Marketing Plan of a Little Creatures Microbrewery - Essay Example

Little Creatures Executive Summary The brewery seeks to consoli its position in the current Western Australian market and plans to enter into Southern region as well. The target segment is sophisticated 20-somethings - a segment thats straying from domestic brews in favour of imports, spirits and wine. Thus psychographic demographic segmentation will be used here. The company would charge premium price for the quality it provides. Intensive distribution strategy will be followed. Experiential Marketing will be used in its effort to use innovative promotional tools. Situation Analysis Little Creatures is a microbrewery in Fremantle, Western Australia established in 2000 by the original brewers of the Matilda Bay Brewing Company. The brewery is open to the public and contains a café/restaurant. The company operates in one industry, being brewing, and in one main geographical segment, being Australia. Its Chairman is Ian Cochrane and CEO is Jason Marinko. It was founded in 2000 by a group that included directors Howard Cearns, Adrian Fini, and Nic Trimboli with a passion to make (and drink) a particular style of beer .It makes a specific style of pale ale that displays great balance of flavour and refreshment. Because of its ability to deliver a unique flavour experience the brewery has won a number of Australian International Beer Awards. It has been named Champion International Brewery (2002), Champion Australasian Brewery (2002) and the Pale Ale has been named Champion Ale (2002, 2007) and Champion Bottled Ale in 2001.1 (About Us) Mission To rigorously preserve the original culture and environment for the generation of ideas and the passion for being at the forefront of beer industry to grow value for all shareholders.. Vision To be the leading premium branded Beverage Company inspiring enjoyment, responsibly around the world. Goals To be the first choice brand for consumers and the shareholders. Marketing environment A business unit has to monitor some internal and external forces that affect its ability to earn profits. The marketing environment of a business consists of macro and micro forces. Macro environment Forces (Kotler,154)2 are the non controllable forces that shapes opportunities and controls threats for the business. The social, economic, legal, political and technological environment comes under this category. Social Australia is currently ninth3 on the World League Table for beer drinking and while low and full-strength brews were once the staple drink at all Aussie events, their popularity is waning, as theyre replaced by imported and domestic premium beers, wines and pre-mixed, ready-to-drink spirit.The beer consumption by females has gone up considerably and consumers are trading up to premium products to confirm social status. ( Low-carb beer and ready-mix bourbon top of the list for silly season drinkers,30/11/2006) Economic Growth rates are positive due to the strong Australian economy, with significant spending on premium products within each sector. This economic boost has led to more disposable income and increased the consumption of premium products. Political There has been a deregulation of liquor licensing laws that allows restaurants to supply alcohol without patrons having to buy food. This has led to increased consumption of the same. Environmental As the corporate world becomes more environment conscious, there is a strong pressure on the organisations to become environment friendly. The corporates now believe in developing properties that add value to the community. In this direction,the company has plans to build a brewing facility that adopts environmentally “sustainable” practices and an expanded vision of contributing to eco tourism in the area.. Microenvironment forces These factors are in control of the organisation as they constitute the internal environment. SWOT Analysis is done to identify strengths, weakness, opportunities and threats Strengths The quality of products offered by the company is very high and unique. No preservative is added in the products appealing to health conscious customers. There is a proven entrepreneurial management team to carry the operations smoothly. . Due to effective planning and implementation, national sales and distribution capabilities are in place . Weakness The product line is very limited because of which the company is not able to cater to certain sections of the market. Opportunity Deregulation of liquor licensing laws allowing more restaurants and venues to supply alcohol without buying food. Premium beer is the fastest growing beer segment, driven by growth in premium imported beers4 (19.6 percent), growing by 11.2 percent and now representing 16.9 percent of the total packaged beer market Threats The brewery might face strong competition from imported and domestic semi premium beers, wines and pre-mixed, ready-to-drink spirits. The brewery imports hops from US to give a unique flavour to its beer. In case of change in the import policy, the main ingredient responsible for the unique taste might be unavailable. The beer customers are not very brand loyal as there is are continuous changes in consumer preferences and taste. Product Evaluation The product list 5comprises of Little Creatures Bright Ale , Little Creatures Pale Ale, Little Creatures Pilsner and Rogers’. .Little Creatures Pale Ale is brilliantly devised with intense floral, citrus aromas and flavours that exhilarate the palate. Rogers Beer is a smooth amber ale with fresh flavour from a full malt brew at 3.8% alcohol. Little Creatures Pilsner is a, clean, crisp lager, elegantly balanced for refreshment in the style of the great European lagers. Little Creatures Bright Ale is top fermented, filtered (hence "Bright"), unpasteurised, and golden in colour.  