The Australian Beer Industry Free Essay Example

.Introduction 1. 1 Authorisation and purpose This report has been authorised by Mr R Murray CEO of Lion Pty Ltd. The purpose of this report is to provide information on the product XXXX Gold Beer in today’s market. The report includes information on the product, promotion, and pricing to assist with future product development and increase of market share. 1. 2 Limitations Information over load has been a dominant limitation with an overwhelming amount of information on the Australian alcohol industry. This information has provided a variety of data in some cases resulting in inconsistency within that data.

Limitations also came from historical research within the beer industry trying to gather information on dates that related to these products resulting in difficulty with the introductory perceptual map. I was also unable to determine with the research information if the market share figures were based on dollars sold or units sold. 1. 3 Scope of the report This report covers the company background, product attributes, as well as promotional strategies including target market and marketing mix along with the pricing strategies for XXXX Gold Beer.

The information for this report was gathered from many sources including the Lamb et al. (2010) text book, internet articles and web sites. This report is intended to be used as a reference tool to assist management with future product development and decision making in regards to XXXX Gold Beer. 2. PRODUCT AND TARGET MARKET 2. 1 Company background In 1878 brothers Nicholas Fitzgerald and Edward moved to Milton, Brisbane, Queensland where the Milton Castlemaine brewery was founded.

The takeover of Perkins & Co made Castlemaine Perkins Ltd the largest brewery in Queensland XXXX (2012).

Castlemaine Perkins was acquired by Lions Pty ltd 1992, in 2009 Kirin Holding Company limited completed the purchase of Lions and National foods, Lions Nathan National Food was formed. Lions became one of the leading food and beverage companies operating within Australia Lionco (2012). Despite the declining beer market, Lion’s Co delivered an standout performance in 2012, continuing its positive momentum and emerging as Australia’s largest brewer Lionco (2012). Lions currently employs over 7500 employees across Australia and New Zealand.

The current CEO is Mr Rob Murray Lionco (2012). Lions Co is seen as a great ambassador of sustainability within the industry with their banner ‘Doing the right thing for the long term’. Their four goal areas are Economic, Environmental, Our People and Social Engaging. There endeavors to excel in this goal can be located on their website http://www. lionco. com. 2. 2Product background In 1991 XXXX Gold was launched a mid-strength larger, 3. 5 precent alcohol. Sold in 375ml bottles and cans. These can be purchased singly, ranging from $2.

40 to around $6. 00 or in 6 packs unit or carton units depending on whether they are being purchased from a bottle shop or a licenced venue. XXXX is a low carbohydrate beer with a total of 1. 9 carbohydrates to 100ml XXXX (2012). XXXX is brewed with the finest Australian malt, barley and unique golden cluster hops. It has a balanced, smooth flavour and body with a crisp, clean and refreshing taste Dan Murphy’s (2012). In April 2012 XXXX Gold beer held 12. 4 percent of market share followed closely by Victorian bitter at 12. 3.

In May 2012 XXXX Gold beer claimed the converted award of Australia’s best selling beer Australian Brews News (2012). The beer industry is a highly competitive industry with a large range of beers both local and imported beers. Lion has well over 20 different types of different strength beer alone and controlled 47 percent of the market in June 2012 The Sydney Morning Herald (3 August 2012). Lions hold 6 out of the top ten beers in Australia, the other four belonging to Victorian Bitter and three Carlton beers Wikipedia (2012), XXXX (2012).

2. 3Target Market The target market segmentation bases have the following relevant descriptors including Climate, Gender, Age, Income and Lifestyle. XXXX Gold beer is targeted to the sunny Queensland climate with the message that consumers can enjoy a refreshing cold XXXX Gold beer on a hot sunny day. This geographical segmentation has been identified from the fact that Queensland is a northern state with a subtropical climate resulting in Queensland being known as the Sunshine State Wikipedia (2012).

Gender and Age segmentation are targeted towards males aged eighteen years and over. XXXX is an alcoholic beverage which has strict age laws for consumption. The trends in recent alcohol consumption have remained fairly similar over the years. Around 83% of all Australians aged 18 years or over were recent alcohol drinkers and the most preferred alcoholic beverage among male drinkers was regular-strength beer Australian Institute of Health and Welfare (2007) Beer is traditionally seen as a male consumed drink with most marketing campaigns aimed towards males.

