The Expanded Marketing Mix - Term Paper Example

Fosters Group Limited The Expanded Marketing Mix A comprehensive study of the traditional and expanded marketing mix hemant Table of Contents Particulars Page No 1.0 Introduction 3 2.0 Product/Services 4 2.1 Existing Products/Services 4 2.2 New Product Recommendation 5 3.0 Pricing 6 3.1 Existing Pricing Objectives, Policies, Strategies and Procedures 6 3.2 Pricing Evaluation 7 4.0 Distribution 7 4.1 Existing Distribution Objectives and Strategies 7 4.2 Distribution Recommendations 8 5.0 Promotion 8 5.1 Existing Promotional Objectives and Strategies 8 5.2 Promotional Budget Improvements 9 6.0 Expanded Marketing Mix 10 6.1 People 10 6.2 Physical Evidence 11 6.3 Processes/Programming 11 6.4 Partnerships 12 7.0 Reflections and Evaluations 12 8.0 Conclusion 13 9.0 References 14 1.0 1.0 Introduction This report has been drafted in a comprehensive and synchronised manner to provide readers with a complete understanding of the significance and implication of expanded marketing mix in context to an Australian Organization. For easy understanding of the topic “Foster’s Group” has been selected as the company and a complete analysis of the pricing, distribution, promotion, product and services along with expanded marketing mix has been explained in context to the same. The report initially focuses on the various existing products and services offered by Foster’s Group along with new product recommendation as per current market needs and wants. The report then highlights the pricing objectives, policies, strategies and procedures of the company with an understanding of how the prices are set on basis of cost, demand and competitive criteria. The report then moves to provide readers with the knowledge of distribution objectives and strategies and recommendations for improvement in the same. The promotional objectives and strategies of Foster’s Group are also discussed in detail with means to improve the promotional budget for better growth and results. Finally after the discussion of the 4P’s of the marketing mix the expanded marketing mix in terms of people, physical evidence, processes and partnership in context to the organization is discussed in detail to highlight upon the significance and implication of expanded marketing mix and a conclusion is provided to ensure the readers are provided with theoretical and practical knowledge of the entire topic under study. 2.0 Products/ Services Foster’s Group Limited is an Australian based premium global beverage company serving its loyal customers with a portfolio of beers, wines and spirits to millions of customers all across the globe. Let us have a look at the complete product portfolio of the company discussed in the following paragraphs. 2.1 Existing Products and Services Fosters Group Limited is a global beverage company serving its customers with high quality wines, beers and spirits and is known for its constant and excellent taste which is specially designed as per the taste and preferences of the Australian population and is loved and consumed by consumers all across the globe. Fosters manufactures the Australia’s most famous beer “Foster Large” and includes various other beer brands like Victoria Bitter(VB), Crown Larger, Carlton Draught and Cascade Premium Large. Its product portfolio also included world’s finest quality of wine such as Wolf Blass, Saltram, Matau, Beringer and Chateau St Jean. Wolf Blass is known for its finest taste and quality all across the globe. Furthermore the Fosters Larger is also recognized as the world’s most selling beer brand with a consumption of over 100 million cases per year all across the globe and is recognized as the flagship brand of Fosters in the world serving customers and needs across 150 countries. Fosters Group key to success is its constant taste and quality products which is specifically brewed in over 20 plants across 9 countries and are labelled and packed in exclusively owned Fosters plants. The beer are packed and served to consumers in various shapes and sizes of bottles which range from canned beers to pint and large bottles. The bottles are labelled with all necessary information which includes the ingredients, manufacturing dates and maximum retail prices along with statutory warnings and expiry dates. The quality of the beer is ensured by passing each lot of beer through a mechanised system of brewing and ensuring best taste and premium quality products however, the company can look upon some better specifications in its designing by ensuring a bottle opener in its bottled caps which has been recently used by one of its major competitors Tuborg Limited. Fosters Group Limited can further look to improve upon its quality in context to its brands such as Miller Genuine Draft, Newcastle Brown Ale and Melbourne Bitter by ensuring a better refined and brew system as these beers are more stronger in range than the premium quality beers offered by the company. Furthermore the water quality and smashed bran of these products need to be improved to ensure a better marketing response and add these products to the range of premium quality beers for which the company is known and renowned for on a global basis. 