The Beer Industry Table of Content 1. Executive summary 2. Content 3. Micro Environment 1. Organization 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics 4. Macro Environment 1. Demography 2. Economic Environment 3. Natural Environment 4. Technological Environment 5. Political Environment 6. Cultural Environment 5. Product Strategies 6. Place Strategies 7. Promotion Strategies 8. Price Strategies 9. Conclusion 1. Executive summary The beer industry has been around for centuries and is still growing strong as to date. This report talks about the macro and microenvironment and the 4 P’s of the beer industry.
It shows that in the beer industry every force is important to it and can affect the company in one way or another. And with the changes of consumers how the beer industry copes with it. As changes happen, the beer industry will have to change to survive one another and from other alcoholic beverages. 2. Content In this report, the macro environment (demographic, cultural, economic, natural, technological, political), micro environment (organisation, market channel firms, customer markets, competitors, publics) and 4 P’s (price, product, place, promotion) regarding beer will be discussed. 3. Micro Environment
Micro environment are forces such as organization, market channel firms, customer markets, competitors and publics that are close to the organization that will affect its ability to perform and serve its customers. In this section, each force will be discussed and how it affects the beer market. 3. 1 Organization Organization here refers to the company. For an organization to work well, all the different groups in an organization such as top management, finance, research and development (R&D), purchasing, manufacturing and accounting must work together. To design a marketing plan, all the different groups must be taken into account.
As such, a market-orientated organization means that information is shared among the groups and thus, forms the internal environment. Senior management will set the organization’s mission, objectives, broad strategies and polices. It is then the marketing manager task to work within these decisions and come up with a plan, which must be approved by the senior management. The marketing manager must work together with the other groups so that the will know how is finance distributed, what products have the R&D invented, what are the sales like, how well is the market reacting to its product and so on.
And if a marketing plan is adopted, the organization must ‘think customer’ and work together to exceed customer’s expectations. If the different groups in an organization do not work together, customer’s satisfactions may get affected and so will the performance. And if another organization that sells the same product has a well-organized organization, that organization may in the end get the larger share of the market. 3. 2 Suppliers Suppliers play an important role as they determine the value of your organization’s product.
They are the one that provides the organization its resources to produce its good and services and any developments within the suppliers can affect marketing plans. Events such as labour strikes, natural disasters, shortage of supply and any other events can raise the cost of production and force prices to increase which inturn will affect sales volume and customer’s satisfactions. Thus, marketing managers must keep a close monitors on events happening around its suppliers. In recent years, the prices of hops, wheat and barley have been rising. These are the ingredients used in brewing beer.
As the cost price increases, organization maybe forced to increasing the price of their beer and this may lead to customers changing to a cheaper beer brand or change to other alcoholic beverages such as wine and spirits. 3. 3 Marketing Intermediaries Marketing intermediaries helps an organization to promote, distribute and sell their products to final buyers. All these activities may end up adding to the cost of the product. For example, certain companies may feel that hiring a third party to move their goods from place to place is cheaper and certain company prefer to do it themselves and may lead to slightly higher cost.
Organization usually hires advertising agents to come up with advertisements to promote their product to the public to create awareness and this can be very costly. As such in the beer industry, advertising is a very important thing as there are many competitors out there and they more popular your product is the more channels of distribution may get created as pubs, clubs and stores will start to stock up their goods as they are well received by the customers and increases their revenues.
The beer industry depends strongly on pubs, clubs and supermarkets as they are places where people usually hang out for a drink or purchase cartons of beer home and if the number of clubs or pubs are to drop, the beer industry have to find ways to promote awareness of their products to the public. And if there were to be a drop in super markets, the distribution of beer to the consumers will drop too. 3. 4 Customers Studying the customer market is a very important task as they are the one that buys your product.
There are 5 types of market, the consumer market, business market, reseller market, government market and international market. Each market as is own characteristic and the organization must study them to know which are the markets they want to go into. For the beer industry, the likely market to focus on would be the consumer market, reseller market and international market. Beer is a product that is consumed by individuals around the world for example, Japan consumed 6 151. 9 m litre in 2006 and china consumed 31,901. 8 m litres in 2005.
To reach out to these individuals, companies will have to get resellers to be a distributor for them and for more ambitious company they can expand into the international market with the beer. 3. 5 Competitors An organization must always keep track of their competitor’s strength and weaknesses cause to be successful, they must provide better customer value and satisfaction then its competitors. There is no best competitive plan for all organization. Each organization must know their own limits and abilities and make use of their own capabilities to win the competitors.
In the beer industry, there are many different brands of beers around and if your beer is too expensive customer may just switch to another beer that may taste almost similar to you. So each organization must find way to win their competitors be it in price or taste. Wine and spirits are also competitors to the beer industry. Wine has been known to people of its benefits and has been encourage throughout the years that drinking red wine moderately improves health and in 2006 prices of wine in Australia decrease by 0. 1% where as beer as increase by 1. % and these may lead to people switching to drink more wine then beer. In 2005-2006 there was an increase of 0. 2% domestic sales of wine in Australia and this is something that the beer industry has to worry about. 3. 6 Publics Every organization has to pay attention to the publics, as they are groups that may cause an impact on the organization in a good or bad way. There are 7 types of public groups, which are financial publics, media publics, government publics, citizen-action publics, local publics, general publics and internal publics.