Income is a popular demographical variable as consumers are influenced by their income levels which in turn influences their wants and determines their buying power Lamb et al. (2010). XXXX demonstrates this by targeting the product toward the middle income bracket with affordable prices, a large variety of distributors making XXXX easy to purchase at a wide number of distributing outlets as well as campaigns promoting middle class workers as XXXX Gold beer drinkers XXXX (2012). The psychographic segmentation Lifestyle looks at dividing people according to the way they spend their time Lamb et al.

(2010). XXXX targets the social side of the lifestyle descriptor marketing to groups that enjoy socialising with one another whether it be spectating at sporting events, outdoor activities or social gathering like BBQ’s. According to Australian Brews News (2012) Lions list their key brand guideline when it comes to sponsorship. Lions see XXXX Gold’s target market as male, aged 25? –? 39, blue/grey collar workers who are down to earth, sociable and love watching or playing sport with mates.

This group lives the good life and loves recreational and social sports like fishing and cricket. This description of XXXX gold target market is portrayed in their current marketing campaign with television advertisement aimed at the above target market. 3. PRODUCT STRATEGY 3. 1Product Type and marketing mix XXXX Gold beer is a consumer product. A consumer product is something that is brought to satisfy the needs and wants of the consumer Lamb et al. (2010). XXXX Gold consumers purchase this product to fulfil several needs and wants.

These include social factors, to have a beer with a group of friends to encourage socialisation, to enjoy the delicious taste and desirable aroma and fulfil the need of trust. Beer encourages relocation and cools you down on a hot summer’s day. It’s a relatively inexpensive product to purchase and requires little shopping effort and planning making it a convenient product type Lamb et al. (2010). The marketing mix implication for XXXX Gold under the convenient product type is that the product is a regular purchase. The Australian Bureau of Statistics did a study for 2001 stating that 48.

2 percent of Australians age eighteen years and over consumed alcohol more than once a week Australian Bureau of Statistics (2010). The price is usually low and the placement distributor is wide so you are able to purchase this product from many different distributors including bottle shops, pubs and night clubs. Promotion is conducted using several different promotional strategies that will be discussed below. 3. 2Positioning strategy The battle for market share and market advantage in the Australian beer industry has never been so competitive with so many different brands of beers available on the market.

XXXX has developed a continuing positioning strategy which focuses on the place a product holds in consumers mind Lamb et al. (2010), to maintain a strong competitive position with its target market. XXXX Gold has identified its claim and has a distinct spot in the minds of its target market. Due to the fact that most beers are similar in taste, XXXX demonstrates a clear image, brand awareness and brand loyalty which results in a consistent preference for one brand over other brands Lamb et al. (2010).

Having this clear market position which comes from XXXX’s carefully selected target market and promotional strategies has consolidated XXXX’s position in consumers’ minds resulting in greater market share. XXXX positioning strategy is based on product users. XXXX knows the personality and type of product user it is marketing too. Developing this positioning strategy enables XXXX to position the product so it is in the forefront of their consumers’ minds resulting in greater sales and increased market share.

XXXX is demonstrating this in their everyday promotional endeavours which can be viewed on their website, through their television advertising as well as the promotion activities they take part in on a regular basis at sporting events, social gatherings and corporate events. Some of these promotional endeavours will also be outlined below. XXXX has positioned this product based on differentiations that are more trivial such as brand name and packaging as it is hard to differentiate between factors like taste and ingredients.

XXXX gold has convinced consumers that XXXX brand is distinctive and consumers have agreed as XXXX has recently been named Australia number one beer in today’s market. 3. 3Product type XXXX Gold beer is one of Lions Pty Ltd product items which can be identified as a specific version of lion’s beer products with it distinct offering based on serving size, container type and distribution compared with Lion’s other product items. There are three products items which are in the XXXX Gold product line 375ml bottle and 375ml cans XXXX (2012).

