. Executive summary
If you ask the British the favorite drink in the bar, then the answer must be beer, beer, or beer …, The pub culture is unique is Britain, casually a small bar will provide no less than 10 kinds of beer. The consumption of beer is closely related to the concept of life. The pursuit of high quality of life, making some of the higher income lifestyle has a new feature, like killing time in bars, and talk to strangers to release the pressure of life. Therefore, the cultural concept of beer has become increasingly prominent. It starts to become a full display of people’s personality, wealth and taste of a way.
With the fashion consumption concept of beer, beer customer loyalty is also getting lower and lower, people abandon the traditional beer consumption concept of “single-mindedness”.
Newcastle brown ale beer is a kind of traditional and classic English ale yeast nose, Crisp, clean finish, sweet fruity and caramel notes come first, medium roastiness malt that isn’t too noticeable, with very mild hop profile.brewed by John Smiths (Heineken UK).(Gourvish,1994). While with more and more beer brands in British, the sales of Newcastle brown ale has been declining in recent years, this paper surveyed several people to study the appropriate marketing plan for Newcastle brown ale and try to solve the problem with place strategy.
2. A macro market survey
2.1 Market Capacity and Potential
TABLE 1-1 UK Brewery Market Imports, Exports and Production
UK million liters 2004 2005 2006 2007
Yield 61,783,000 59,585,513 57,617,000 56,746,000
Consumption 65,184,000 63,071,385 60,880,032 59,177,000
Exports 1,624,000 1,842,766 2,100,000 2,100,000
Imports 5,066,000 5,328,639 5,500,000 4,600,000
UK is one of the world’s leading markets for beer. In 2000, the British drank 6.7 billion liters of beer worth a total of GBP 16.08 billion, with rise of 2% since 1995.
2.3 The characteristics of industry marketing and competition
Britain’s modern beer industry is still very developed, the country’s existing 65 beer companies, of which only nine are considered to have belong to the category of national management of beer business(Gourvish,1994). The rest of the brewers are regional brewers. There are 93 breweries, the total beer production has been ranked second in Europe for many years and ranked the sixth in the world. It is estimated that in the UK there are about more than 1000 beer brands. In 1994, the six largest breweries in the UK were Buss, Union, Metropolitan, White Brad, Scottish & Newcastle and Brave Brewers, the six breweries Jointly control 75% market share of the British beer. In UK, imported beer accounts for about 6% of all beer consumption: Ireland’s Jenith beer accounts for 3%, Germany’s Hoxton accounts for 1.5% and the other accounts for 1.5%.
Table 1-2 Comparison of sales percentage ratios for various types of beer in the UK
2004 2005 2006 2007
draught beer 76.5 73.3 69.5 68.5
Family drinking packing beer 21.5 26.7 30.5 31.5
Ale, stout, 64.1 51.4 48.7 48.0
Lager type 35.9 48.6 51.3 52.0
Among them, the proportion of Lager beer increase year by year, the sales momentum is strong. In addition, because the growth rate market supply capacity is far greater than the growth rate of market demand, the contradiction of supply and demand will further intensify. Consumers will become the most scarce resources, competitors will compete for customer resources, not only to strengthen the development of limited new market space, but pay more attention to the competition for market resources(Gourvish,1994). The strong combination between the various brands become the main mode of scale expansion, cultural management has become a powerful weapon of differentiation competition(Slade,2004).
2.4. Competitive investigation
Distribution and Ranking of Market Brands
British beer type: Lager, bitter beer Bitter, dark beer mainly Guinness, light beer has a taste of sweet soda, the tongue would feel bitter taste after drinking bitter beer; stout is the famous product of Irish(Slade,2004).
