INSIGHT REPORT PROJECT 1: Harboe Asia CLIENT: Harboe MADE BY: GROUP 10
THE REMARKABLE COMUNICORNS __________________________
Christoffer Jacobsen Frederikke Kamper Karina Hvid Jensen Mads Korsholm Martin Madsen Stina Stuckmann Wendy Kentrop
E-CONCEPT DEVELOPMENT Team 6, 2. semester e-Marketing and e-Communication
DATE OF DELIVERY: 27th of February 2013
Christoffer Jacobsen Creative Assistant
Frederikke Kamper Art Director
j1989@live.dk
Karina Hvid Jensen Researcher
Mads Korsholm proofreader
karinahvid@gmail.com
Martin Madsen Project Manager
m.kloch@gmail.com
Stina Stuckmann Leader
stinastuckmann@gmail.com
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Frederikkekamper@gmail.com
Mmadsen87@gmail.com
Wendy Kentrop Report Manager
wendykentrop@gmail.com
SWIMMING IN THE POOL Problem Area 5 Client Goal 5 Constraints 6 Problem Formulation 6
MARKET ANALYSIS The Macro environment 7 Legal 7 Economical 7 Socio-cultural 8 Technological 8 Subconclusion 8 The Micro environment 9 Power of suppliers 9 Power of customers 9 New entrants 9 Substitute products 10 Competitive rivalry 10 Subconclusion 10
COMPETITOR ANALYSIS Position map 11
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THE CHINESE PEOPLE Target group analysis
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Culture analysis 13 Power distance 13 Individualism 13 Masculinity 13 Uncertainty advoidance 13 Long-term orientation 13 Persona 14 Subconclusion 14
THE PEOPLE OF INTEREST Stakeholder analysis 15 Subconclusion 16
SUMMING UP THE REPORT TOWS on insight
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Conclusion 18
THE SOURCES Internet 20
APPENDIX Appendix 1 22
THE PROCESS Project management breakdown 19
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Gantt chart 19 Light scrum board 19 Stand-up meeting 19 Teamwork 19
Appendix 2 22 Appendix 3 23 Appendix 4 23 Appendix 5 24 Appendix 6 25 Appendix 7 26 Appendix 8 27
SWIMMING IN THE POOL
CLIENT GOAL
PROBLEM AREA When entering a new market, especially Asia, it is crucial to have a strategy that fits the new market and the cultural differences that exist between countries. This not only applies when entering new markets in Asia. Recently the large furniture store ILVA tried to expand to the UK, and became an expensive edition of IKEA, without any luck. After just two years, three stores had to be closed, registering a loss of over 600 mill. DKK (Source 1). When Harboe wants to export their products to Asia, it will be with increased challenges compared to ILVA’s expansion to the UK, as the Danish culture is much more similar to the UK culture than to the Asian. Latest, JYSK’s strategy in China has failed, resulting in them only having opened 9 of 500 planed shops. This is due to the fact that JYSK has branded themselves as a discount brand. However the Chinese middle class only wish to buy prestigious products, when it comes to imported brands (Source 2). To avoid issues like the two examples above, Harboe wants a marketing tool-kit, that makes it possible for their partners to know how to act when applying a marketing strategy on the B2C market in Asia. This marketing pool should help Harboe become an internationally recognized key player on the imported beer market in Asia.
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With focus on Harboe’s beer range, the goal is to create a communication and marketing strategy that will increase awareness and positive perception of the brand in Asia and provides Harboe with a marketing tool-kit before the end of 2013.
“A marketing strategy is a process that allows Harboe to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage” (Source 42)
A marketing tool-kit is a ready made pile of information including a communication and marketing strategy that is ready to be implemented by the media agencies
“a communication strategy is a method of communicating Harboe’s unique and valued difference by way of compelling copy and graphic design” (Source 43)
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CONSTRAINTS
PREDEFINED In order to reach the goals, the project has been given some restrictions by Harboe. Visually, both the logo of Harboe and their products must stay the same as they are right now. Furthermore the logo of the various brands should be visible in the advertisement, when applicable. Moreover it’s important not to do corporate branding by using the name Harboe, but focus on the different products and private labels in the portfolio.