The beautiful aromatic hop characters and specialty malt flavours create an approachable new Australian ale style. Beer is a consumer good. Since it is purchased frequently and with minimum effort, it falls under convenience good category. Beer is usually purchased without any planning and mostly the decision is taken at the point of purchase., making it an impulse good.6(Kotler,435).The product is in growth phase of its product life cycle.. There has been a continuous increase in its sales over the past few years. The customers have shown a positive attitude towards the premium beers produced by Little Creatures. The policy followed by little creatures is to have a company trade name with an individual product name. Multibranding7is followed here as the company has introduced new brands in the existing product category. Currently,there are 4 different brands under the same product category. This is usually done to establish various features so as to appeal to a wider segment. (Onkvisit, Shaw, 456). Line extension has been followed to certain extent as different package size of some brands like Pale Ale has been introduced. It is a ‘filling in’8style of line extension.(Kotler 454) Now available nationally at all good liquor outlets in a 568ml size bottle. The 9brand equity (Kotler, 445)is reasonably high as brand awareness is high, brand acceptability is good, brand is preferred over other competitors because of its unique flavour. Packaging for a beer could be a bottle or a can. In case of Little Creatures beers, the packaging is an area where it stands out. Little Creatures’ Pale Ale Pints – a unique bottle mould and design that is supplied exclusively to Little Creatures. It can also be enjoyed straight from unique pintsize bottles – ideal if one wants that “little” bit more, with 568mls of flavour packed into every bottle. The acceptance of the brand among consumers is quite high. The customers rate10 it on five features namely appearance ,smell, taste, mouth feel and drinkability. (Little Creatures) The Pale Ale owes much of its distinctive resinous flavour to raw hop flowers imported from Oregon in the Pacific northwest of the United States .It is the only brewery actually in Australia doing that currently. 11In the seven years of its launch, it has entered some overseas market as well. Little Creatures Pale Ale was launched in the United Kingdom in May 2004, at the London Wine Fair. It is distributed widely with greater sales resources in market to service retailers. The company is also in the process of developing direct distribution capabilities in east coast markets. With its growing demand it has its sales figures soaring every year. For the year to 30 June, net profits from operations came in at A$3.3m (US$2.6m) an improvement on the $2.7m posted in 2006. Total sales reached $26.8m, up 31% from $20.5m a year earlier.( Little World Beverages celebrates FY figures boost,) But since the customer preferences keep on changing, imported and domestic premium beers, wines and pre-mixed, ready-to-drink spirits can replace it. Customer Evaluation The present customers of the product are the young, single, middle income professionals. Defined demographically, they are in the age group of 25 to 39, middle income, upscale professionals. Defined psychologically, they are thought to love adventure sports, fashion, foreign travel and most premium products. They are fun loving and experimental. They have moderate product consumption, which tends to become high on weekends and festive season. Beer buying is an impulsive decision. But it is definitely influenced by the group preferences of which the customer is a part. Many a times, decisions are taken in favour of a brand to show a higher social status. There are five attitude groups12 (Kotler ,277)found in a market: enthusiastic, positive, indifferent, negative and hostile. The customers of this company are positive about it. As the company targets the young professionals who have got more affluent and travelled more, they want to experience more of the different styles of beer from around the world. A lot of the smaller breweries like this and the other craft breweries are able to supply those styles for people to give a chance to taste them. The company is trying to make the indifferent lot to try their products. The target segment come under the category of switchers i.e. those who are not loyal to any brand. They like to buy branded products, and their brand preference is dictated by the brand, which is the “flavour of the month”. The start of summertime kicks off the seasonal uplift in beer sales, which is also coupled with increased marketing. In Australian society, a lot of women drink socially. There should be some additions to the existing product line to suit women taste and preferences. There is a lot of potential in this segment. Competitors The brewery operates in a monopolistically competitive13 market,(Kotler, 227) ,that is, there are a number of players in the market and each player differentiates its offer from the other in part or whole. The players’ focus on segments where they can meet customers needs in a superior way and command a premium price. Direct : The direct competitors are the microbreweries which produce tasty ales.They are Coopers Brewery, Fosters, Lion Nathan.. Popular ‘premium’ beers include Hahn and Crown lager Indirect Besides Australian Beer Brands like Tooheys, XXXX,Hahn,James Squire Craft Beer,West End also exist.Indirect competition comes from international Brands (Brewed under licence)Becks Boddingtons Kirin Ichiban Steinlager pose indirect competition to the brand. The competitors incur very high promotion expenses which Little Creatures cannot afford. They also have a range of products to suit the pockets of a large number of people.So their target segment is very wide. If there are less purchases made by one segment, the other would compensate for it. Leading Australian alcoholic drinks company Fosters14 Group has entered into a domestic brewing partnership with Danish major Carlsberg. Fosters will now add the eponymous Carlsberg brand, Carlsberg Elephant and Tuborg to its premium import