labatt have decided that their best room for growth is to look elsewhere in the world," he adds, hence the Brazilian acquisition. "They talk about the Canadian marketplace publicly, but I feel that the focus is much more on international growth." Whatever the case may be, it seems to be working. "The company's never been more successful and profitable," says Jones. ----- PR contacts VP of corporate affairs Sylvia Morin VP of corporate affairs, Quebec/East Marieke Tremblay Director of PR, Ontario/West David Jones

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