LIMITATIONS Limitations set by the project group is to focus exclusively on the Bear Beer range and narrow it down to the Chinese market. This is done to increase the chance of success when entering the market, as the solution doesn’t have to be wide enough to fit all the people in Asia, but only a few segments in one country. Sources say that if success is reached in China, the chances of getting success in the rest of Asia increases too (Source 3), making China a good market to begin with.
PROBLEM FORMULATION
By which means should Harboe’s beer range be branded on the Chinese market in order to create brand awareness and positive brand perception?
When looking at the problem area and the goal Harboe set for the solution, the problem formulation consists of the following main question with related sub-questions and follow-up lines of inquiry.
SUB FORMULATIONS AND ENQUIRIES How is the macro environment on the Chinese beer market?
Analyse the conditions of the Chinese beer market.
Specify the Chinese area that we will be the main focus throughout the project. How can competitors of Harboe be identified to get a better insight in the Chinese beer market?
Analyse the competition of Harboe on the Chinese beer market.
Create a position map, focusing on price and quality, for the Chinese beer market.
Who should be the main target group for Harboes Bear Beer range on the Chinese market?
Identify segments on the Chinese beer market
Determine the most potential segments on the Chinese beer market. Create a differentiated positioning strategy How does the Chinese culture affect the Harboe brand?
Analyse the Chinese culture and its influ- ence on the beer and alcohol consumption. Who are Harboe’s stakeholders?
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Identify the relevant stakeholders
MARKET ANALYSIS In 2011, China’s beer consumption hit 50 billion liter mark, which was 26 billion liters more than the second largest market, the United States. On top of that China’s beer consumption have increased with 29% from 2006 to 2011 and is still growing exponentially. Today China is still the largest beer market worldwide, making it very attractive for companies, because of the future potential. (Source 4) Since China is a huge country, containing numerous markets that are fragmented and differ from each other in several ways, it is necessary to delimitate the country in order to target the future marketing and communication strategy. At the end of 2012 Shanghai was ranked as the second most favoured tier-city for investment and the number 4 most popular for development in Asia (Source 5). As a part of East China the city represents only 19% of the total beer market in China. But what is interesting, is that Shanghai, with 50%, is the largest market within premium beers of China, and therefore occupies the position as market leader (Source 6). Based on the findings above, Shanghai is an optimal market for Harboe to brand themselves and raise awareness with the intention of influencing the rest of China and further Asia.
THE MACRO ENVIRONMENT
To analyse the macro-environment the PESTEL will be taking into use. This model includes six types of important environmental influences that can affect the market opportunities in both positive and negative ways. The purpose is to find out where to use or adapt the environment. When making a PESTEL analysis, one has to be critical and selective toward the data input. To get an in-depth analysis, the focus is on a few areas instead of a long list of peripheral info. Furthermore it has been decided to omit the Environmental factor as it’s not relevant for the branding aspect of this project, and the Political factors because they in this case falls under Legal factor.
LEGAL When it comes to legal factors, one of the most important ones is to clarify the minimum ages to legally purchase and consume alcohol. Like the majority China’s minimum age is 18 years both in terms of on and off premises (Source 7). Referring, respectively, to the sale of beverage alcohol for consumption at the site of the sale (e.g. cafes) and elsewhere (e.g supermarket). What moreover plays an important role is the regulations of alcohol advertising in the Chinese media. These regulations can be seen in appendix 1.
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Another factor that might have an influence is that most of the Chinese people are grown up in a society that does not encouraged initiative, which has resulted in that they are not used to brainstorm marketing messages (Source 8). To focus on one example, guerrilla marketing could turn into a very bad promotion strategy. If you are handing out flyers on the street, it could in worst case cost you a few days in jail (Source 8).
