Strategic Marketing Plan: Carlton United Brewers - Case Study Example

Strategic Marketing Plan Introduction and Overview This strategic marketing plan focuses on Carlton United Brewers (CUB),Foster’s Group Ltd SUB. It analyzes the current market, competitors and identifies relevant trends that will influence the company’s market in the near future. The analysis looks at the strengths and weaknesses of Strongbow Cider in the Australian market and how they influence the company’s response to the opportunities and threats in the market. The report also analyses the features of Strongbow Cider and the benefits of such features to consumers in the market. Based on the analysis of the report, the report identifies the target markets whose needs match with the benefits of Strongbow Cider. Finally, the report identifies the targets for the company’s penetration into the Australian market, and lists relevant strategies that the company will use to achieve its strategic marketing goals. The last part of the report also includes recommendations on future objectives and strategies that can be used to achieve such objectives. Organizational-level situation analysis Carlton United Breweries Review Carlton United Breweries (CUB) is an iconic company in the Australian market that has emerged as a market leader in a number of brands in its product portfolio. The company is a Strategic Business Unit of Foster’s Group Limited that has managed to produce quality brands in the beer market hence its leadership positions in most of its brands. CUB has been involved in the production of cider for the last 120 years and has a good record of creating a leadership position for Strongbow Cider in the Australian market for all these periods. Company Goals The goals of the company are derived from the values of the company which include belief, bravery and bonds. The belief of the company is that the company is united by a special bond created by its beer and that if more people are involved in using the beer then the world would become a better place. The company also values the existence of strong bonds between the company and its colleagues, customers and the society. This bond ensures that the company records exceptional performance as a result of getting involved with people who share a common belief of creating a strong bond. The company is brave enough to create a market gap and acting on the opportunity with the maximum efforts. Corporate Appraisal The focus of the strength and weakness analysis is on 3C’s including corporate resources, corporate culture and corporate stakeholders. The analysis also includes the senior management of the company, historical trends and risk management. Corporate Resources The company has a massive capital outlay invested in the marketing and promotion of Strongbow Cider in the Australian market. The company managed to increase 4.1% investment spending on advertising and promotion from 2010 (Foster’s Group Ltd 49). The massive capital outlay of the firm has enabled it to adopt a comprehensive marketing strategy that involves the combination of both advertising and promotion. This has seen the company dedicate a whole website to the advertisement of Strongbow Cider. The company has also adopted the use of electronic marketing in advertising and promoting Strongbow Cider. The use of the electronic media enables the company to reach a wider market of its market because the internet has a very large number of users. This is strength for the company that improves its chances to reach a larger market share hence creating a competitive advantage. Generally, the massive capital outlay is a boost to the company’s marketing strategy. Corporate Culture The company has a very strong organizational culture which has seen the company perform exceptionally well in the Australian market for Strongbow Cider. The corporate culture is based on the values of the company which has managed to unite employees through a strong bond believed to have specifically been created by a beer. The company also has a culture of friendship and unity aimed at improving satisfaction among its customers (Graham 99). However, the culture of the company overlies on the values of the company which narrowly focuses on the production of beer while ignoring cider. This is a weakness for the company since the employees of the company may overlook the interests and needs of consumers demanding Strongbow Cider in the market. Corporate Stakeholders Major Corporate stakeholders include employees, shareholders, the government and colleagues. CUB has managed to create relationships with its corporate stakeholders who have made commitments to improve the operations of the company. For instance, the recent acquisition of Foster’s Group Ltd by SAB Miller is a boost to the financial capability of the company given the fact that acquiring company is the second largest beer manufacturer in the global market. The recent demerger of the company brought about some changes in the management of the company including the Board of Directors through reshuffling. It increased the number of the stakeholders in the company by including SAB Miller as the major stakeholders of the company. There may develop a conflict of interest between the different stakeholders in terms of differences in business strategies. Senior Management The company has a well diversified senior management that ensures effective management of the operations of the company. The recent demerger led to the company’s appointment of three new members to the board of directors. This brings a wealth of experience to the company and assistance in the management of company operations. The senior is also well motivated through the establishment of a long-term remuneration plan. The plan seeks to compensate and motivate senior management for their efforts towards the success of the company. The company also has a human resources committee that is responsible for the formulation of policies that assist the senior management in attracting, retaining and motivating high caliber of executives. This is a strength to the company because it encourages enhanced performance in the company. The senior management of the company has also managed to design a remuneration strategy aimed at driving a culture of performance. The strategy outlines that the company pays its senior management around the industry median level. The median pay is determined by selecting the pay of different companies in a similar industry. The company offers its remuneration based on the 75th percentile of the market median so as to facilitate exceptional performance (Foster’s Group Ltd 24). The senior management of the company faces the challenge of designing policies that may not be