Business Plan For Entering Chinese Beer Market Marketing Essay

Business Plan For Entering Chinese Beer Market Marketing EssayThe Chinese beer groceryplace has grown at a substantive rate between 2004 and 2008.It has generated total revenues of $ 42.8 billion in 2008, representing a compound annual ripening rate (CAGR) of 12% for the period spanning 2004-2008.Market consumption playscripts join on with a CAGR of 9.2% for the period 2004-2008, to reach a total of 38.8 billion liters in 2008.The markets strength is expected to rise to 53.6 billion liters by the end of 2013, representing a CAGR of 6.7% for the 2008-2013 period. model laager sales proved the most lucrative for the Chinese beer market in 2008, generating total revenues of $34.7 billion, equivalent to 81.2% of the markets overall honor. In comparison, sales of premium laager generated revenues of $7.7 billion in 2008, equating to 18% of the markets aggregate revenues.The performance of the market is forecast to decelerate, with an anticipated CAGR of9.4% for the five-year perio d 2008-2013, which is expected to lead the market to avalue of $67 billion by the end of 2013.1Market honorThe Chinese beer market grew by 14.9% in 2008 to reach a value of $42.8 billion.Market Value ForecastIn 2013, the Chinese beer market is forecast to have a value of $67 billion, anincrease of 56.7% since 2008.Market VolumeThe Chinese beer market grew by 12.5% in 2008 to reach a volume of 38.8 billionliters.Market Volume ForecastIn 2013, the Chinese beer market is forecast to have a volume of 53.6 billion liters, anincrease of 38.4% since 2008.Market Segmentation IStandard lager sales dominated the Chinese beer market, generating 81.2% of themarkets overall revenues.Market Segmentation IImainland China accounts for 42.9% of the Asia-Pacific beer markets value.Market Sh beAnheuser-Busch InBev accounts for 24% share of the Chinese beer markets volume.( www.euromonitor.com)DistributionSupermarkets and hypermarkets distribute 35.7% of the Chinese beer marketsvolume.1.2 Situation of Chinese beer industryThe Chinese beer market has grown at an astounding pace in recent years, spurred on by the massive levels of foreign investment in the market, along with the rise in the average levels of consumer spend in China, thanks to the economic reform policies of the government. China has now overtaken the US to become the largest national beer market in the world. However, per capita beer consumption in China clay very low relatively meaning that in that respect remains great scope for development.2In 2013, the Chinese beer market is forecast to have a volume of 53.6 billion liters, anincrease of 38.4% since 2008.The compound annual appendage rate of the market volume in the period 2008-2013 ispredicted to be 6.7%.3Table 1 Source Datamonitor2. The strategic triangle ( the 3Cs )2.1 The CorporationAire Valley Breweries is a medium-scale brewery that is located in UK, it is an effective company with high cost structure but it sells its premium bottled ingathering at premium costs so it is not a real problem.Its current production includesHostenbeck. European sort lager beer, 5% abv, in 260 ml ice rink bottlesSan Bernardo. European style lager beer, 5.5% abv, in 240 ml glass bottlesCamelot. British style dark bitter beer, 4.5% abv, in 500 ml glass bottlesArk Royal. British style dark bitter beer, 5.6% abv, in 500 ml glass bottlesPot of Gold. Irish style dark stout beer, 5.2% ABV, IN 500 ml glass bottles2.2 The CustomerAire Valley Breweries plc intends to provide the customer with more than just a traditional brew. We intend to distribuite a high role brew that will not only be refreshing and pleasurable, but also encourage gatherings and sharing of fun.Our customers can be feel safe about the highest quality standards of all our products. flavor at the consumer, there are some differences between the ways different alcoholic beverages are used in different occasions, but many product choice are a matter of personal taste this makes beer vul nerable to the threat of other alcoholic beverages and many plenty are about the opinion that wine can be more healthy.Overall, there is a moderate threat from other type of alchoolic beverages.Our bulls eye customer will be people of any ages and gender but our products are more suitable for over 20 years men and women.2.3 The CompetitorsWe should identify competition in terms of companies already operating in the Chinese market that product similar type of beers.Hence there will be a need to strongly key out ouselves from other already well-settled businesses. However after an accurate market analysis, our competition comes in several forms1. The biggest competitors are Anheuser-Busch InBev NV/SA, Tsingtao Brewery, Company Ltd., SABMiller Plc.Been present on the market for a long period, they have a wide and established distribution network that they utilize to their advantage.In order to compete with these leading companies we intend to strongly pi wholenesser new channel an d distribution development in addition to adopting aggressive marketing strategies.2. Other manufacturers of traditional brews including homes and local bars will also fashion our competitors. They often have access to the local and remote areas and knowledge of these areas. However their products are not of high standard, which we shall fully exploit.Anheuser-Busch InBev accounts for 24% share of the Chinese beer markets volume.In comparison, SABMiller accounts for 15.9% of the total markets volume.4Table 2 Source Datamonitor3. The market segmentation of the Chinese beer industryThe Chinese beer market is fragmented, with top three players holding 53.6% of the total market by volume.The market leaders are companies that own a strong well-known brand-image and operate within various segments of the market, which is possible due to the ease of increase in production capacity once a company is established and has already gained