ECONOMICAL Today, China has a population of over 1.3 billion, which means 20% of the world’s population resides in China (Source 9). The GDP (gross domestic product) growth, averaging about 10% a year, has lifted more than 600 million people out of poverty. With the huge number of population, China has become the second largest economy and is playing an important role in the global economy (Source 10). Today Shanghai is placed in the top 10 list of the most economically powerful cities in the world (Source 11). A picture is said to be worth a thousand words, the picture in appendix 2 clarify the global development of Shanghai from 1990 to 2010. Shanghai is still growing so fast that the city is projected to become the world’s most economically powerful city over the next two decades. In 2010
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only Shenyang achieved faster income growth than Shanghai, and only Riyadh achieved faster employment growth, within the 200 richest cities worldwide. The McKinsey Global Institute believes that Shanghai will grow faster than every other city in the world. (Source 12) Based on this, it can be concluded that the growth of China in general, and especially Shanghai is stable and growing every single day. Shanghai is a big magnet for foreign companies to invest.
SOCIO-CULTURAL Chinese consumers have a strong need for more cultural flavour in their entertainment and leisure activities and one of the most sought after is gourmet food (Source 13). Regarding food occasion this is also where the majority of Chinese alcohol consumption happens (Source 14). In the Chinese culture alcohol plays a key role. The idea of luxury is definitely an increasing trend among Chinese people and they are furthermore keen to associate drinking good quality beverages with success. This reflects in their willingness to pay more for brands that gives them a prestigious status, which they eager to show off, resulting in an enormous thirst for imported high-end brands. (Source 14) This described idea of luxury is a cultural trend that will be the “End of cheap Chi-
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na”. China is changing, as the “Chinese people seek not to make iPhones, but to buy them” (Source 15). Based on this it can be determined that a lifestyle of luxury of the Chinese people is expanding. The opportunity for premium import beers is definitely there in terms of the Chinese luxury lifestyle, but this lifestyle requires a certain financial surplus, and the country is not rich to the core. But much of what used to be highbrow culture, enriching Chinese lives, is now more accessible to the general public (Source 13).
ity fitting room are some examples (Source 16). Even when the people in Shanghai go out, they almost remain in their own little technological world with their device in front of them. This trend is resulted in people almost no longer communicating face to face. They build up a virtual world to communicate and socialise. Two people sitting together do not necessarily interact with each other, they are looking more at their smartphones than at each other faces - it’s a common scene (Source 16).
SUBCONCLUSION TECHNOLOGICAL The last step is the technological factor, focusing on the development of technological platforms on the Chinese market. An important trend on the market is that more people have “me consumption”. Enthusiasm for personal media are greater than in most other countries. Personal media, blogs and personal pages are good examples of this trend (Source 16). In China a lot of new technological media platforms are being developed. A new technical media is an application (Vuella) for tablets with the opportunity to watch TV anywhere, while you are networking. The trend has moved from smart TV to social TV. To mention other technological media platforms, QR code shopping and Augmented Real-
China has become the second largest economy, and Shanghai is placed on the top ten list of the most economically powerful cities worldwide. The Chinese beer market is the largest market in the world, making it a market with future potential. Luxury is a growing trend among Chinese people and international high-end beer products have turned into a success. Therefore, alcohol plays a key role in the Chinese culture because the lifestyle of luxury is expanding. The technological factor consists of enthusiasm for personal media, an existing, continuing and potential trend. The Chinese market is exploding with different media platforms and these are still increasingly being developed.
THE MICRO ENVIRONMENT
To help understand the nature of the current competitive situation on which a company is placed, a Porters five Forces model can be implemented. The model consist of 5 identified forces that act to either increase or reduce the competitive forces within an industry. Implementing this model will give an overview of what the company’s strengths and weaknesses are, in the competitive market of premium imported beers, and at the same time help kickstart the creation of a competitive advantage.
