Beer Wars Case Study Essay

Introduction The market dynamics of the Australian beer market is given in the case study. The beer market in Australia is extensive due to high consumption by Australians. In the early 1800’s, there existed numerous independent breweries. Due to excise laws and better transport systems large breweries started acquiring smaller ones, and through widespread inorganic growth, by 1985 the industry became dominated by two corporate conglomerates, Elders IXL(CUB) and Bond Corporation. Both used aggressive marketing strategies for increasing market share. Top highlighted reasons for beer consumption were mixing with others, relaxing, allowing social drinking and enhancing appetite and the concept of beer being equal to ‘liquid food’. Women in general did not like the beer taste and contributed to only about 12% of the total sales volume, whereas 37% of the 54% adult drinking population admitted to be regular drinkers. Only 10% were ‘ocker boozers’ who contributed to 60% of the volume. Hotels/pubs and retail outlet routes formed the bulk of the sales. Standard beer was the most consumed at 70% followed by light beer at 24%. Males across all age groups equally represented beer consumption with little higher consumption in the 31-40 age group. The marketers strongly believed in the ‘beer image’ having a strong influence on beer brand preference. So the marketers started projecting the alcohol content by way of which they used to segment variants in different ways each brand being targeted at a specific segment. Several different brand imageries have been created. Lastly the several brands and variants that had been created with the hope of creating market share seemed to have fallen flat. A failed attempt in the same direction in the form of Swan Gold trying to entice consumption by women also failed. Problem: Due to increased competition, there was a flux of introducing new products continuously, which put in peril the older products of cannibalisation. The major objectives that the beer companies had were †¢Increase market share by acquiring customers †¢Maintenance of existing customers by ensuring no cannibalisation †¢product positioning and launch strategies for the newer brands and phasing out older brands Solution: Increase the beer market, instead of just market share The consumption of beer has been steadily increasing over the years (from around 5% in 1900 to 12% in 2000). But also around the same time, the consumption of Coffee and other milk based drinks had been exponentially increasing (from around negligible % in 1900 to around 20% in 2000). Therefore instead of eating into each others’ market share, the industry should try to increase consumption of Beer among the non-Beer drinkers and hence increase the whole pie. Encourage successful brands and terminate lagging brands Instead of keeping a huge number of brands which is leading to cannibalisation, the brands which are doing well must be encouraged and marketed well, on the other hand those that are not bringing in much profits should be discontinued. This would simplify marketing and would make it focused. Phase in brands tailored for women The exhibits show that women prefer non beer alcohol, in part due to the image of beer as a male bonding drink. Thus certain brands of beer that can be positioned as less bitter, and more female oriented can be launched. The marketing and advertising of these brands should be done in such a way that the women are targeted. Increase light beer Brands offering light beers and beers with less alcohol would serve two purposes. They would attract customers who do not drink, and also are better served in restaurants according to the exhibits given. Launching beer brands over considerable spans of time 2 versions of Power’s were launched in the same month (February 1991) while Forex Gold and Forex Light Bitter from Lion Nathan were launched with only a month separating them. Because of this no single brand is properly marketed and does not get the time to build itself in the minds of consumers. This also leads to cannibalisation.