2.2 New Product Recommendation Carlton lights was a new product launched by Fosters Group Limited into the Australian markets to provide its customers with a taste of low crab ultra light beer as can be regarded as a potential service as the same was introduced to delight their customers by finding a new and better way. Furthermore the company has always looked for new innovations in its existing product portfolio to gain a competitive edge over its rivals. Fosters certainly has ample opportunity to add new product to its existing list and look upon an innovative product targeting customers who are health conscious and likely fear of obesity by designing a completely new product to eliminate such issues (Chrisan, 2001). Fosters Group Limited can also look to add upon a Zero sugar ready to drink product along with other non-alcoholic beverages and can also look upon extending its product line by launching its own packaged water and soft-drinks and special low-alcoholic beverages specially designed for ladies and women. 3.0 Pricing Pricing plays an important role in any organization as they are the way to revenue generation. Let us look at the pricing objectives, policies, strategies and procedures along with pricing evaluation of Fosters Group Limited in context to the same. 3.1Existing Pricing Objectives, Policies, Strategies and Procedures Pricing is a crucial element in a competitive market and is an important element of traditional marketing mix. Fosters Group Limited follows a competitive pricing with price skimming strategy for its products as the company does not wants to penetrate into the existing and potential markets by keeping the prices of their products low as the company’s other products are already higher in cost when compared to other brands in the market owing to its premium quality products. The company was successful in gaining the first mover advantage in introducing one of its premium products Carlton light with a premium price. The product gained higher sales with a premium pricing strategy as it was able to satisfy the needs and wants of health conscious consumers in Australia (Daniel, Charls & Joseph, 2003). Furthermore Fosters uses a unique strategy of keeping the supply of its products low so as to ensure that the product does not becomes a commodity and as the result of the same pricing is kept high to support the exclusivity of its premium wines and beer. However it is to be noted that Fosters in no sense looks to target the higher income level group of the customer pyramid but its products are meant for all as groups as its price ranges from cheap run-of-the-mill bear like Victoria Bitter to expensive and premium brands like Cascade. The main objectives, policies, strategies and procedures of its pricing criteria are to ensure the following. To create a niche market of its own brands in Australia and other operating countries all across the globe. To ensure a competitive edge over its pricing strategies and taking advantage of premium pricing owing to its high customer loyalty and brand equity. To set up price on basis of a price-quality criteria and not just on the basis of demand and supply moves in the market. To offer a wide range of price as per products costing and quality. 3.2 Pricing Evaluation As discussed in the above paragraph that Fosters aims towards price skimming strategy and offers a variety of price range to its products targeting all segments of the customer pyramid. The Fosters Group Limited looks towards competitive pricing strategy however the prices are more set as per the quality and cost of manufacturing the products then on the sole basis of demand-supply criteria (Drummondand Ensor, 2001). The prices of the products are set up by adding a mark-up to the cost of the products and witnessing how the similar quality products are fairly charged by its competitors. Demand for the products of Fosters are always on the higher side and the company in no sense prices its products as per rising demands but rather focuses on quality-pricing criteria with an aim of matching the same with competitors prices. 4.0 Distribution 4.1Existing Distribution Objectives and Strategies Fosters, unlike any other company look to ensure a healthy distribution system so as to ensure timely delivery of its products and services. Place or distribution plays an important role in ensuring that the products are available to the customers when and where they wanted. Since majority of the products manufactured and sold by Fosters Group Limited constitutes alcoholic drinks it needs to adhere to strict governmental rules and regulations on the same. Beer is not available everywhere but has specific locations like Bottle shops, Liquor shops, pubs, restaurants, hotels etc. The company has been successful in establishing a wide distribution network all across Australia and many parts of the globe. The products are usually domestically transferred through road transport and in international market via shipping (Duncan, 2008). The major objective is to ensure that demands of the product are equally matched with the availability of the products and to ensure that the company relies both on its own logistics network and outsourcing the same through an insurance system for safety and security purposes. 4.2 Distribution Recommendations Fosters Group Limited has been successful in ensuring an effective distribution system in most developed countries across the globe however needs to improve upon the delivery process in countryside and developing targeted markets through a use of outsourcing logistic system. The company can look upon technological advancements for ensuring an effective distribution system. Use of voice picking and laser-guided vehicles shall ensure a better and quicker distribution system (Cook & Dave, 2004). Furthermore the company can look upon the latest laser-guided forklifts which can move pallets safely and smoothly though various distribution centres of Fosters. The company can also look upon the Just-In-Time technique system to reduce upon fuel costs, stock compile, delayed customers order and overtime costs. 