Carlsberg Context Analysis Report
Beth Green (12087726)
Contents 1.0 2.0
Introduction Customer Context 2.1 Segment characteristics 2.2 Awareness 2.3 Perception and Attitudes 2.4 Perceived Risk 2.5 Involvement Levels
3.0
Business Context 3.1 Corporate and Marketing Strategy and Plans 3.2 Brand/Organisation Analysis 3.3 Competitor Analysis
4.0
Internal Context 4.1 Financial Constraints 4.2 Organisational Identity, Culture values and beliefs 4.3 Marketing Expertise & Agency Availability and suitability
5.0
External Context 5.1 Stakeholder Map 5.2 Communication Needs 5.3 Macro-environmental – PESTLE Analysis
6.0
Conclusion 6.1 Key Issues 6.2 Marketing Communication Objectives
Context Analysis 1.0 Introduction The purpose of this report is to produce a context analysis of Carlsberg, a 3.8% ABV pilsner-style lager that has been established since 1904. The UK larger market is currently worth £16.7 billion and Carlsberg’s market share accounts for 13% of this (Wisson, 2013). Carlsberg is the flagship and most distributed brand of the parent brand ‘Carlsberg Group’s’ portfolio and is available in 140 countries (Stefansson, 2011). 2.0 Customer Context 2.1 Segment Characteristics Socio economic group Abs and C2s are most likely to drink lager, with the highest usage between the ages 25-34. Despite being a largely unisex product, lager is predominantly drunk by 86% of men. In attempt to attract younger and female drinkers beer has reacted to the trend towards sweeter drinks. ‘ With niche segments like spirit beers and low- alcohol citrus ‘radler’ style beers’ (Wisson, 2013). The number of adults drinking out of the home in the last 12 months account for 83% in comparison to 88% of those drink in the home in the past year. Affluent groups such as AB’s are most likely to regularly drink out of the home as they are able to afford the higher on-trade prices (Wisson, 2013) 2.2 Awareness Carlsberg has experienced successful marketing campaigns that has helped support its brand awareness amongst consumers. In August 2013, Carlsberg UK signed a 5year contract with live nation. In attempt to raise awareness amongst the 25-34 year old consumer it will cover various music festivals such as Download, Wireless, Creamfields, Global Gathering, Reading, Leeds and Latitude. (Oliver, 2013)
2.3 Perception and Attitudes Lager is seen to be the most emotive type of beer; it has strong associations with positive attributes like refreshment and sociability although is commonly referred to as quite ‘gassy’. Carlsberg in particular is regarded as a high quality lager and is the third largest lager in the off-trade market with sales of £416 million in 2012/2013 (Wisson, 2013). In 2012, Carlsberg opposed government’s proposals to introduce minimum pricing for alcohol to help tackle Britain’s binge drinking culture; a 45p minimum price per unit was set with the support of the Prime Minister (Cave, 2012). This decision by Carlsberg was seen as beneficial to consumers as the prices were to be kept low although reflected negatively on the brand itself as it was seen to encourage binge drinking. 2.4 Perceived Risk Financial commitment is a low perceived risk for the consumers of Carlsberg, as its lager is priced competitively low against its rivals. In the case of health, the risks are believed to be relatively high. With binge drinking on the rise in the UK, health warnings have been issued via the NHS and other channels in aid to deter consumers and reduce consumption (NHS, 2013). In terms of social implications, regardless of being a unisex brand many of Carlsberg’s marketing are still targeted at the predominantly male market.
