International Marketing - Essay Example

International Marketing - Alcopops Sector of the Flavoured Alcoholic Beverages (FAB) Industry - Date Total Number of Words: 1,137 Introduction Alcopop is the term used in describing flavoured alcoholic beverages (FAB). Because of the fruit flavour added to alcoholic drinks, alcopops became more appealing to teenage and underage drinkers (Marine Institute, 2009). A good example of alcopop produced in UK is the Smirnoff Ice. For this study, an environmental analysis with regards to the market of Smirnoff Ice in UK will be conducted. Based on the environmental analysis using the PESTLE analysis, a marketing strategy for the product will be provided to encourage market growth between the years 2009 – 2012. Based on the environmental analysis result, the market opportunity of Smirnoff will be evaluated in order to expand its market internationally. Environmental Analysis Political Climate The two kinds of taxes the UK government imposed on alcoholic drinks are VAT of 17.5% and the excise duties which highly depends on the type of alcoholic drink being sold in the market (Institute of Alcohol Studies, 2009). There is a significant relationship between tax and alcohol consumption such that a higher tax would mean lesser alcohol consumption and vice versa. Economic Factors The local employment rate in UK varies depending on selected regions. In Wales alone, 70% of the total population is currently employed whereas the unemployment rate in Wales is around 7% as of March 2009 (Office of the National Statistics, 2009b, c). Basically, the higher the employment rate would mean the higher chance that alcoholic beverage companies will be able to sell more alcoholic drinks in the local market. Social or Socio-demographic Trend The total number of UK population has reached a record of more than 61 million as of 2009 (Whitehead, 2009). In line with this, the higher the population the better alcoholic beverage company will be able to sell alcoholic drinks within the domestic market alone. Technological Trend Because of improvements in technology, Smirnoff is able to introduce the first malt beverage that contains pure spring water and a malt-based alcohol (redOrbit, 2007). The use of new alcohol beverage technology enabled the company to offer light and crisp alcoholic drink with refreshing taste. Legal Aspects Specifically in England and Wales, alcohol beverage licensing is governed by the Licensing Act 2003 whereas the licensing in Scotland is governed by Licensing (Scotland) Act 1976 (Institute of Alcohol Studies, 2009b). To control and maintain public safety issues, the licensing of alcoholic beverages enables the government control on where, when, and to whom alcoholic drinks can be sold. In line with this, individuals below 18 years of age are not allowed to drink alcoholic beverages. In Scotland alone, on licences between 11am – 11pm legally allows pubs and clubs to sell alcoholic drinks for consumption within or outside the store premises. Between 8am – 11pm, off licences allows the selling of alcohol for consumption outside the sellers’ premises (Institute of Alcohol Studies, 2009b). Environmental Factors It is a marketing misconception that people should drink more alcohol during cold weather. In line with this, it has been reported that alcohol consumption combined with cold weather recreational activities like ice fishing or downhill skiing can lead to an untimely death (Minnesota Prevention Resource Center, 1998). Marketing Strategy for Smirnoff between 2009 – 2012 Since Smirnoff cannot sell alcopops to individuals below the age of 18 years old, the company should focused on marketing the product to men and women 18 years old and above. In line with this, the company should tie up with existing clubs, pubs, and large-scale supermarkets who could sell Smirnoff products in domestic market. Since these well-established stores have already a network of consumers, Smirnoff can be save a lot of money from unnecessary expensive advertising expenses. Opportunity for Smirnoff Products in International Market Expanding Smirnoff products in international market is good since it can open a lot of business opportunities for the company. As part of expanding the business in Germany, Smirnoff should design a core marketing strategy which includes defining the market segmentation and analysing the 4Ps in marketing mix. Once the market analysis has been conducted, the company should start identifying potential market distribution network for Smirnoff products. Core Marketing Strategy Germany is one of the most populated countries around the world. In line with this, tapping the market of Germany will enable Smirnoff open up a bigger business opportunities. Detailed Segmentation Socio-Demographic Segmentation Regardless of gender and ethnicity, the target consumer of Smirnoff are individuals 18 years old and above. Since Smirnoff Ice is a trend beverage for younger adults, most of Smirnoff Ice drinkers are between the age of 18 – 25 years old. Lifestyle or Psychographics Segmentation The lifestyles of individuals who are the target consumers of Smirnoff are party-goers who are willing to spend more on alcopops. Geographic Segmentation Target consumer of Smirnoff is not sensitive to geographic segmentation. Regardless of the geographic segmentation like state, region, city or community, people in Germany who are more than 18 years of age can be considered the target consumer of Smirnoff. Marketing Mix (4Ps) Product Smirnoff has a wide-range of product including the classic Smirnoff Red Label vodka flavoured with Nordic Berries, Smirnoff Classic Mix with either lime soda or cola, Smirnoff Vodka and Cranberry Juice, Smirnoff Black, Smirnoff Blue Label Vodka, Smirnoff Twisted V Green Apple, Smirnoff Pomegranate malt beverage, Smirnoff Ice Raspberry Burst malt beverage, Smirnoff Ice, among others (Smirnoff, 2009). Price Price of Smirnoff products are usually high. A bottle of 275ml would normally costs around €5 whereas the same bottle would normally costs around €2.5 in a gas station (Ciao, 2009). With the price of €8 for six-pack, Smirnoff products are cheaper when bought from a supermarket. Promotion As part of promoting the product, the company should use a combination of television advertisement, print advertisement on news papers and magazines as well as on-line news report and advertisements. This will inform the public about the Smirnoff product. Place Smirnoff can sell the product in supermarkets and convenience store or in disco houses, clubs, and bars where people would normally go for alcoholic beverages. Scheduled Time Frame In 2009, Smirnoff should first consider the target international market which is Germany. Eventually, the marketing manager should the total population in Germany, the market segmentation, and the 4Ps in marketing. As soon as all these requirements have been completed, the marketing manager can start conducting special product promotion and expanding its market distribution starting on the third quarter of 2009 onwards to 2012. Conclusion Using the PESTLE analysis framework enables marketing managers to effectively and easily analyse the environmental factors that can affect the market growth of Smirnoff. In case of expanding the business in an international market like the Germany, the use of market segmentation and the 4Ps in marketing mix will enable the marketing manager come up with a better business strategy in terms of making the product available to its target consumers. *** End *** References Ciao. (2009). Retrieved November 8, 2009, from My Favourite Summer Drink: http://www.ciao.co.uk/Smirnoff_Ice__Review_5357460 Institute of Alcohol Studies. (2009). Retrieved November 8, 2009, from Alcohol: Tax, Price and Public Health: http://www.ias.org.uk/resources/factsheets/tax.pdf Institute of Alcohol Studies. (2009b, January 16). Retrieved November 8, 2009, from Alcohol and the Law: http://www.ias.org.uk/resources/factsheets/law.pdf Marine Institute. (2009). Retrieved November 8, 2009, from Alcopop: http://www.marininstitute.org/alcopops/resources/Alcopop_QA.pdf Minnesota Prevention Resource Center. (1998, January). Retrieved November 8, 2009, from The big chill: alcohol and hypothermia: http://www.emprc.org/jan98/chill.html redOrbit. (2007, May 11). Retrieved November 8, 2009, from Diageo Introduces Low-Alcohol Smirnoff Source: Spring Water + Alcohol: http://www.redorbit.com/news/business/933313/diageo_introduces_lowalcohol_smirnoff_source_spring_water__alcohol/index.html Smirnoff. (2009). Retrieved November 8, 2009, from Official Website: http://www.smirnoffice.com/ Read More