XXXX Gold beer is one of many products that make up Lion’s product mix with products in many different categories and offers brands in beer, spirits, wines, milk, fresh dairy food, juice, cheese and soy beverages. 4. PROMOTION STRATEGY 4. 1Promotional tools XXXX demonstrate a range of promotional tools that allows XXXX to communicate the product to its target market. XXXX’s promotional strategy is a specific combination of promotional tools that are used to optimize different elements of promotion. These include advertising, public relations, direct marketing, personal selling and sales promotion Lamb et al.

(2010). Advertising is an interpersonal one way mass communication strategy Lamb et al. (2010). that XXXX uses in a traditional form using television ads, radio, newspaper, magazines and billboards. Sales promotion is also used in the form of contests and give-a-ways. These are a large section of XXXX’s promotional strategy with competitions and give-a-ways displayed on their packaging as well as on their website. Current promotion tolls that XXXX is using at the moment are give-a-ways, win 1 in 12 trips to XXXX Island by purchasing specially marked cartons and finding the winning bottle or can.

This promotion can help to persuade prospective consumers to purchase XXXX over competitor’s products with the incentive of the chance to win. XXXX also works on public image, how the public perceive them as a brand through public relations. XXXX contribute to their public image by being involved and supporting different charities like the Brisbane Broncos charity fund Broncos (2012) XXXX regularly advertising through sponsorship of sporting events which dates and times can be viewed on the XXXX web site on when and where to attend these events <http://www.xxxxgold. com. au/events>.

One of the current sponsorship deals XXXX is involved in is the NRL Football league with the XXXX Angels, a female professional entertainment performing dance act that performs before and during the football game. These ladies are dressed in XXXX colours Yellow and Red with logos on their outfits promoting XXXX as a brand. XXXX also sets up their XXXX Gold container bar at most of these events to sell and promote the XXXX Gold product. 4. 2 Advantages and disadvantages.

The advantages with the promotional strategy ‘XXXX Angels’ is the attractive looking females that are directly targeted toward the XXXX target market – males. The events that these Angels are attending are known for a high level of male attendance (assumed) like sporting events. XXXX has the ability to put on a show promoting the product, have the convenience to sell to new and repeat customers at these events. This can result in converting non XXXX drinkers that are in the target market to XXXX drinkers by positioning the product in their minds and being able to offer it to them directly.

Some disadvantages that might come with this promotional strategy also come with the use of females in the fact that people might be offended by this uses of female sexual exploitation and might discourage these consumers from purchasing the product. Another disadvantage looks at the venues that these promotions are being held at become more family orientated with the NRL putting on bring your family days and allowing parents to bring their children for free Broncos (2012). Having such an open display of alcohol and female sexual displays may hurt the brand instead of enhancing it.

However this promotional strategy does suit the needs of the target market which is made up of males. 5. PRICING STRATEGY 5. 1Pricing objective and strategy XXXX Gold’s pricing objective is a sales-oriented one which looks at increasing market share, an increase in either product sales as a percentage or for total sales for that industry Lamb et al. (2010), XXXX has successfully done this over the last twelve months with their market share increasing from 11. 7 percent in April 2011 to 13. 7 percent in April 2012 Australian Brews News (2012).

This increase has made XXXX the highest market share holder in the Australia beer industry today. XXXX also use the status quo pricing objective as they seek to maintain existing prices as well as meeting their closest competitor’s prices. XXXX has had a consistent price growth with standard inflation rates as well as staying around the same price as Victorian Bitter. 5. 2Perceptual maps The perceptual maps have been brokem down into price from highest to lowest as well as flavour from bitter to sweet. In 1991 when XXXX beer was released there were not many other Australian beers on the market.

Victorian Bitter was available around the same time however not on the same consumption level it is now in Queensland. Queensland was mainly dominated by XXXX which was a relatively cheaper alcoholic beverage when it was released in the 1990’s and became a Queensland household favourite. High Price (per unit) | | Bitter Flavour| Sweet Flavour| Low Price (per unit) In the Maturity Stage below are five different types of beers XXXX Gold, Victorian Bitter, Tooheys extra dry, Corona extra and Hahn Super Light.