2.5 Involvement Levels & DMU Characteristics ‘Low level involvement is experienced by individuals when purchasing a product or service that has low levels of uncertainty attached to it’ (Fill, 2011). Beer is considered a low priced item with little involvement levels, although it can induce a strong sense of ego risk associated with the self-gratification attached to the consumption of it (Fill, 2011). Price and packaging play a large role in stimulating decision-making. Fill suggests that communications should be kept short and contain less information as the learning/awareness of a low involvement product develops through exposure to repeated messages. 3.0 Business Context 3.1 Corporate and Marketing Strategy and Plans Carlsberg Group’s corporate strategy is demonstrated in a wheel. The five sectors all interconnect to help set the direction for the brand: - A strong portfolio of brands to satisfy consumer preferences across our market -An emphasis on being a customer focused business -To retain and recruit highly skilled employees -An unrelenting focus on efficiency and effectiveness -A commitment to being a socially responsible organisation (Carlsbery Group, 2013) Carlsberg’s is one of the world’s biggest football sponsors that benefits from reaching billions of fans and TV viewers worldwide. This pull communication strategy helps to support business growth, by actively promoting and advertising at the football events helps to expose the brand. Sponsoring football is an effective way for Carlsberg to communicate with the consumer, giving the opportunity to engage and develop their relationships; which supports brand awareness and credibility. (Carlsberg Group, 2013) 3.2 Brand/Organisation Analysis In 1904 Carlsberg became the first Danish brewery to receive an appointment to supply beer to the royal Danish court, the crown on the logo is a testament to this prestigious honour. The hop leaf also symbolises the natural ingredients used in the Carlsberg lager, both of which are still used to this date as the heart of Carlsberg’s identity and authenticity (Carlsberg, 2014). Although Carlsberg struggles to differentiate themselves against rival brands such as Heineken and Grolsch; as they all use a similar shade of green for their bottling (Wisson, 2014). Therefore marketing communications could help reposition Carlsberg’s image in order to distinguish itself from its competitors.
3.3 Competitor Analysis Indirect competition within the alcoholic drinks categories includes alternative products such as; wine, white spirits and dark spirits. Healthy lifestyles can steer consumers to non-alcoholic drinks also. Carlsberg’s closest competitor indirectly is cider. Cider ‘has grown by over a third in just five years, driven by growth in the flavoured cider category and the launch of successful new product development such as stella cidre’ (Wisson, 2013). Cider is still a respectively small category in comparison to the beer market despite increasing numbers but may pose as a future threat. Whereas Carlsberg faces direct competition from all beer brands, Carlsberg’s biggest competitors are; - Stella Artois - Guinness - Carling - Becks - Heineken - Budweiser - Fosters
Stella
Becks
Competitors marketing communication activities; -Limited edition Christmas bottle, holly green glass and corked to give a more sophisticated and festive feel- to tap into the profitable occasion of festive drinking. - on pack promotion summer 2013, chance for customer to win a chalice engraved with their name to focus on ‘ delivering a superior experience’ - Sept 2013, ‘The gift of perfection’ ran through Facebook, an app that allows users to share a drink voucher which can be claimed by their friend at participating stores -Dec 2012, launched 11% lighter bottles, estimated to save 2,500 tonnes of glass and almost 2,000 tonnes of carbon dioxide in 2013 - Teamed with musician kid Cudi in 2013, the artist designed a label for the companies 2013 bottles, underlining the beers association with music
Budweiser
Guinness
Heineken
Limited edition Christmas jumper background run up to Christmas 2013 to tap into many consumers increase to drinking over the festive period -‘Celebrate Responsibly’ which followed up with a bespoke Christmas pack at Asda which the brand made donations to road safety organisation, Roadsafe - Feb 2013 chance to win FA cup final ticket a phone app was launched, where customers scan trade pack information for a chance to win - British sponsors of the FA cup 2011-14, continually donates money to grassroots football in the UK - a world leading stout that is sold in 150 markets globally - Free pints of Guinness with ‘near-field communication’ mobile devices in a promotion running from July-August 2013, tap devices against pub drink dispensers to be entered into a prize draw - One of the worlds most valuable beers available in over 150 markets worldwide - ‘Ignite’ concept at Milan’s fashion week 2013, bottles lit up and interacted as customers drank, they pulsated with light in time to music supporting the brands innovation and modern image - Sponsor of the UEFA champions league football, gives Heineken enhanced digital rights with exclusive content on social media platforms. - ‘The negotiation’ may 2013, a social media promotions where male furniture