Table 1-3 Output of major beer brands (10,000 tons)
2005 2006 2007
Beck”s 15.98 18.26 19.23
Bitburger 39.85 41.43 12.09
Diebel(Alt) 14.47 15.22 13.99
Feldschlosschen 16.64 16.97 18.23
Hasseroder 26.65 22.20 20.90
Holsten 14.43 14.00 13.18
Jever l3.35 15.46 17.95
Konig Pilsner 21.50 21.79
Krombacher 45.70 45.91 45.38
Oettinger 22.50 27.00 26.33
Paulaner 19.20 19.90 19.80
Radeburger 17.10 17.70 17.40
Veltins 22.83 22.42 22.79
Warsteiner 54.66 51.63 50.85
3. Micro-environmental factors
Although the British beer market has multiple players in the field, but in fact the brewing industry is in a “comprehensive monopoly” mechanism(Gourvish,1994). Brewers have extended their business operations to include not only the brewing activities but also the wholesale and retail aspects of beer sales. Through a corporate structure known as the “one-stop industry”, these brewers own and operate more than 50 percent of the registered beer sales units nationwide and less than 10 percent of unregistered beer sales units. This close-knit one-stop business model penetrates into everywhere from public hotel operators to every corner and becomes a sales way British beer consumers love. In 1993, more than 81 per cent of the beer consumed by Britons was sold from registered sales outlets.
British beer market has always relied on public places for sale and consumption, this part of the total consumption accounted for 84.8% of the total. But during the last 20 years, the family drinking beer increased a lot, until nearly 5-10 years, the sales of beers in the bar and restaurant have improved significantly.
According to the Datamonitor survey, the British people seem to prefer lagers and pre-mixed spirits over the past five years, while the traditional UK malt beer and stout profits are also recovering . In the UK, about 78% of people under the age of 20 drink alcohol, the drinking group is the largest among 45-54 age which reach to 93% of the total, the drinking group decreased to 85% among the age group of 65; The proportion of beer consumers reaches to 64% which is the highest in Europe, beer consumption of beer tends towards the direction of boutique wine. While most of the mixed beer so far has been beer + lemon, or beer + cola, some new flavors are entering into the market, such as a mixture of beer and other alcoholic beverages.
The most common type of British: Lager type beer, ale, stout beer and light beer, etc., the British favorite is ale. Draft beer is one of the most popular tradition beer in UK, in addition to draft beer, people prefer bottled Lager brewery in the club ,
Ale is fermented in higher the temperature (15-23 degrees Celsius) after the malt is crushed and added with yeast, the yeast has been floating in the mixture on top(Gourvish,1994). Before 1840, there is only one brewing technology, although the production process is short, but because of ale is not easy to keep, the quality is difficult to control, and the cost of the ale is higher (to keep constant temperature), after 1842, Ale gradually withdraw the stage of industrial production. However, such a traditional country of the United Kingdom, of course, will not so easy to compromise and settle for new technologies, insisted on using malt to produce beer. So Ale as a symbol of the tradition, can be found in various size of the pubs in the UK , some of the are more well-known brands, and some are local beer workshop masterpiece. Taste Ale, for the British, is kind of nostalgia behaviors which can reflect identity.
Ale is rich in taste and the yeast forms a thick layer of foam on top of the wort. Because there are many esters in the fermentation process, Ale is usually fruity despite the absence of fruit. In Britain and Ireland, Ale usually have deep color with larger amount of hops , it will be more bitter. Newcastle Brown Brew (Newcastle Brown Ale) and Samuel Smith (Samuel Smith) can be said that the UK’s most famous Ale beer
Five respondents are invited to the investigation. The results are as follows:
The data shows that the image of the beer will effect the the purchase decision;
People perceives that the beer should have a healthy image with a low calories;
The price of beer will not largely affect the purchase choice as long as it is reasonable ;
If the beer can be more easier to get, the consumer would like to try and more likely to create loyalty to the brand.
5.Marketing mix summary
With the increasing competition in the beer market, in order to obtain long lasting competitive advantage in the competition, continuous implementation of marketing ideas and model innovation are needed by beer enterprise, and the marketing level and ability are rapidly upgraded, the terminal marketing, concept marketing , Service marketing, brand marketing, depth of distribution, depth of marketing and other new ideas and models are widely used in beer marketing.
