The case is about Glenmeadies, a company who sells high end scotch. Bob Littlefield is the division manager of Glenmeadies since three months. Glenmeadies organises every year an tastemakers programme to promote their whisky. This time the tastemakers programme took place in New York. Bob was present at the New York tastemakers programme so he could see his marketing approach up close and he can interact with customers he wouldn’t interact with. The guest are mostly bartenders from the city’s upscale bars and a few club owners.
For Paula Laughlin, the marketing director thought that the event was a success but Bob wanted to know if it met the goals in terms of marketing. Bob notices various point s throughout the evening how hard it would be to measure the Return On Investment on this kind of expense. The budget for this event was over the budget but they will make it up in the other cities to have an average of 15.000 dollar per event.
Ewan and Bob worked together in order to create a presentation about Glenmeadie’s results and where the money goes. Mostly all the expenses were made by taste making programmes and some pilot initiatives, but this was necessary to create a more personal connection with the customer. So they have already cut expenses in other area’s especially in overhead and research and development.
The positive news is that the sales started to climb. Due market research they knew that that the sales are increasing due more repeat purchases, higher individual buyer consumption and greater share of wallet. But if the trend continues, they are at risk of outselling their production. Bob knew that this was a good problem to have. He would call on some of the other distillers to top off his supplies for blending purposes. And he could hold the line on process at the wholesale level if there was strong pull from the retailers and on premises sellers.
The only real problem would be the single-batch and ages reserves, which would be harder to backfill, given their finite supply. Ewan noted that they can justify the marketing investment by showing the top-line growth. But will all these customer facing initiatives yield higher demand in the long term and make it stable enough that they can get the margins back up or have they just made demand less consistent and predictable.
Normally whisky is matured, casks (barrels) from a single distillery are typically emptied into a cask and mixed together with other casks in efforts to make the flavour more consistent for each bottle for a given brand. After this, the whisky is usually diluted with water. Afterwards, this whisky is then bottled. Single Cask is whisky that has not been combined with other casks in the distillery. Instead, it is taken straight from one cask, diluted with water then bottled. The result is a more distinct and less-consistent flavour from what you’d typically expect from a distiller. Since every batch from each cask is slightly different, the distinctions of the cask used to mature the whisky will affect the flavour uniquely in a Single Cask bottle.
Bob didn’t support the idea of Ellis. He found it too soon to talk about other expensive and it would cost too much. So for Bob this was an idea for another budget cycle. He preferred to get the cost first in line, after that it would be a great discus point for new investments in production technology.
So the dilemma is “What should be the priority for Glenmeadie’s innovation efforts?” Should we consider Ellis his idea or is it better to do what they are doing now.