shoppers have to convince their partners to buy a pair of former football stadium seats to win tickets to the UEFA Champions League final - ‘Good call’ campaign, focuses on its Australian image and male audience, characters Brad and Dan, giving men advice on their ‘helpline’. Following this campaign ‘real-life’ helpline was launched in 2012 featuring video responses to common queries - Installed beach hut-themed stands outside selected Tesco stores around the UK, offering a 50p discount voucher on fosters beer in store - Adopted its strategy of associating itself with sports, by launching a promotion scheme in Oct 2013, Carling gave away sky sports passes for Now TV with their packs of beer; allowing customers to have a 24hr hour pass - ‘Its good… but its not quite Carling’ – TV ad campaign featuring various scenarios where people attempted amusing or bizarre feats
Fosters
Carling
The competing brands listed above all share a common ground, with the focus of many of their campaigns on both TV and online advertising with a strong emphasis of football association. They also provide an emotional understanding of football with a humorous approach to keep campaigns light hearted. Another aspect states that smartphones are widely used amongst competitors as they are ‘currently owned by some of 70% of the Internet using population’ (Davies, 2014) many brands have shown their interest in these figures by successfully adapting apps into their marketing strategy. Carlsberg can include this into their marketing communications to potentially encourage a stronger presence across mobile phone apps. 4.0 Internal Context 4.1 Financial Constraints Parent company Carlsberg Group reported a fall in beer volume sales, Western Europe dropped 5% during the first half and the UK market declined by 4% during the second quarter of 2013. It was suggested that sales fell due to the poor weather conditions and made difficult to compare to the year before as Carlsberg had sponsored the Euro 2012 football championships (Thomas, 2013). A 1/3 of Carlsberg Group’s profits are produced in Russia, where 10 of its breweries are based. Due to Russia’s recent regulatory crackdown on alcohol, higher taxes and falling demand, Carlsberg may have to close some of its breweries in Russia (Milne, 2014), which will undoubtedly have a considerable effect on Carlsberg’s profit margins. These constraints place a restriction on the available finances for Carlsberg Pilsner and can limit the funds for a potential communication strategy. 4.2 Organisational Identity, Culture Values and Beliefs Adapted from Kelley and Jugenheimer, 2011
Sociability
Probably the best beer in the world Football association
Iconic status
Humorous Connection Logo Passionate Authentic, Leading Ethics high quality football and a sponsor natural Friendly product Authentic Refreshing
Drinking with the world of friends
Culture, values and beliefs
Brand Essence Identity and personality
Source:Carlsberg Group, 2014 By collectively analysing each characteristic from the model above gives the ability to capture the brand essence of Carlsberg. It is important to consistently apply these values into a communication strategy in order to create a symbolic meaning if it is to attain loyalty and attraction of new customers. Carlsberg puts a strong emphasis on sociability and connecting with passionate football fans alike, evidenced across many of their current advertising campaigns. 4.3 Marketing Expertise & Agency Availability and Suitability Carlsberg outsources many of their marketing communications; agencies included on their roster include JWT, Fold7, Santo and Saatchi & Saatchi. Saatchi & Saatchi recently created a world cup-themed TV commercial to help kick off the latest, longterm campaign for Carlsberg (Loyatt, 2014). Launched on the last day of the Premiership season, the advert boasts their understanding of the frustration endured by English football fans. The advert shows how Carlsberg would rectify the situation with ‘The Fan Squad’ and celebrate with the finishing strapline ‘That calls for a Carlsberg’. A similar take on their ‘If Carlsberg did the…’ campaign, which reinforced the loyalty felt between the brand and consumer. Saatchi & Saatchi’s agency works well with Carlsberg’s marketing strategy as their approach is to ‘turn brands into Lovemarks and generate loyalty beyond reason’, as their mutual interest is ‘passion’. Digital agency Konstellation is currently helping Carlsberg to better engage with consumers and fit the modern social media mind-set, by running an on-trade promotion ‘Happy Hour 2.0’. The promotion utilises the social integration of Instagram. Visitors to participating bars have the opportunity to purchase Carlsberg at half price by uploading pictures with the name and venue with the hashtag ‘#HappyBeerTime. Currently the promotion is being trialled in Denmark before entering the UK (Joseph, 2014). Global marketing campaign ‘The Ride’ launched in 2013 to support its sponsorship of the new football season, an advert featuring a number of football commentators on a rollercoaster, symbolising the ups and downs of the football season (Wisson, 2013)
5.0 External Context 5.1 Stakeholder Map
_____ Indicator’s of key stakeholders
The information above, classifies each stakeholder that can potentially influence or be influenced by Carlsberg’s marketing communications. An integrated marketing communication strategy can be designed to meet the needs of the stakeholders whilst achieving Carlsberg’s communication objectives.