Each group as an effect of a beer organization for example if the media suddenly comes up with a report saying that drinking beer is bad for health and drinking wine is much better, the consumers may get affected and stop drinking beer and drink wine. Or if a beer organization wants to expand into the international market and needed some funds they can go to the banks, investments house or shareholders for funds. 4. Macro environment The micro environment forces operate in a larger macro environment forces that create opportunities and pose threats to the organization.
These forces are to be watched carefully and respond to. The macro environment consists of 6 forces. 4. 1 Demographic environment Demography is the study of the people itself. Their age, location, sex, race, occupation and other statics are being studied and this is a major interest to marketers as it involves people and people make up the market. In beer industry, targeted audience are people of a certain age and above for example in Singapore the age limit to drink is 18 and in the USA it is 21. Beside age, there are also group of people who are health conscious and may not take beer, as there is a lot of carbohydrate.
So each beer company will then decided who is their target audience and create a beer product that suits the targeted group. In recent years, low-carb beers are produced to target the health conscious people and are a very welcomed move as it is very popular to the public. People in the more achieved and wealthier group could want premium beer to show the different status and a few companies have already targeted this market. 4. 2 Economic environment. This factor influences the buying and spending power of the consumers. Markets depend on the spending power of the consumers to survive.
And total spending power depends on the income of each individual. As such, marketers must keep track of the trends in income and consumers spending patterns. The Australia economy has been growing strong for the past years and in 2006 December quarter, the trend estimated increase was 1. 7%. This is good to the beer industry cause in Australia culture, drinking is very common and if the people has more spending power it means more money could be spend on buying beer. This could be why there was an increase in beer sales by 0. 6% in 2005. 4. 3 Natural environment
This involves in the natural resources that are needed as inputs by organization and may affect marketing activities. As mention earlier, prices of hops, barley and wheat is increasing due to biofuels and other events. And if there was a natural disaster to hit any of such plantations, it may cost the price of beer to go up and in a long run may have a big impact on sales. 4. 4 Technological environment Technology is inventions that have greatly help and improved living standards. With technology improvements the brewing and packaging of beer can be done in a much bigger quantity and speed compare to the olden days. . 5 Political environment This consist of the law, government agencies and pressure group that influence and limit organization in society and marketing decisions are strongly affected by it. Beers are not to be sold to people who are under the legal drinking age and if a rival company introduce a low-carb beer, the beer company has to develop a low-carb beer too and not just fake the public by advertising the old beer as low-carb. And the law has been very strict with drink driving and such beer companies have to take note of it cause it may influence its advertising locations.
These are the few things that influence the beer market. 4. 6 Cultural environment Cultural is made up of forces that affect society’s basic values, perceptions, preference and behaviours. People that grow up in this society will tend to have the same cultural values and beliefs. In Australia drinking is like part of the cultural and such beers are easily obtain and this could also lead to why Australia consumed 1770 m litres of beer in 2005 where as it could be different for India cultural has they have only consumed only 784. 3 m litres of beer in 2005.
And in Japan drinking is very common has it is a way to release stress and they consumed 6151. 9 m litres of beer. So cultural do play a part in sales. 5. Product strategies In product strategies, the quality, attribute, branding, labelling, packaging design, service and positioning will make the product and show how good or bad it is. In the beer market there are a lot of beer products some are aimed at lower income people so the labelling and packaging may not be as nice as those premium beers, which are targeted at the higher income group.
Branding also plays a important role as it shows the characteristic of your product and gives people an image that those drinking you beer could show that your in the higher income group and so on. To make each beer unique, the beer company will try to create a beer to target that certain group of people for example low-carb beer for the health conscious people and so on. 6. Place strategies Place strategies consist of channels, market coverage, and wholesaling, retailing and e-marketing options. No matter how good a beer can be, if it is inaccessible it is highly likely that the sales of the beer will not be high.
Beers are usually sold at places where other types of beers are sold to fight as a competitor for share of the market. Channels such as pubs, clubs, super markets and liquor shops are places where people can easily obtain beer. To increase sales each beer company would want to have many channels as possible to make it convenient for consumers to obtain their product. 7. Promotion strategies Promotion strategies are events like advertising, personal selling, public relations, POS, sales promotions and direct communications.
Beer companies tries to advertise as much as possible to keep the public aware of their product and the characteristic of the beer so that when someone sees a consumer drinking the beer, they will roughly know what group his in. advertising for beer are usually in the form of TV adverts or adverts during matches such as EPL or AFL. During certain period to increase sales, beer promotion may happen to attract other brand consumers to try out this beer and hopefully to win them over. In Singapore, pubs usually have happy hour which leads to either cheaper beer or buy one get one free and this attracts a lot of customers and increases sales. . Pricing strategies Pricing strategy involves around demand, psychological pricing tactics, price adjustments and competitors. As there are a lot of beer brands out there, most beer company wants to keep their price range the same as their competitors or lower. But there are instances that companies will price their beer higher to give the consumer a feeling that by drinking this beer it is better in quality and shows to the other that he is a higher status person who can afford to drink premium beer.
It the 1 company beer image and target group is the same as another a price would could happen just to win customers. 9. Conclusions In conclusion the beer market is still growing strong as the consumption of beer has been increasing and with the changing preferences of consumers, the beer industry is able to cope with it too. Although the ingredients of beer are increasing, price of beer has not increase by a lot. But if this would to continue and prices of wine is to remain low, people may change to drink wine, as it is cheaper and good for health.
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