portfolio, in an effort to stave off the competition that SABMillers market entry represents.But most of the brands base is a collection of state brands arising from the consolidation, so no strong national brand exists.There is always a threat of wines and imported beer and RTD’s (ready to drink) beverages to replace its products. Fosters 2006 release of Pure Blond signalled the arrival of the first Australian beer marketed directly at the health conscious with its low-carb label. So-called diet beers are tipped to be a major growth market in years to come, as brewers look to cash in on Australians growing interest in healthy lifestyles. (low-carb beer and ready-mix bourbon top of the list for silly season drinkers). So if Little Creatures has to be successful in this competitive industry, it has to make plans to increase its product line. Marketing Objective To enhance our presence in the current market and enter territories of Southern Australia Marketing Strategy Target Market The target segment would be sophisticated 20-somethings - a segment thats straying from domestic brews in favour of imports, spirits and wine. They are in their mid-to-late 20s who are more affluent have grown out of the party scene, might be making more money and now want the better things in life. . These drinkers care more about flavour than they do about calories, meaning they wont automatically reach for a light beer. Also their usage rate is high, they are highly adventurous, are restless, have interest in outdoor sports, love cars and related events. Also woman in the age group of 25-35 would be targeted. They are financially independent, love outdoors, are very status conscious, visit gyms and beauty parlours regularly. They love television and are medium users. Benefits Demographic Behavioural Psychographic Economy Old , retired People Heavy Users Value Oriented, Detached Flavour Young Married Professional Heavy Users Mentally active, Socially Conscious Energy Young, Single, Students Medium Users Physically active, Adventurous Once the target market is decided, then the marketing mix strategies have to be modified as per the target market. Product Strategies In order to successfully target the segments chosen, certain strategies have to be developed. For a product to be successful, a distinctive image should be created in the mind of the customer. The product created should be consistent with the relevant self image of the target customer segment. Here the product’s benefit is its characteristic flavour along with no preservative which is the basis of positioning. Thus 15benefit positioning is used here.(Kotler,96)The product would be launched around Christmas when the people have the time to go shopping and watch television along with family. This way the product would get maximum attention. Word of mouth would also work for it as the people who have seen the prelaunch activities might discuss with friends and relatives over dinner. Also this is the time when health and family welfare are highest on the consumer’s agenda .One means of gaining a competitive advantage is by a differentiation strategy 16(Thompson and Strickland, 1998)i.e. to provide a better product that buyers believe is worth the premium price . Here, Product Leadership stretegy 17 (Kotler,295) will be followed. ie products and service that outperforms competitor would be used.Staff who are friendly, like beer themselves or enjoy others’ reactions to it, and know a bit about the beers on the list, would be employed. Some additions would be made to the existing product line so as to appeal to the health conscious customers. This new range would appeal to one of the other target segment as well, that is, young women. Promotion strategies In today’s competitive world, having the right product at the right place in the right time, might still not be enough. Effective communication with the target market is essential for the success of the product and business. Promotion is the p of the marketing mix designed to inform the marketplace about who you are, how good your product is and where they can buy it. Instead of using the traditional advertising tools, public relations, point-of-sale, online and event marketing would be used. While launching a product in a new territory, a new method of experiential marketing would be used. Product launches would be done in pubs and visitors to that particular pub would be given a free sample. This way the company would target the few to eventually reach the masses. Subcultural events would be sponsored to reach the influential. Events like scooter rallies, dodgeball tournaments, fashion shows, bike messenger races and art openings would be sponsored. This would not cost much to the company, as instead of full sponsorship, a few thousand dollars to print up flyers and posters for the events free beer would be would be supplied. This way the brand would be able to connect with the younger lot. Another strategy called 18Branded Brand would be used wherein two, three, or four separate brands combine their core competencies to launch a so-called "branded brand." Experiential marketing can meet consumers demands for quality marketing experiences in a much more compelling way than traditional marketing can muster. These experiences combine to drive buzz about a brand, and the more experiential the marketing, the better the buzz. (Are you experiential) Sales promotion creates a quicker and stronger response but is not very effective in creating a long run brand preference. Also it is less expensive, cause impulse buying and very effective in buying initial shelf space. Sales promotion could be done by Coupons: Certificate entitling bearer to stated savings on purchase of specific product. Causes early trial of a new brand. Price packs: Offer consumers saving off regular price or single pack sold at the reduced price or two packs sold at the price of one. Premiums: Merchandise offered at a low cost or free on purchase of a product. Point of