implemented effectively by junior staff because the long term remuneration established by the company is not inclusive. It mainly serves to benefit the senior management while ignoring the junior level employees who are responsible for the implementation of the designed policies. Analysis of Environmental Opportunities and Threats The company’s recent demerger creates an opportunity for the company to access new markets. In 2011, Foster’s Group Ltd was acquired by SAB Miller which is listed in both in the London and Johannesburg stock markets. This creates an opportunity for CUB to easily enter the British and South African Markets (Thompson 118). This is made easier because SAB Miller has dominant position and presence in the two markets. The company will be able to make an entry into new and emerging economies such as Africa hence improving its presence in the global market. However, the company faces stiff competition in the cider market as indicated by its decreasing revenues. The company also faces the threat of losing its focus on its primary products such as beer when it focuses on cider. The expansion of the company into new markets also creates a threat to the company in the sense that different markets have different regulations and political environments. For instance, Africa has a volatile political environment which may adversely affect its operations during periods of elections. Lion Nathan National Foods CUB’s major rival in the Australian market (Plunkett 187). Product-level situation analysis CUB is the market leader in the Australian market for Cider and has maintained that position for a very long time. Strongbow Cider is considered to be the strongest cider brand in the Australian market. The product’s market segment includes adults aged above eighteen as recommended by the laws of Australia. The current market segment for the Strongbow Cider includes adults aged between 28 to 35 years. This market segment is characterized by employed individuals who have an income and are therefore able to purchase the product on a frequent basis (Penrith 179). The Strongbow Cider has a unique taste that includes a blend of bitter and sweet tastes because it is manufactured from apple fruits and fermented with some levels of yeast. The product also has additives such as artificial sweeteners that are primarily responsible for its sweet taste. The product also has some varied levels of alcoholic content that make it suitable to adults only. This is in line with the rules and regulations in Australia that restrict the consumption of alcoholic products to individuals aged 18 and above. Despite the product’s focus on employed adults, the potential target market for the product includes the youth generation that is characterized by the demand for high energy drinks (Grey House Publishing 200). Strongbow Cider currently is the market leader in the Australian market and faces very stiff competition from beer. According to market statistics reported by Nielsen, cider sales are gaining momentum but are followed closely by premium domestic beers and imported premium beer respectively. This can be attributed to the fact that Strongbow Cider is cool and refreshing compared to beer. However, beer is also creating a competitive advantage from the fact that they contain very low levels of Carbohydrates. Another competing product is ready to drink spirits which has managed to attract a significant portion of youth consumers (Penrith 290). The estimated sales volume for Cider is 26 percent followed by domestic beer at 20 percent and imported premium beer at 14 percent. There are positive prospects of the cider market growing in the near future and as such Strongbow Cider will be able to create an overall dominant position in the market for alcohol because it is the market leader in the cider market. Strongbow Cider is also targeting the youth generation aged between 18 and 28 which points to a positive future for the product in the market. The youth consumer market segment has recorded a consistent growth pattern in the last five years with most of the youths are making preference for cider drinks over beers because of their high levels of energy. Strongbow Cider has been able to meet such needs (David 40). Review of Past Performance CUB has managed to effectively market the Strongbow Cider brand which has become a leading brand in the Cider market. This can be attributed to the company’s effective marketing strategies. The main strategy has been personalization and the use of electronic marketing in the advertising and promotion of the product. According to the company’s marketing manager, the brand has also managed to exceed the expectations of the company regarding the expected levels of sales in the Australian market. In 2010-2011, CUB managed to record sales volume of approximately $110 million. The advantages associated with the above strategies are that the company has managed to create and sustain a dominant position in the market for a long time. The use of electronic marketing reduces the cost of operations for the company because most of the product marketing is done over the internet. The company has managed to market its product to a wider market segment as indicated by the overwhelming sales volume from Strongbow Cider (Business Press Hoovers 110). Personalization of the Strongbow Cider brand has also managed to create loyal customers for the product in the market. Despite recording overwhelming results in the sale of Strongbow Cider, CUB’s marketing strategies have a number of limitations. The major limitation is that the use of electronic marketing limits the ability of the company to pursue its strategy on personalization of Strongbow Cider. This is because the product is advertised online via the internet. The company also has to incur huge costs in terms of maintaining new and evolving technology (Thompson 117). The other disadvantage of the use of electronic marketing is that it creates stiff competition because of the effects of globalization. Work Cited Business Press Hoovers. Hoovers Handbook of World Business 2011. New York: Hoovers Inc, 2011. David, Thompson. Convenience store. Chicago: William Reed Ltd., 2005. Foster’s Group Ltd. Foster’s Group Limited Annual Report 2011. Sidney: Foster’s Group Ltd, 2011. Graham, Thomas. Thomas food & beverage market place. Grey House Pub., 2001. Grey House Publishing. Food and Beverage Market Place. New York: Inc Grey House Pub., 2007. Penrith, Deborah. Live & work in Australia. Chicago: Crimson Publishing, 2009. Plunkett, Jack. Plunketts Food Industry Almanac 2006. Plunkett Research, Ltd., 2006. Thompson, John. Strategic management: awareness and change. New York: Cengage Learning EMEA, 2005. Read More