Depth marketing is based on the use of 4PS strategy (product, price, place, promotion), efficient use of 4CS strategy (customer, cost, convenience, communication) and 4RS strategy (Relevant, reaction, relationship, reward), through efficient logistics , Comprehensive and thoughtful service, strict market management, to achieve the depth of communication with customers, establish a broad, solid close relationship, to achieve maximum brand loyalty and market control and maximization of competitiveness(Van,1992).
1. Product positioning
Classic English ale for classic man
1 Pricing direction
According to Newcastle beer traditional tastes, average taste and high-quality features, the price set in the low-end.
2 Pricing objectives:
By increasing the sales of Newcastle beer, increase its beer market in the UK market share.
3 Determining demands:
3.1 Market demand
Britain has a huge beer consumption market, the proportion of its beer consumers is up to 64% which is the highest in Europe, and beer consumption trends towards the development of boutique wine.
3.2 Price Sensitivity
Each price will lead to a different level of demand, under normal circumstances, demand and price is in a inverse relationship. While British has a low sensitivity to beer price.
One bottle of Newcastle Brown Ale costs approximately $3. A six pack of Newcastle Brown Ale costs approximately $9.
The company will focus on the core market, and on the development of secondary market. With the growth of the market, the depth and extensiveness of market is increasing, put emphasis on the development of the market and supporting the development of the subservience market, while strengthening the terminal network construction, direct control terminal. The terminal should be further divided, not only to strengthen the development of the hotel terminal, the community terminal, bar, hall, and even tea clubs, concert halls and other places of consumption should be strengthened and developed.
“Buy one get one”: for the holiday market, any Newcastle beer buyer can be gifted with a small bottle of a new flavor of Newcastle beer during a limited period of time which can be launched at all sales outlets.
“old for new service”: holders of the original Newcastle beer packaging can exchange for another bottle for a cheaper price
“Quiz prizes”: it can be carried out in pubs, related beer knowledge can be given to the customers in the form of quiz, customers can receive the appropriate prize
“Promotion”: in the holiday, discounts can be adopted, like buy one get one with the “roadshow”: to carry out a variety of outdoor promotional activities, such as Newcastle beer theme of the game and quiz activities to attract the attention of tourists, enhance the brand image.
Detailed strategy for one element of the marketing mix
The channel operation design of Newcastle beer should be based on channel value, establish stable strategic cooperative partnership, establish value chain benefit return, design channel as one member of value chain, make manufacturer and circulation channel share the same market aims.
Development of local important areas: the gradual formation of London as important area and rational distribution of the national sales network
- Direct selling in London Basic structure: the company headquarters – London Branch – Dealer – Terminal
2. Distribution selling in the rest of the UK;
The basic structure: the company headquarters – regional agents – dealers – terminals
Improve the control ability, we must actively cultivate a group of 2nd tier Ws with certain strength, eager to grow, good reputation and passion as the core customers, make full use of their regional, relationship and distribution advantages, improve distribution capabilities; To strengthen terminal operators, to give greater support to a certain size terminal operator with good business, good reputation in promotion, incentives and other aspect. Make 2nd tier Ws responsible for the the terminal to improve the timeliness of delivery, while fully mobilize the enthusiasm of the 2nd tier Ws.
Directly control part of the quality type terminal (large-scale, good efficiency, large sales) and highly competitive non-exclusive sales offices ;
to actively develop large chain-type terminals (large supermarkets, brand hotel chain)
Gourvish, T. R., & Wilson, R. G. (1994). The British brewing industry 1830-1980. Cambridge University Press.
Slade, M. E. (2004). Market power and joint dominance in UK brewing. The Journal of Industrial Economics, 52(1), 133-163.
Van Waterschoot, W., & Van den Bulte, C. (1992). The 4P classification of the marketing mix revisited. The Journal of Marketing, 83-93.