purchase displays: The display materials at the place where the purchase is made. Have caps, stationary, mugs, uniform with the company name and logo on it. For this product point of purchase displays would work leading to impulse buying. The target market would visit cinema halls on weekends, so special stalls should be put there. Pricing In this case, the new product can charge premium price and offer high quality as the target segment is very flavour conscious. They are educated, affluent, aware customers who won’t mind paying a slightly higher for their satisfaction. Thus the premium strategy 19 (Kotler, 490) of pricing would be used i.e.premium price would be charged for premium quality. On special occasions, some special prices or seasonal discounts 20(Kotler,509) would be established, for eg. during Christmas and New Year . This would act as a means of attracting the brand switcher segment also. Due to bulk purchases, the company would get volumes . Thus the strategy would be to offer products that compete on the basis of quality and diversity, instead of low price and advertising. It is known that a customer relies on price as an indicator of product quality21 (Schiffman,Kanuk,171). Perceptions of price also have strong influence on the purchase intention and satisfaction that the customer gains from the product So the company would maintain the high price strategy so as to maintain the positive perception of customer about its products. If the customer perceives that the quality offered is worth the premium price, they would readily pay it. Then they would not switch to any other brand because of price concerns. Distribution Beer belongs to the convenience goods category. So would be beneficial if it has an intensive distribution strategy22 (Kotler,534)i.e. the product would be placed in as many outlets as possible. So it would be placed in Supermarkets, office canteens, and gymnasiums. Retailers would be asked to dedicate space whether it’s a What’s New rack or an Innovation Rac. Automatic vending machines would be used in as many locations as possible, as the target market is the young, busy male who doesn’t have the time to search for a drink. If this strategy is not followed, then due to time shortage, brand switching might occur. Direct distribution23 (Kotler,529)channel with two levels i.e. retailer and whole seller would be used. The company sales force would be assigned territories so that they would work with the other channel members to push their product and monitor successful implementation of promotional plans. The Company will also provide Internet order placement service. The customer could check the product details on the net and make payments online. This would save the time of the customer. The company would also set its own pubs at a few locations where beer on tap would be available in a cosy atmosphere by a courteous staff Evaluation, Monitoring and Control In the next twelve months, the company hopes to increase its sales in Southern Australia to a point where they will actually be making money on this long term investment, and through sponsorship and other promotional tools, this is a very achievable goal, given the success of current brewers in the region. Within three years, it wants to be one of the top ten brewing companies trading there. This is very achievable given the amount of money and resources that they are willing to put into the market. Goals and budget would be spelled out for each month and quarter. Managers of lagging territories would be answerable for the poor performance and actions would be taken to improve plan fulfilment. A contingency plan would also be developed for emergencies like strike. This marketing plan will be controlled using many different mediums in order to ensure the effectiveness of such a system; including the consistent monthly monitoring of performance in comparison to forecast objectives such as budgets, sales statistics and cost analysis’. This will create a system that ensures management is in constant touch with the current situation, and it is adaptable to change if the need arises. Suggestions Company should enter into joint ventures with other players so that expertise could complement each other and entry to new markets becomes easy. To combat the rising threats, the retailers and store owners should be instructed to pay particular attention to display, layout and well-marked specials, as customers entering bottle shops are impulse buyers and can usually be influenced to purchase more than they intended. The Company should develop small breweries in pubs as the market for premium beers continues to grow It is advisable to join hands with some premium hotels to supply the premium beer in their outlets. Conclusion Thus the company’s market plan stresses upon consolidation and expansion. With the current plan and proper implementation and monitoring, it is possible to achieve what has been decided. Little Creatures would soon become one of the prominent players not only in Western Australia, but also in other parts of the world. The Chinese and Indian markets too have great potential and if the brand managers continue to work cooperatively with other departments, then the sky is the limit for this premium beer category player. Bibliography About Us ,www.littleworldbeverages.com Kotler Philip, Marketing Management(New York, Prentice Hall,1994,) Aussie males gripped by appearance and image http://au.acnielsen.com/news/20061005.shtml Low-carb beer and ready-mix bourbon top of the list for silly season drinkers, press release, Press Release,www.ibis.com Onkvisit, Shaw,International Marketing,(Prentice Hall, New Jersey,1997,456) Little Creatures Review,www.beeradvocate.com AUS: Little World Beverages celebrates FY figures boost, 23 August 2007, www.just-drinks.com editorial team,23rd Aug 2007 Aussie male gripped by appearance and image, www.au.acnielsen.com/news/20061005 Sciffman Kanuk,Consumer Behaviour,( Prentice Hall,New Jersey,1997,171 . Read More