Introduction
Labatt Blue in recent years has been under increasingly great amounts of strain in the mainstream beer market. They are no longer resonating with younger audiences, their market share is dropping, and their marketing budget has been cut to only half of what their competitors have. It’s clear that Labatt must make drastic changes to remain successful in the beer industry. This proposal will make a case for changing Labatt’s target market from teenagers and young adults to older consumers.

Labatt’s Target Market
Labatt should change target markets for the following reasons:
1. Labatt Blue is relatively unknown among teenagers and young adults however, is well recognized by older generations.
2. Product differentiation in the mainstream beer market is minimal. Beers are differentiated in the market through branding which makes marketing very important. Given that Labatt Blue has a marketing budget that is only half of their competitors, Labatt cannot expect to successfully compete in the market.
3. Labatt’s recent marketing campaigns have been somewhat geared towards older generations. For example, in 2006, Labatt began emphasizing the quality of the beer as well as the beer’s history, opposed to the teenage antics portrayed in previous ads.
4. Labatt’s parent company InBev, already has a successful mainstream beer, Budweiser. It seems counter productive and inefficient from a profitability standpoint for Labatt to target the exact same crowd as Budweiser. 5. In the mainstream market, product differentiation is low, buyer switching costs are low, fixed costs are high while marginal costs are low, capacity expansion increments are high, and the beer expires. Rivalry among competitors according to Porter, is therefore expected to be high (see appendix for details)1. This coupled with the fact that buyer power is somewhat substantial (see