5.0 Promotion 5.1 Existing Promotional Objectives and Strategies Promotion is an important element of marketing mix as it helps in satisfying the mutual exchange between organization and its targeted market through information, education and persuading the consumers about the benefits of the products and services over the competitor’s similar products. Fosters Group Limited main promotional objective is to make its potential consumers aware about the various products offered by the company and how the same is unique and are developed as per the needs and wants of the consumers. Fosters uses various promotional tools to ensure that consumers are provided with all necessary information about the products and are educated about both benefits and detriments of its alcoholic products offered. It uses various strategies to promote its business for example, entering into sponsorships of various sports and adventures events, using television advertisements, billboards, hoardings etc to advertise its products, offering discounts and coupons, bulk discounts for large purchasers, freebies like glasses, t-shirts, gifts etc (Clegg & Walsh, 2004). Furthermore promotion is done through premium lifestyle magazines and through one-to-one marketing to ensure that the products premium are not undervalued. Fosters also uses internet as an effective medium to promote its products. It is to be further noted that since the products are mostly alcoholic in nature it follows strict governmental rules while promoting its products and mention the statutory warnings as required by the government in differing states making its promotional strategies both safe and sound from the companies perspective (Daniels, Radebaugh & Sullivan, 2007). 5.2 Promotional Budget Improvements Fosters already has a strong promotional budget however the company can strengthen upon the same by allocating more funds in promoting its products in the developing countries and countryside areas of Australia. It should look towards development of responsible drinking programmes to explain how much consumption should be made and explain both benefits and detriments to its consumer’s health. Furthermore seasonal discounts and offers during the festive seasons can be regarded as effective promotional strategies to boost up sales and revenue during both seasonal and unseasonal durations. 6.0 Expanded Marketing Mix Traditionally the marketing mix consisted of 4 basic P’s which included Product, Price, Place and Promotion. However with business development and marketing efforts an expanded version of marketing mix is eyed upon by the marketer which apart from the basic 4P’s includes People, Physical Evidence, Processes and Partnership. Let us have a look how the same can be used to improve on the performance of Fosters Group Limited. 6.1People People in context to any organization play a key role as they are the only rationale things involved in the entire business process. Fosters should look upon people to both promote and sell their services and products as people deliver services and service quality is the essence of higher customer satisfaction and larger growth and revenue for the organization. Manner and appearances of the people, products and services play an important role in establishing brand equity of Fosters (Brassington and Pettitt, 2001). Furthermore designing products as per customer needs and wants along with specific solutions to customer’s problem like need for a low calorie ready to alcoholic drink can help Foster create a revolution in the alcoholic industry and gain advantage of first mover over its competitors. Furthermore Fosters need to hire the best people in the business who are equipped with the use of latest technological advancements which shall help the company to establish a strong customer base and distribution network along with improvement and innovation of new ideas and products in its business operations and process. 6.2 Physical Evidence Physical evidence is a form of service to attract more of customers towards the products offered. It includes factors such as ambience, layout, decoration and other additional facilities. However the same in context to Fosters Group is different as physical evidence for Fosters include a tight management control system to regulate upon its suppliers and ensure timely distribution network system. However, Fosters can look upon opening its own exclusive pubs or Foster Centres with permission from the local government which sell exclusively all variants and SKU’s of Fosters products attracting more business for the company. It can also look upon physical evidence as a means of decorating their websites making it more attractive and appealing and ensuring a user friendly interface for easy use of such websites along with customer complaint redressed forums and inviting more innovative ideas to design more suitable products as per specific needs and wants of consumers (Chen, 2003). 