Carlton & United Breweries Marketing Performance - Essay Example

COMPANY REPORT By Name Course Instructor Institution City/State Date Carlton & United Breweries Report 1.0 Introduction Carlton & United Breweries (CUB) is a brewing company located in Abbotsford, Australia, and three decades ago it became completely owned by Elders IXL (CUB, 2013). Elders IXL changed its name to Foster's Group in 1990, and fourteen years later, the name was changed to Carlton and United Beverages. CUB creates scores of Australia's most flourishing beverages, which includes the best selling beer in Australia, Victoria Bitter (VictoriaBitter, 2013). In this regard, the study mainly concentrates on marketing of Victoria Bitter. Marketing is defined by Hsu (2011, p.227) as a social process wherein groups and entities get hold of what they desire and need by means of producing and exchanging value and products with others. Undoubtedly, marketing is fundamentally about mobilizing the organization resources of in order that they meet the shifting customer needs o on whom the company relies (Watne & Hakala, 2013, p.57; Belz, 2006, p.141). The report seeks to examine the marketing environment of Carlton & United Breweries. 2.0 Background and Sustainable Practices Presently, CUB maintains its connections with brewing legacy of Australia while still developing a portfolio of preferences through novel product innovation.  Without doubt CUB is Australia’s leading brewer, with over 50 percent market share (CUB, 2013). CUB encompasses a sales team of a substantial scale serving more than twenty thousand consumers across the off-premise in addition to on-premise channels. What’s more, CUB has eight principles of sustainability that oversee the manner in which they assess and prioritise performance (Owomoyela et al., 2013, p.487). One of such according to Svendsen et al. (2011, p.519) is climate change, water and energy. Importantly, this principle was backed by the goal to decreases energy and water production per unit by 10 percent in the coming two years. Sustainability program was set up to deliver on the organisation’s water and energy efficiency targets as well as make sure they adhere to Australia federal and Victoria state government programs. Undeniably, Sustainability has enabled CUB to carry out standardised evaluation across processes general to packaging, wineries and breweries centres. 3.0 Competitors According to Hede and Watne (2013, p.211), the fundamental aspect in buying decisions made at CUB customer level is the accessibility of a reasonably priced, succulent product of top quality. The vital aspect in beer market is the distribution strategies, and this is mainly so bearing in mind the first-class distribution network that Cascade Brewery has in position allowing them to manufacture products that are always in demand all through Australia (Drechsler et al., 2013, p.301). Main Competitors Name Location Main Brands 1. Castlemaine Perkins Milton, Queensland Summer Bright Lager, XXXX Light 2. Tooheys Lidcombe (Sydney) Tooheys Old, Platinum, Tooheys White Stag, Tooheys Pils, Tooheys Extra Dry, Hahn Premium, Tooheys Extra Dry 3. Cascade Brewery Hobart Mercury Cider, Cascade Light, Cascade Premium Lager 4. SA Brewing Company Thebarton, South Australia Southwark Bitter, West End Draught, 5. Coopers Brewery Regency Park, South Australia Stout, Dark Ale, Original Pale Ale, Mild Ale, Sparkling Ale, Best Extra 3.1 Customers In CUB, there are five profiles for key beer consumer. (A) Loyalist, consisting of 40 percent of alcohol consumers, which according to Veryzer (2005, p.33) is the biggest segment. This segment encompasses the main alcohol drinkers; who do much of drinking on-premise and have a tendency of meeting friends around bee (Ernst et al., 2012, p.82). (B) Experimenters, consist of 25 percent, and are individuals who have fervour for alcohol and care less about price. In this segment, consumers search for matchless taste variety and profiles. (C) Aspirers, consist of 15 percent, and according to Veryzer (2005, p.32), ethnic groups are rifer in this segment and most prefer drinking imported alcohol. (E) Trend Seekers consist of 13 percent, and these customers aspire to create unforgettable occasions around social events. The last segment (F) is sippers, and consists of 7 percent who mostly are females (Sankrusme, 2011, p.72; Owomoyela et al., 2013, p.491). 3.3 Suppliers At present the CUB acquires the enormous majority of its resources from Australian suppliers, but the company is devoted to fair terms of promotion and trade of other businesses and so the company always engages with international suppliers. Therefore resources, which include Barley and grains, are sourced from local and international farmers. Importantly, the company always avoids intermediaries in an attempt to reduce overheads, and in the end benefiting the end-user (Hede & Watne, 2013, p.219). Local Suppliers 1. Bank of Melbourne for all banking needs. 2. Industri-Matematik International Corp. (IMI) for B website design and IT needs 3. Green Care Cleaning for all commercial cleaning needs 4. AAMI for insurance needs 5. Kerbside Recycling collection for recycling and disposal needs 6. Alphaville for employee uniforms, merchandise, and shirts needs 7. DCG Recycling for recycled paper 8. Westnet for Internet 4.0 Victoria Bitter Victoria Bitter (VB) is Australia’s favourite lager created by CUB, and its foundation date back to Thomas C. Moore, the founder of Victoria Brewery founder who created the formula early on 1900s. VB according to Healy (2013) started to achieve extensive fame in the mid 60s after an innovative television promotion drive featuring an extremely alike footage of the premise from the film The Magnificent Seven. 