Reference no: EM132291321
CASE STUDY : Do You Have to Spend Money to Make Money?
That is the question SABMiller, the world’s second-largest brewing company that controls about 90% of the South African market, is asking itself. Looking for ways to gain greater sales and increase market share, SABMiller is trying to generate more sales by attracting women in South Africa to drink its beers. The company makes Brutal Fruit Mango-Goji Fusion Beer and Flying Fish Premium Flavored Beer, which are sweeter and generally preferred by female customers.
The problem is that most women in South Africa don’t frequent bars and pubs—and with good reason. For many years, the country’s major religions, Christianity and Islam, kept most South African women out of bars, as drinking did not fit in with their religious rinciples. These days, religion has little impact on a woman’s decision to visit bars, but the attractiveness, cleanliness, and safety of the establishments certainly do. Leftover from the days of apartheid, illegal shebeens (informal bars often with just a few plastic chairs set up in the proprietor’s front room) have transitioned to licensed bars but have yet to lose their unclean appearance. Most former shebeens would be considered dives in the United States, with no toilets and ramshackle conditions. Thus, going out to a bar to drink doesn’t appeal to “respectable” women.
SABMiller sees women as a way to generate more money in a market with increasing competition from Heineken and Diageo. There are 17 million women of legal drinking age in South Africa. But how can the company get them to frequent bars, SABMiller’s preferred sales avenue, and spend money? SABMiller’s managing director in Johannesburg, Mauricio Leyva, thinks the answer can be found by working with the 6,000 bar and tavern keepers to make their establishments more attractive to women. Leyva wants to finance $5 million in bar renovations that include adding or updating bathrooms, painting, and redesigning the establishments’ seating arrangements. The company is also considering buying bar supplies, such as beer glasses, because focus groups have revealed that many women don’t like drinking from bottles.
You’re the director of African and Asian sales and Leyva’s boss. It’s your decision to approve or deny Leyva’s idea of helping establishments upgrade their look to appeal to women customers.
Discussion Questions
1. What are the key issues regarding the decision? What information are you going to want to find out before you decide on this investment?
2. Recall from the chapter the four key decision-making approaches (rational decision-255 making model, intuition, wicked organizational problems, and creative problem solving). Try to come to a decision for the organization using the tenets of each of these styles.
3. What differences in the results do you see?
4. What personal biases might have influenced you?
5. What elements of the situation might have made the decision easier or harder to make?
6. How do you think making a decision with others would have influenced the decisions and decision-making process? How might have others’ perspectives, pressure, and persuasion influenced you?