6.3 Process/Programming Processes/Programming includes how customers are handled all throughout the business system. Fosters should look to ensure easy accessibility to all its products and services offered. It include strengthening upon factors such as mode of payment facility where Fosters need to ensure that all its suppliers are provided accurate exchange rate system as it operates on a global basis and payments are made accurately and within the credit period. Furthermore booking of orders must be done on an accurate and timely basis to avoid any delay in distribution system. Speed and timing here plays an important role as customers may get agitated and leave the product due to delay without actually purchasing the products. Customer satisfaction along with a friendly behaviour here are important elements to ensure more loyal customers (Chawla, 2003). On the other hand, Fosters also can look upon improving on its physical process or brewing and mashing the bran to produce beers by help of technological advancements to ensure better quality products. Technology can help fosters to ensure a better process and programming system for handling its suppliers and customers in terms of both product quality and additional features like payments, booking system, delivery process etc. 6.4 Partnerships Fosters has a huge presence and is virtually the market leader in Australian beer segment however it can look upon entering into partnership with wine companies to strengthen its position in the wine industry of Australia. Furthermore, in establishing a global market it can look upon entering into joint ventures and partnership with local companies of the targeted country which shall ensure easy delivery system and low cost to the company with a larger targeted audience. Entering into partnership or alliance with larger beer giants like Budwiser can help the company to develop new products and penetrate deeper into the global markets. In a nutshell, Fosters can earn a brand equity and attract more loyal customers by entering into specific partnerships as per market needs and wants to deliver a higher customer satisfaction and having a direct positive impact on its sales and revenue to emerge as the global leader in alcoholic industry which includes both beers, wines and other forms of alcohol. 7.0 Reflections and Evaluations Fosters Group Limited has been constantly facing issues and problems in context to maintenance of its brand portfolio. Furthermore the company is facing a strategic gap as the Wine and Club service of Fosters had suffered a decline of 25% in its FY13 EBIDTA because of serious effects of taxes related to wine equalization in Australia. Moreover the companies wine business has accounted for a total share of 55% of its total sales in 2013 in context to34% in 2009 (Annual Report 2013. 2013). The steep decline in the trend of wine revenue coupled with that of the increasing sales revenue has not argued well for the company and has largely impairs its competitive edge. A major opportunity for the company is the Southcorp acquisition for growth in Australia and achieving category leadership and ensures a better competitive edge in both beer and wine industry segments. Research indicates that Fosters can look towards targeting its market specifically by bifurcating its brand portfolio into two business i.e. catering the catering the premium beers and wines segment separately. Fosters may also look to acquire one of the unique and recognized global brands in wine segment with loyal customer base to respond to competition at a faster rate and remove one of the core competitors (Hill & Jones, 2004). In a nutshell Fosters Group Limited has no real threat in the beer segment however its wines segment requires real churning and marketing efforts to balance its business and brand portfolio and emerge itself as a leader in the market. 8.0 Conclusion This report has been drafted in a manner to provide readers with an understanding of the marketing mix of Fosters Group Limited by specifically focusing on each element of the marketing mix current scenario and future recommendations. Furthermore the significance and importance of expanded marketing mix in context to Fosters Group Limited has been explained in detail to ensure that readers are equipped with theoretical and practical understanding of the entire topic under study. 9.0 References Annual Report 2013. (2013). Foster's Group. Retrieved May 31, 2014, from http://www.fostersgroup.com Brassington, J. and Pettitt, M. (2001). Principles of Marketing, 2nd Edition, Prentice Hall Chrisan, P. (2001). Marketing: A Behavioral Analysis, McGraw – Hill. New York Clegg, C. & Walsh, S. (2004). Change Management: Time for a change. European Journal of Work and Organizational Psychology, 13 (2), pp. 217-239 Chen, I. (2003). Understanding Customer relationship management: people, process and technology. Business Process Management Journal, 9 (5), 672-688 Chawla, A. (2003). Marketing Management for Airline Industry. Workshop on Marketing of Educational Institute, Programme and Services Cook, D. & Dave, D. (2004). Structural element of service quality product. International Journal of Business Performance Management, 6 (2), 189-207 Daniel, C., Charls, L. & Joseph H. (2003). Marketing, 5th edition, south-western. New York. Duncan, T. (2008). Principles of Advertising & IMC, 2nd ed. New York: McGraw-Hill/Irwin Drummond, G. and Ensor, J. (2001). Strategic Marketing, planning and control, 2nd Edition, Butterworth Heinemann. Daniels, J.D., Radebaugh, L.H. & Sullivan, D.P. (2007). International business: environment and operations ,11th edition. New Jersey: Pearson Education Hill, L.W.Ch. & Jones, R.G. (2004). Strategic management: An integrated Approach. (6th ed.). Boston: Houghton Mifflin Company Read More