4.1 Pricing Pack Price VB 30 pack 375ml cans $42.98-$56.99 VB 24 pack 375ml cans $39.99-$49.99 VB 24 pack 375ml bottles $37.98-$49.99 VB 24 pack 250ml bottles $31.00-$43.00 VB 15 pack 375ml bottles $26.99-$30.99 VB 12 pack 750ml bottles $47.00-$56.50 4.2 Promotion The early catchphrase from 1960 was substituted by "VB – the Drinking Beer" as a marketing strategy to change the position of Victoria Bitter up-market. A decade ago, Victoria Bitter begun a promotion whereby David Boon turned out to be the VB beer face for CUB 2005/06 summer promotion campaign, widely recognized as Boonanza (Healy, 2013). Towards the end of 2013, CUB built the Live Cricket Scoreboard for VB loyalists by presuming that they are cricket enthusiasts. The promotion campaign had a practical outdoor execution, with enormous scaled versions positioned in Melbourne, Brisbane, and Sydney which was more than 15 meters wide and 6 meters high (Healy, 2013). 4.3 Distribution strategies CUB utilises three-tiered beer distribution system with the primary goal of this strategy is to offer sobriety, guarantee systematic market conditions, as well as increase profits. The problem with the system according to Hede and Watne (2013, p.214) is that it heightens the alcohol price (given that there is a middleman involved).  Theoretically, the high prices admonish intemperance, and compel self-control on the civilization. Hsu, 2011 (p.227) argues that if direct sales were permitted, Victoria Bitter could be in a weak position.  Besides, large retailers prefer buying VB in enormous quantities to obtain the finest price possible.  Larger breweries like CUB can manage to weaken competitors’ prices, making it possible for VB to be available at profitable price.  Given that all brewers in Australia must go through an autonomous distributor: this levels the playground for every brewer (Little, 2004, p.16).  5.0 SWOT Analysis Strengths Weakness 1. Strategic implementation strategies as well as market segmentation 2. Branched out market segments 3. Skills integration in directorship 4. Maintenance of firm capital base 5. Antagonistic and concentrated marketing campaign 6. Easy access 7. Cost advantage (Sankrusme, 2011). 1. Low Research and development 2. Stumpy market share 3. Lack online presence 4. Deprived supply chain 5. Shortage of straightforward distribution channels 6. Technological challenges. 7. Stiff competition (Thackeray et al., 2012). Opportunities Threats 1. Approval for premium brew and satisfaction 2. The youth present lucrative market opportunity for VB 3. Formerly isolated areas present potential market 4. Internet sales and marketing 5. Penetration in international market such as China and India Few Beer companies in Australia 6. Increases number of hotels who are potential customers. 7. Few beer companies in Australia (Veryzer, 2005). 1. Economic slowdown 2. Competition 3. Existence of Small companies offering similar products 4. New marketing tactics and strategies by well-known companies and products 5. Unfair promotion strategies by its competitors 6. Unbearable price heightened by foreign suppliers could take place (Belz, 2006). 7. Government policies 6.0 Market Mix CUB marketing strategy stresses on focus, and this has always been the key. VB being a comparatively old brand, CUB has to concentrate on how to improve VB in an attempt to meet the wants of all customers as well as prevail over stiff competition offered by other brands such as Mercury Cider and Hahn Premium (Svendsen et al., 2011, p.521). At first, CUB concentrated on the local market and now it is focusing on isolated and formerly unreachable areas where there exists an enormous market for Victoria Bitter. Therefore, the shape of development that is primarily followed is that of natural development mostly because of inadequate resources as well as the need to instil assurance in VB (Ernst et al., 2012, p.87). The VB targeted consumers include retail shops as well as supermarket chains that order or commend in support of the entire organization, the goal being to get a primary order and completely gratify the client subsequently. Victoria Bitter competitive edge is CUB supremacy of access to formerly isolated areas, even though Cascade Brewery dominates large part of Australian market. VB remains favourite Australian beer owing to the more advanced promotion strategies that are used by CUB to market the brand as compared to other competitors (Thackeray et al., 2012, p.94). 6.0 Conclusion and Recommendations CUB should concentrate on improving its delivery system implementation, by working at fundamental goals and enhanced management of marketing endeavors. Temporarily, Victoria Bitter selling process should rely on individual selling as well as promotion to entice and notify potential customers in past isolated areas concerning the product provided by CUB and the benefits that this product comes with. One fundamental aspect of advertising strategy that CUB should use is the one that differentiate it from the main competitors. Based on promotion, CUB should aspire to sell the company as a differentiated strategic partner, and not only Victoria Bitter. Based on VB price, the company should offer sensible prices as compared to competitors brand and CUB should be in a position to sustain that. Penetration in new markets through lower prices should be embarked on where necessary, whereas quality pricing should remain the case of brands like VB. Bearing in mind the fact that Cub is operating in a market principally dominated by Cascade brewery, CUB must aspire to undertake wide-ranging promotion of its products other than its company name and brand name. References Belz, F.-M., 2006. Marketing in the 21st Century. Business Strategy and the Environment, vol. 15, no. 3, pp.139-44. CUB, 2013. carlton & united breweries. [Online] Available at: http://cub.com.au/ [Accessed 15 April 2014]. Drechsler, W., Natter, M. & Leeflang, P.S.H., 2013. 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