1.0 Introduction to the company
Carlsberg started back in 1945 where a young Danish boy named JC Jacobsen, travelled from Copenhagen to Munich to get hold of a special yeast for his beer. From then on he named his brewery Carlsberg which was named after his son. Carlsberg currently employ 1700 people in the UK, have 4 of the top 20 beers in the UK and have travelled over 12.5m.km in delivering for its customers (Carlsberguk.co.uk, 2016). The company’s main brand is Carlsberg Beer.
As presented from figure 1 is a perceptual map of the beer market in the UK.. As you can see the brands that are posing a threat to Carlsberg are Heineken, Corona, Guinness, Becks and Budweiser.
Carlsberg direct competitors include Carling, Fosters, Becks and Guinness as they all offer highly quality beer but all look to compete at a lower price within the market. Budweiser, Stella Artois and Heineken are also direct competitors offering also highly quality beer but within a slightly higher price bracket. All of Carlsberg direct competitors are all competing for the same potential market.
Carlsberg indirect competitors that produce alcoholic substitutes of beer include cider brands such as Strongbow and Thatcher’s, alcopops brands such as WKD and Sourz, spirit brands including Smirnoff and Captain Morgan’s, and Wine brands such Echo falls and Hardy’s.
Carlsberg market share in 2015 was 12% behind Budweiser with 13% and Molson Coors on 22% with the market leader in the UK Heineken on 24% (Beer, 2015). Carlsberg market share has fallen and its operating profit in 2016 for the six month period fell to £500m which is 4% down from the same period in 2015, (Perrett, 2016).
Current markets where Carlsberg is generating most of its sales and building strong market positions include a large part of Western Europe, Eastern Europe and Asia (Carlsberg Group, n.d.).
Critical Success factors and Prioritisation
Develop existing 0% product and market stronger.
Referring back to the Tows analysis one of the external factors that pose a threat to Carlsberg includes the rising health concerns that alcohol consumption is having on people (HuffPost, 2017). An internal factor that posed as a weakness to Carlsberg is the lack of innovation (MBA Skool-Study.Learn.Share., 2017), which potentially could be one of the factors that contributed to Carlsberg’s recent drop of market share, which had fallen 4% down in 2016 (Perrett, 2016). Therefore the threat of rising health concerns and the lack of innovation that Carlsberg faces both link together to generate the first Critical success factor which is to develop existing 0%product and to market stronger. Carlsberg already produce a low calorie, zero percent beer that has lacked in market sales, by increasing awareness and having a more extensive and targeted marketing campaign towards Carlsberg 0.0% target market would improve popularity of the product. Therefore implementing a market penetration pricing strategy for Carlsberg’s existing 0%product would prove beneficial as it sets a low initial price for the product. This essentially quickly attracts a new customer base and increases sales volume (Watkins, n.d.).
S1-T2: Develop brand loyalty in global markets.
Introduce divergent products to established customers
When analysing Carlberg strengths, one of the main advantage that they have is their brand loyalty (Bhasin, 2017). This is the result of their history and hard work that has been invested into the company. A 2014 BarTAB report found that the young adulthood two-thirds of beer drinkers found the brand name plays an important factor in choosing a drink (Upfront Analytics, 2015). This proves that Carlsberg can use this to there advantage. A threat that they also face is the aggressive competition that is posed by their close competitors including their indirect competitors who also causing problems for Carlsberg and many other beer giants as consumers are moving away from beer in favour of other alcoholic beverages and consumers are also starting to overlook mass produced beer for ‘craft’ drinks produced locally (Roderick, 2017). Therefore, the strength of Carlsberg brand loyalty and their threat of aggressive competition both link together to generate the second cirtical success factor which is to introduce divergent products to established customers. Carlsberg latest results show that volume sales have dropped 4% to 56.7m hectolitres during the first half of this year (Roderick, 2017). Therefore by using their loyal customer base to increase sales by introducing craft beer and providing a wider variety of craft beers would put Carlberg in a strong position against both direct and indirect competitors.
Current marketing mix:
Carlsberg product is known for it’s premium mild beer. Carlberg provides a premium product and qualitive product although it’s prices are very reasonable and competitive. Carlberg utilises different prices for it’s different products. Whist the brand has also invested into new markets and maintained a penetration pricing policy to attract a new customer base.