XXXX Gold is a sweet beer which is on the low to average price range with Victorian Bitter which is around the same price, but a more bitter flavour beer. XXXX Gold and Victorian Bitter are the highest competitors with one another holding the top two spots in market share. Tooheys Extra Dry is fifth on the list. It is the same price as Carlton Drought but is a sweeter flavoured beer. Corona Extra is also a sweet flavoured beer however quite a bit more expensive than the others per unit. Corona Extra is at eighth place on the top 10 market share beers.

Hahn Super Light is the last on the top 10 market share. This beer is lowest in price and is also a bitter beer like Victorian Bitter. High Price (per unit) | | Bitter Flavour| Sweet Flavour| Low Price (per unit) 6. STRATEGIC ADJUSTMENTS TO MARKERTING MIX 6. 1Adjustments to better suit the market XXXX Gold’s marketing mix elements, product, price and promotion have all been covered in the above report. XXXX have demonstrated a great success in how they present the product to its target market.

Below are adjustments to these elements that might help the product better suit the market. XXXX Gold holds a strong market share with the Australian market so XXXX may want to focus a portion of its promotion on the large numbers of foreigners that land on our shores each year. There were 5. 98 million visitor arrivals for year ending June 2012, an increase of 1. 2 per cent relative to the previous year Tourism Australia (2012). A portion of this 5. 98 million was over the age of eighteen and will conduct some form of alcohol consumption while there are in Australia (assumption).

XXXX now holds the title of the number one beer in the country and has the brand power to promote to the international tourism market and capture a large segment with the same descriptors and the Australian target market. Another element XXXX might want to consider is looking at the foreigners that now call Australia home. XXXX typically target the Australian Caucasian male. However with Australia’s population now made up of 25 percent foreign-born citizens XXXX could target this segment by including foreigners in their promotion and advertising campaigns. 7.

CONCLUSION AND RECOMMENDATION 7. 1Conclusion In conclusion to this report the results show that XXXX has created a “cult” like following for this beverage from its Australian target market users. They have created a trend and develop loyal consumers through their hard work and recognition of sustainable market segmentation, product, promotion and pricing strategies that are aimed directly at their target market. XXXX have been successful in positioning their product in the forefront of consumers’ minds resulting in XXXX Gold being named the number one Australian beer for 2012.

XXXX has demonstrated promotions that are exciting, alluring and most of all entertaining. 7. 2Recommendation Develop promotional strategies to gain a portion of the international foreign travellers market. Develop promotional strategies aimed at foreign born Australians to incorporate the current promotional strategies aimed toward Aussie males. Both of these recommendations do not have time lines and are not priority recommendations. They are recommendations that should be considered when preparing the next promotional strategy.

References

Lamb, CW, Hair, JF, McDaniel, C, Summers, J & Gardiner, M 2009, MKTG, 1st Asia-Pacific edn, China Translation & Printing Service, China. XXXX 2012, Viewed 3 August 2012, < http://www. xxxx. com. au/>. Lionco 2012, Lion, Sydney, New South Wales, Viewed 3 August 2012, < http://www. lionco. com/> Dan Murphy’s 2011, Dan Murphy’s, Aplington, Victoria, Viewed 5 August 2012, < http://danmurphys. com. au/dm/home. jsp> Kirkegaard, M 2012, Australia’s most popular beer, Australian Brewers News, Melbourne, Victoria, Viewed 3 August 2012 <www. brewsnews. com. au/2012/05/australias-most-popular-beer/>.

Greenblat, E 2012, The Lion’s share keeps growing, Sydney Morning Herald, 3 August, Viewed 5 August 2012 <>.

Wikipedia 2012, Beer in Australia, Wikipedia, Viewed 3 August 2012, <wikipedia. org/wiki/Beer_in_Australia#Brands_by_region>. Australia Institute of Health and Wealthfare 2010, Drinking patterns in Australia, Canberra, ACT, Viewed 15 August 2012, <http://www. aihw. gov. au/publication-detail/? id=6442472461>. Australian Bureau of Statistics 2012, Alcohol Consumption in Australia, Cabberra, ACT, Viewed 15 August 2012.