5.2 Communication needs In order to stay competitive within the beer market, Carlsberg’s communication needs are to; - Utilise mobile phone apps or near communication device to raise brand awareness - Promotional activities via social media to inform and engage consumers - Communicate responsible drinking through its advertising - Differentiate its packaging from rival brands such as Grolsch, Becks - Run packaging promotions throughout the festive period when purchasing habits are at peak
5.3 Macro-Environmental – PESTLE Analysis Political
Environment al
Social
Technologica l
Economical
Public health issues have led to an increased focus and concern about the health impact of alcohol consumption. Politicians have been trying to reduce the general consumption rate by legislating more restrictive policies and increasing alcohol taxes. Increased alcohol taxes can lead to lower sales, revenue and market value for Carlsberg. Another political issue is ‘Binge Drinking’ as stated in section 2.3 of the report; it has become a pressured topic for Prime Minister, plans for a minimum pricing of 45p per unit are to be set to help tackle the problem. Corporate Social Responsibility (CSR) is becoming a rising concern amongst consumers. Carlsberg Group has responded to this trend and has built CSR into their corporate strategy. Carlsberg strives; - Environmental efficiency in the breweries - Delivering sustainable packaging solutions - Reducing fuel consumption by enforcing the global route planning tool to all logistics - Exploring new ways to reduce water consumption and enable sustainable use of water (Carlsberg Group, 2014) By declaring to be eco-friendly and taking social responsibility will help Carlsberg to gain a competitive advantage against their rivals. There has been a rising trend amongst consumers to be more health conscious. The government face costs associated with poor health. Initiatives such as Change4Life, aim to promote healthy lifestyles and encourage consumers to cut down on less healthy drinks such as alcohol (Wisson, 2014). This has affected the beer market as consumers aim to drink less to help benefit their health. In order to suit the health conscious preferences of these consumers, Carlsberg have introduced a range of low-calorie lagers. Highly developed technology has allowed for Carlsberg to incorporate sustainable packaging solutions into their corporate strategy as the scarcity of natural resources increase. The rise in internet users is continually growing; by the end of 2014 the number of users worldwide will reach 3 billion (Sanou, 2014). Carlsberg can take advantage of this by connecting with its potential or current customers through campaigns, or the use of popular apps such as Instagram, facebook or snapchat. - The economic crisis has created a rising price for alcohol over the past 5 years, showing a steady decline in the volume sales of alcoholic drinks. ‘a 2.1% reduction in consumption per head in 2013, and has fallen 18% in the past decade alone’ -
Exchange rate fluctuations can have a substantial impact on Carlsberg’s income and profit as revenue and purchases are translated into Carlsberg’s currency, DKK.
-
The uncertainty of interest rates can have an adverse effect on both
Carlsberg and the consumer. The rate has been at an all time low of 0.5% so Carlsberg isn’t affected although forecasts show that a small increase is due to 0.75 mid 2015 (Lambert, 2014). This can have a negative impact on the Group’s finances, as debt repayments will also increase leaving with less income for the business. The consumer will also have less disposable income to spend on luxury products like lager causing a reduction on sales for Carlsberg. -
Legal Legal
‘The uncertainty of barley prices place added demands on producers margins as well as on licensees, who are finding themselves subject to breweries passing on these higher input costs’ (Wisson, 2013) Advertising Standards Authority has applied stringent mandatory rules across all media platforms to minimise binge and underage drinking. Carlsberg cannot direct their ads to under 18’s or contain anything that reflects youth culture; irresponsible behaviour, social success or sexual attractiveness. Ads cannot be placed around programmes that target audiences under the age of 18(ASA, 2014). This legislation reduces Carlsberg revenue opportunities. Competition laws are enforced so that acquisitions are not possible in order to prohibit a monopoly situation. ‘In 1996 the British competition authorities banned Carlsberg-Tetley and Bass Breweries to merge, as it would create competitive disadvantages on the market and gain a monopoly situation in the UK’ (Stefansson, 2011)
6.0 Conclusion 6.1 Key Issues - Predominantly drunk by 86% male; need to target a wider audience - Competitors have a stronger online presence amongst social media; Carlsberg lack of mobile apps to push awareness. Instagram trial in Denmark is unrealistic as laws are different than the UK - Struggles to differentiate against rivals - Negative perception due to opposing the governments proposal of introducing minimum unit pricing for alcohol - Rising trend amongst consumers to be more health conscious 6.2 Marketing Communication Objectives
1.To increase awareness by 20% within the first 2 months of the campaign launch among women aged 25 to 34, as lager is predominantly drunk by 86% of men. 2.To increase Carlsberg’s online presence by 15% within the first month of the campaign, by launching promotions through the mobile app Instagram to help engage consumers and change current perceptions. 3.To differentiate Carlsberg from its competitors within the first 6 months of the campaign launch, by redesigning the bottle. This to help distinguish itself from its competitors on the supermarket shelf to discover whether if it has a positive effect on volume sales compared to the previous year.
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