The beer market is expanding at a greater rate because of the higher volume of consumption amongst consumers. Carlsberg distributes to more than 150 countries worldwide (Carlsberg Group. (n.d.). Carlsberg has numerous outlets to provide products to its consumers including handling Duty free and travel retail business among highly respected airports, airlines, ferry lines and border trade (Carlsberg Group. (n.d). Calrsberg intermediaries include retailers varying from supermarkets, bars, pubs and restaurants all offering Carlberg products (Carlsberg Group. (n.d). This is an indirect method of distributing products to their buyers which Carlberg is currently using.
Carlsberg has an outstanding global presence and in order to remain as one of the top-most groups, it has undertaken excellent branding and advertising policies that have helped it to maintain its position. It has targeted the youth with their mild-section variants. For people who are sports lovers the brand has opted for sponsorship of teams including endorsement by Liverpool FC celebrating the 25th year anniversary of sponsorship of Liverpool F.C.
The company is continuously reinventing itself in terms of marketing policies. Social networking is the preferred medium nowadays and hence it has launched innovative ads and engaged social media to target techno-savvy customers. Some of its logos include a swastika and an elephant.
Carlsberg is an international brand and has adopted an aggressive promotional strategy to penetrate new markets. Free samples have been distributed as part of their penetration and promotional policy
Carlberg planning team reaching out to customer’s shelves and counters and to their suppliers’ suppliers. They ensure that they products always in stock in warehouses and that right quantities are also avaliable. On a global scale their planning team develops customer service as planning is built on strong relationships and skills. This is essential for Carlsberg as they operate in many countries and will have to make changes to their customer serivce in order to staisfy customers problems.
All of carlsberg potential employees are provided with a professional induction plan (Carlsberg UK, n.d.). Carlsberg uses on the job coaching, mentoring and job shadowing as they prefer to use a hands on method drifting away from delivering formal training (Careersatcarlsberg.co.uk, n.d.). They believe that ‘the biggest success comes through boldness and daring’ (Carlsberg UK, n.d.). These are all ways in which Carlsberg adds value to customers experience.
The systems and processes of the organization are influential over the execution of the service. It is important that you have a well tailored process in place in to minimise costs (The Marketing Mix, n.d.). Carlsberg breweries worldwide are all governed and constantly monitored by on site quality control sections to ensure that the beer produced is always of the highest standards and the quality and taste is consistent (Photos Photiades Group, n.d.).
Physical evidence is also related to how a business and it’s products are perceived in the marketplace. Carlsebrg is one of the market leaders and market leaders tend to have a presences and and establishment about their business in the marketplace as for example when you think of Beer, you think of Carlsberg and you know exactly their presence in the marketplace and have established a phyical evidence. The digital world is an example of physical evidence which Carlberg uses as they promote a fast and effiecnt response to customer enquires, this is consistent as they have a fast responsive company website. In addtion Carlberg provides phycial evidence through other digital methods such as blogs, social media platforms including twitter and facebook.
Recommendations for CSF1 Develop existing 0% product and market stronger.
As all products will follow a life cycle it is important that Carlsberg can predict how far their product has gone on the life-cycle to increase it’s competitive edge. Therefore I recommend Carlsberg to consider releasing different flavoured non alcoholic beers over a certain period of time by doing this can be used as an attempt to remain relevant in the competitive market.
Carlsberg zero percent beer has lacked in market sales. Therefore I recommend that Carlberg implement a market penetration pricing strategy for Carlsberg’s existing 0%product. This would prove beneficial as it sets a low initial price for the product. This essentially quickly attracts a new customer base and increases sales volume.
I reccomend that Carlsberg look to introduce a direct method of distribution so consumers have an option to buy directley from Carlsberg. This can involve introdcuing a eccomerce website providing an alternative option for consumers to purchase the product and can benefit both parties. It benifts the consumers as it is much more time efficient than going to a wholesaler or retailer and benifts Carlsberg as it increases the ways in which consumers can buy and in result help influence sales.
Having a more extensive and targeted marketing campaign towards Carlsberg 0.0% target market would improve popularity of the product. Carlsberg already Sponsor Liverpool FC but I also recommend that Carlsberg partner up with FIFA as the World cup is coming up soon and reaches a 3.2 billion in home television audience (FIFA.com, 2015). This would in return hopefully improve popularity of the product through TV advertisement and sponsorship.