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Section 1: Identification of Market Specific Issues, Constraints, and Opportunities
The first aspect that must be addressed by the marketer is CSR (Corporate Social Responsibility). Whilst CSR is an integral part of the developmental strategy in Europe (Yildiz & Ozerim, 2014), CSR as a concept is not well-defined in Vietnam (Tran & Jeppesen, 2016). Tran and Jeppesen (2016) highlighted that in Vietnam, the working conditions are gradually improving, however, when considered from a European perspective, a product manufactured in Vietnam and sold in Europe may bring in negative publicity. The fundamental difference is that in Vietnam, the focus is on short-term results, and long-term aspects like sustainability are not given much importance. The working conditions must be improved along two lines- First, by giving more freedom to workers (currently they cannot even have a union) and second, by reducing the emission from any manufacturing activity.
The second aspect that must be addressed by the marketer is to understand the differences between the markets. The marketer understands that three markets need to be considered- Australia, Vietnam, and Europe. The analysis is conducted based on PESTLE framework by Rastogi and Trivedi (2016) and is presented in appendix 1. Based on the analysis, it can be inferred that whilst the business environments in Australia and Europe are similar, they are considerably different from that in Vietnam.
The third aspect that must be addressed by the marketer is to understand the cultural difference for which Hofstede Cultural Dimension framework (Hofstede, 2020) is applied in Australia, Vietnam, England, and Italy and is presented in appendix 2. Based on the analysis it can be considered that there are cultural similarities between England, Italy, and Australia (to a certain extent), however, the dimensions diverge when Vietnam is considered as well.
The fourth aspect that must be addressed by the marketer is the constraints the company would have to face in the European market. According to the Brewers of Europe (2020), there are over 9500 breweries in Europe. To sell its products in the European market, the company would have to become a member of a national association that is a member of the Brewers of Europe. The Brewers of Europe has issued guidelines for its members related to the brewing process and contribution towards society, economy, and environment. The members are expected to follow the guidelines and the guidelines are presented in appendix 3.
The fifth aspect that must be addressed by the marketer is the opportunity for the company in the market. According to a report by Allied Market Research (2019), the beer market in Europe was valued at $138,649 million and is expected to grow at a CAGR of 1.8% to have a value of $159,687 million in 2025. Amongst the countries, Germany accounts for one-sixth of total beer consumption and is expected to retain its dominance. Between England and Italy, England is expected to witness significant growth over the observation period due to the wide acceptance of beer as a refreshment beverage. Another key insight is that whilst there are local breweries, however, collaboration is on the rise between local and international partners (Allied Market Research, 2019).
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Section 2: Identification of Social, Cultural, and Consumer Behavior in Target Market
Based on the discussion in the earlier section, it can be inferred that between Italy and England, England is a more attractive market for the company. However, there is a need to increase the familiarity with the target market by focusing on different aspects of consumer behavior as done below.
The first aspect that is being analyzed is the social implication of alcoholic consumption in the UK. According to Seaman and Ikegwuonu (2010), four key social aspects must be focused on:
- First, young people consider achieving drunkenness as a default choice for socializing.
- Second, young people consider heavy drinking as a temporary behavior which they will not be continuing in the long run.
- Third, the cost of alcohol has a significant influence on the amount of alcohol consumption.
- Fourth, if alcohol is easily available it might lead to excessive consumption and impact the well-being of an individual.
The second aspect that is being analyzed is the cultural implication of alcoholic consumption in the UK. According to GB Mag (2019), alcoholic consumption plays an important role in the UK culture as it provides a medium for people to socialize with others. The obvious implication of socializing is people hanging out with friends to celebrate events or catch up on sports, news, and politics. However, socialising is not confined to personal lives as UK citizens also discuss business over drinks. Another important cultural aspect is that the families are open to drinking in front of young adults as evident from a drinking age in the country being 18 and many pubs being family-friendly.
The third aspect that is being analysed is the consumer implication of alcoholic consumption in the UK. According to Seaman and Ikegwuonu (2010), there has always been excessive drinking culture in the UK, however, in recent times the focus on drinking habits has increased as consumers are now more concerned about their health and are more aware of the implications of alcoholic consumption. Seaman and Ikegwuonu (2010) added that despite increased awareness, the ease of alcohol has increased primarily due to the affordability and availability of alcohol in the UK. Another important factor that has promoted the alcoholic consumption in the country is marketing activities by companies: Seaman and Ikegwuonu (2010) argued that marketing activities including sponsorships, promotion, advertising, and product placement have created and maintained the position of alcohol to be an integral part of the culture. The marketing activities have helped in establishing and renewing the alcohol consumption for each generation, and also promoting brands. Seaman and Ikegwuonu (2010) also argued that whilst today’s youth is more concerned about their health and overall well-being, the marketing activities are focussed on presenting the positive associations of alcoholic consumptions with most of the marketing activities being focussed on presenting alcohol consumption as exciting and glamorous.
