Essays on Strategic Marketing Plan - Harnessing the Lost Alco Pop Market Share Case Study

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The paper "Strategic Marketing Plan - Harnessing the Lost Alco Pop Market Share " is a perfect example of a marketing case study.   As the Marketing Manager team for this alcoholic beverage company, we are tasked with creating an innovative plan to regain the lost market share of the total alcoholic beverages group which occurred on the introduction of the excise tax to the Ready to Drink category of drinks. We intend to accomplish this aim with the following plan. Business Definition and Scope The firm has a corporate strategy which consists of the following pillars. Creation of Value: this will be done through our innovative products that will create its own niche in the market within the 18-30 age group using the trends seen in the introduction as a guide. Configuration: being a major alcoholic beverage firm in Australia, we have a wide geographical reach together with a multi-market scope in straight spirits, cider, wine, RTDs and beer. Coordination: with every sector managed under its own team with the whole brought together under one overall general manager there is individual attention paid to every division whose target market segment is diversified. Our corporate strategy consists of three tiers: Business innovation; to create horizontal expansion into the 18-30-year-old segment. Vertical integration; in order to facilitate forward and backward expansion. Geographic Scope; expansion into more geographical locations and export. External and Remote Environment The main alcoholic beverages in any country are produced by a collection of local manufacturers who cater to the prevailing tastes and traditions of the domestic market.

Most of these beverages are not exported but the government keeps records of their usage for tax purposes. Figure 1: a snapshot of alcoholic beverage industry statistics. Market Structure The alcoholic beverages market in Australia is worth around $16.3 billion and comprised of the following major sub-categories/segments: beer, cider, wine, RTD’ s and straight spirits. Figure 2: Segment Mix Share (Volume) Segment Margins The highest percentage gross margin segment in the alcohol market is straight spirits, followed by cider, wine, RTD’ s and beer (in that order). Alcohol Consumption Patterns amongst Australians Frequency 1991 1993 1995 1998 2001 2004 2007 Daily 10.2 8.5 8.8 8.5 8.3 8.9 8.1 Weekly 41.0 39.9 35.2 40.1 39.5 41.2 41.3 Less 30.4 29.5 34.3 31.9 34.6 33.5 33.5 Ex-drinker 12.0 9.0 9.5 10.0 8.0 7.1 7.0 Never 6.5 13.0 12.2> 9.4 9.6 9.3 10.1 Table 1: Frequency of alcohol consumption, the proportion of the population As can be noted from the table, the trend seems to favour an overall reduction in drinking habits although not to a significant degree except for the weekly drinkers whose consumption has stayed fairly constant. Economic/Socio-Cultural/Politico-legal/Technological/and Natural Environment Forces Alcohol is a big part of Australian culture, especially of the young.

This consumption is influenced by social, individual and marketing factors (Donovan, 1997) such as being a member of social groupings at which alcohol is served, peer pressure to indulge at social gatherings and the perceived social advantages of drinking (Abbey, Scott and Smith 1993). Marketing factors that influence alcohol consumption include innovation in product design and packaging, discounts and promotion (Gentile et. al., 2001). 53% of the 20-34-year-old age group and 30% of the over thirty fives prefer spirits as their alcohol of choice.

Older adults tend to prefer wine and low alcohol beer (AIHW, 1999). There are differences in alcohol consumption in different regions. Rural and remote areas report consumption of alcohol inversely proportional to the size of the population (Strong et al 1998).

References

Abbey A, Scott RO, Smith MJ. (1993) Physical, subjective, and social availability: their relationship to alcohol consumption in rural and urban areas. Addiction ;88:489 – 99.

Alcohol Policy Coalition (2008), ‘Marketing and Advertising of Alcohol – Policy Statement’.

Australian Institute of Health and Welfare (AIHW) (1999) 1998 National Drug Strategy Household Survey, First Results, AIHW cat. No. PHE 15, Drug Statistics Series, AIHW, Canberra.

Biennial Conference of the Society for Research in Child Development, Minneapolis, Minnesota, 2001.

Clancy, Sean (2003), ‘Hangover Warning’, B&T Today (www.bandt.com.au).

Distilled Spirits Industry Council of Australia (2004), ‘Alcohol market and RTD facts’, Pre-budget Submission.

Donovan RJ. (1997) A model of alcohol consumption to assist in developing communication strategies for reducing excessive alcohol consumption by young people. Technical report prepared for the Health Department of Western Australia, Perth.

DSICA – Distilled Spirits Industry Council of Australia,(2003) Inc. Issues: The Alcohol Beverages Advertising Code, online at: http://www.dsica.com.au.

Foodweek online (2008), ‘Aussies drinking less beer – and getting choosier’, www.foodweek.com.au.

Gentile D, Walsh D, Bloomgren B, Atti J, Norman J. Frogs sell beer: the effects of beer advertisements on adolescent drinking knowledge, attitudes and behaviour. Paper presented:

Murphy & Odell (2005), ‘Consumer Led, Customer Driven’, Fosters Group Strategy Briefing.

NDARC Submission to the Senate Affairs Community Affairs Committee (2008), ‘Inquiry into Ready-to-Drink Alcohol Beverages’.

Preventative Health Taskforce (2008), ‘Technical Paper 3: Preventing Alcohol Related harm in Australia’.

Various company/manufacturer generated reports and presentations sourced online.

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