customers loyalty.There is a waste differentiation of p roducts in the market, as there are many varieties within the beer category, including ales, stouts, low/no alcohol, standard and premium lager, and specialty beer.Entry into this market would be highly dependent on the growth prospects and also on the size of the existing players.Furthermore, beer can be vulnerable to the threat from substitutes such as spirits and wine, due to low switching be and consumption patterns in different geographies.3.1 GeographicThere are difference between Northerners and Southerners.There are large numbers of beer consumers chose to drink at dinning and paste in the 6 selected metropolitan consumer markets namely Beijing, Shanghai, Shenyang, Chengdu, Wuhan and Guangzhou. A comparably distinct preference for drink-places was identified as frequenting at bar counters in Guangzhou (15.7%).5Table 3 Source IMI Consumer Behavioural Lifestyle Yearbook 2002-20033.2 DemographicIn China, women population consume more beer beverage than men, almost 40% of con sumers in Beijing are women.Table 4 Source IMI Consumer Behavioural Lifestyle Yearbook 2002-20033.3 PsychographicSupermarket chains are often able to negotiate very strongly on price with beer producers, which fact boosts buyer power significantly. Switching costs for buyers are not particularly high, which increases buyer power in all markets. Beer producers can differentiate their products kinda strongly, not only by the overall segment (lager or bitter, for example) but also by brand, ingredients, style, and so on.63.4 BehaviouralThe IMI survey classifies beer beverage consumers into dim and non- big(p) drinkers. unplumbed consumers drink habit ranges from daily drinking to a minimum of once or twice a week. Beijing beer beverage consumers are mostly heavy drinkers (67%). In Guangzhou, the heavy and non-heavy consumers are equally distributed in numbers.Table 5 Source IMI Consumer Behavioural Lifestyle Yearbook 2002-2003About 30% of the Beijing heavy drinkers are women, as c ompared to the other two metropolitan consumer markets in less than 20%. All the women consumer in the three selected metropolitan markets behave differently, ranging from frequency in drinking, preference for drinking-places, brand images, and personal lifestyles.7Table 6 Source IMI Consumer Behavioural Lifestyle Yearbook 2002-20034. The 4Ps Marketing Mix4.1 ProductAire Valley Brewwerie plc should produces products of high quality and impeccable taste.Our products will be positioned very carefully. They will be of extremely high quality to encounter customer satisfaction, supported by impeccable overhaul to our customers.As high quality beers can be sold at premium prices, it is now possible to enter themarket on a small-scale scale as a microbrewery. Investment in production equipment canbe recouped by adding a good margin to the price of the end-product.Standard lager sales dominated the Chinese beer market, generating 81.2% of themarkets overall revenues.Sales of premium lag er generated 18% of the markets aggregate revenues.(Datamonitor)8Table 7 Source Datamonitor4.2 PricingWe will ensure that our products prices take into consideration peoples budgets.However these prices will also take into consideration the cost of production and distribution4.3 DistributionThese products will be extensively distributed to remote, soon enough extremely viable areas where the market is appreciative of readily forthcoming, good quality brew.We intend to establish an brilliant network that will enable us to quickly respond to customers orders, and be available in remote areas our competitor has not yet exploited.4.4 PromotionThe marketing strategy we will adopt will obtain the sense of quality and satisfaction in every picture, every promotion, and every publication. The promotion will involve integrating advertising, events, personal selling, public relations and use up marketing.In the long term Internet marketing will also be undertaken, which will help to incre ase the knowledge of our products to the various market target segments.Web presence is a natural objective in reaching the appropriate potential customers.Well-done brochures, company profiles and business cards often has an draw play effect on clients contemplating on ordering our products. Hence this will undoubtedly generate increased sales of our products.5. SWOT AnalysisIn a promptly growing economy market as the Chinese one we should focus on our strenghts to respond quickly to what the market dictates and to provide quality brew in such a highly lucrative market. We should also acknowledge our weakness of a medium-sized company without any international experience.5.1 StrenghtsMarket segmentation strategiesFocused marketing campaignEstablished company in UK with strong capital baseDifferent type of products for different tastes5.2 WeaknessesLack of reputation in the Chinese marketNo knowledge about Chinese culture and behaviourChinese distribution channel different from UK oneIntroduction of Chinese empyees who have not previously worked in the company present a challenge to the company.5.3 OpportunitiesThe new generation are more interested in foreign brand and bewitching packagingInternet marketing and salesChinese beer market had a huge demand in the last years followed by population growth5.4 ThreatsExisting competition in Chinese beer marketMarketing strategies and tactics by other established European companies6. ConclusionThe brewing industry has been one of those quickest to modernise in China.Despite its huge market size, there remains great scope for development, and many new opportunities are still available in China.Per capita beer consumption in China has grown to near parity with other regional market, and so development in the market will in future rely much more on raising the average value of purchases, and persuading Chinese consumers to trade-up to premium products and brands.