Section 3: Recommendations
Based on the above analysis there are several recommendations addressed to the CEO of the company that are presented using the 7Ps (Marketing Mix) framework as suggested by CIM (2015).
- Product: The product is an organic corn-based beer that is infused with Bundaberg Rum and is tapped in a sparkling-wine type of bottle. The total alcohol level in the beer is 10%. Whilst it can be argued that the taste of a consumer in the UK may be different from that in Australia, however, there is a need to continue with the existing formula. The above recommendation is justified because there are over 9500 breweries in Europe and so it is necessary that a new product can be differentiated easily.
- Price: As seen from the above discussion, the biggest consumer of alcohol in the UK is youth and this group is price sensitive. So, the beer must be priced to keep it affordable by the youth. An alternative strategy was to price it as a premium brand, however considering that it is a small Australian company, it might be too early to price it as a premium brand.
- Place: Since the product is being exported to the UK from the manufacturing unit in Vietnam, it means that company might not be able to be as active as local UK companies in distributorship, so it is recommended that company identifies certain large retail chains and pubs where the beer can be offered to the customers. The rationale behind collaborating with large retail chains and pubs is that a central contract can be executed with these retail chains and pubs. This would save efforts in approaching every store and pub.
- Promotion: Australia and the UK share a cordial relationship due to them being a part of the Commonwealth. So, it is suggested that the promotion should be focussed on the theme ‘Australia’s Gift to the UK’. Another recommendation is to relate it to the ‘Ashes’ for example, despite the on-field rivalry between the two teams and fans, the beer can bring everyone together.
- People: Whilst it is necessary to be consumer focussed and understand the concerns of customers regarding the taste and affordability of the product, it is equally important to look after the employees and workers. The company must highlight that it is following the local employment laws in Vietnam and is also keeping ethical considerations that are practised in Australia and the UK.
- Process: The alcohol production results in significant usage of water and is also responsible for environmental damage in the form of emission, wastage of packing materials, and transportation. The company must highlight the best environmental practices that should be followed at the manufacturing unit in Vietnam. Also, it is recommended that the company develops a fund to positively contribute to the environment in Vietnam.
- Physical Evidence: Whilst the packaging (wine-type bottle) is an attractive concept, the company may also look at increasing the customer engagement by asking the customers to provide feedback on the product n return for an online discount on their next drink. This feedback can be used for improving the effectiveness of the marketing strategy.
References
Allied Market Research. (2019). Europe Beer Market. Allied Beer Market. [Online]. Available at: https://www.alliedmarketresearch.com/europe-beer-market. [31st March 2020].
CIM. (2015). 7Ps: A Brief Summary of Marketing and How it Works. The Chartered Institute of Marketing. [Online]. Available at: https://www.cim.co.uk/media/4772/7ps.pdf. [31st March 2020].
GB Mag. (2019). Why is Alcohol a Big Part of British Culture? GB Mag. [Online]. Available at: https://greatbritishmag.co.uk/ask-a-brit/why-is-alcohol-a-big-part-of-british-culture/. [31st March 2020].
Hofstede, G. (2020). Compare Countries. Hofstede Insights. [Online]. Available at: https://www.hofstede-insights.com/product/compare-countries/. [31st March 2020].
Rastogi, N & Trivedi, M.K. (2016). PESTLE Technique- A Tool to Identify External Risks in Construction Projects. International Research Journal of Engineering and Technology. 3(1): 384-388.
Seaman, P. & Ikegwuonu, T. (2010). Drinking to Belong: Understanding Young Adult’s Alcohol Use within Social Networks. Joseph Rowntree Foundation. [Online]. Available at: https://www.jrf.org.uk/sites/default/files/jrf/migrated/files/alcohol-young-adults-full.pdf. [31st March 2020].
The Brewers of Europe. (2020). In Brief. The Brewers of Europe. [Online]. Available at: https://brewersofeurope.org/site/about-us/index.php?doc_id=423. [31st March 2020].
Tran, A. N., & Jeppesen, S. (2016). SMEs in their own right: The Views of Managers and Workers in Vietnamese Textiles, Garment, and Footwear Companies. Journal of Business Ethics. 137(3): 589–608.
Yıldız, A. & Ozerim, G. (2014). Corporate Social Responsibility in the European Context. in Turker, D., Toker, H. & Altuntaş, C. (Ed.). Contemporary Issues in Corporate Social Responsibility. USA: Lexington Books. pp.43-55