POWER OF SUPPLIERS The bargaining power of the suppliers is increased by the fact that there is little product differentiation on the ingredients used for the production of beer, as well as for the packaging used (Source 17). However, as there is a high amount of available suppliers of the required raw materials such as grain or aluminum, the bargaining power of the suppliers is low to moderate. Additionally, the larger breweries can afford to, and have, integrate backwards into the growing of required ingredients for brewing, as well as for the production of the packaging. Over the last years there’s been a major increase in the prices of the required raw materials of the breweries (Source 18). As Bear Beer is imported, another factor that has a major impact on the logistic’s costs are the rising fuel prices. (Source 19)
POWER OF CUSTOMERS
NEW ENTRANTS
Bargaining power of customers is high in the brewing industry.
Threat of new entrants is high in the brewing industry.
The power of the customers is relevant as it can influence the price the brewery can charge for their beer, and as a result have huge financial consequences for the breweries. The main customers of the brewing industry consist mainly of national food chain stores, local groceries, convenience stores etc. Because of their larger sales amounts it must be assumed that the national food chain stores have the biggest power towards the breweries. Generally the customers have a high bargaining power towards the breweries. Beer is a fairly homogeneous product with low to nonexistent cost when it comes to the customers changing their supplier. If the customers have no preference toward the beer they drink, their bargaining power increases. However the more differentiated a beer is, for example through brand or taste, the higher cost of changing for the customers.
The larger breweries have several big scale manufacturing benefits which makes it hard for new entrants to match their expenses of production. As a result of the market having a huge amount of beer variants (Source 21), which makes it hard for a new entrant to differentiate itself, effectivisation and cost reduction is a major focus area for breweries. As Bear Beer is branded as a premium import beer they are not primarily competing with the lower priced local beers (Source 20). They do however have to compete on a pricing level with other import beers in the same class such as Bitburger and Valentins. As more western breweries sees the potential of the Chinese market the threat of new entrants increases drastically (Source 21). As the beer market in China consist primarily of a few major operators (Source 22), as well as a large amount of smaller local breweries, a new entrant would have to buy its way into the market. To start up a local brewery is relatively simple and does not require major capital. However, to operate a brewery in a larger scale requires a large amount of branding and distribution knowledge. An investment is needed to become a major operator in the
As Bear Beer is being marketed as a premium beer (Source 20), they have an advantage over the lowend beer brands and non-label producers. Furthermore Bear Beer can be branded as both a german and danish produced beer (Source 20) which adds to its traditions and helps increase its brand value.
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beer market, this both for production and logistics, as well as marketing to create brand awareness.
SUBSTITUTE PRODUCTS Threat of substitute goods is high in the brewing industry. There are many substitute products to beer, ranging from other alcoholic beverages such as hard spirits and wine to non-alcoholic beverages such as juice or soda. Because of more western oriented buying behaviour, and an increased standard of living, the demand for more luxury goods in China is increasing. As a result the Chinese customers have started looking towards the more refined spirits such as cognac, whiskey and foreign imported wines (Source 23).
COMPETITIVE RIVALRY The competitive rivalry can be measured in two dimension, demand for product and market concentration (Source 24).
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The market concentration can be measured by looking at the four-firm concentration ratio, measuring the total market share of the four largest operators in the market. Furthermore If the demand for the product is low, the rivalry is high. The top four firms control 59% of the Chinese beer market (Source 25) making the market concentration in the higher end. As a result of this the competition is fierce and the breweries are more interdependent on each other, if one brewery launch a new product, the others will try to copy this product. The beer market in China has seen a major increase over the last few years and shows no signs of slowing down (Source 26). As mentioned China is already the biggest beer markets in the world, but an estimated growth of 41.8% from 2009 to 2014 is expected, making China a very important market to continue to focus on (Source 27). Despite the high barriers of entry into the market, the internal competition to gain market shares is very hard. Furthermore there’s a lot of substitute products where especially the more luxury spirits are threatening to steal market share from the beer market. The result of a high market concentration and the threat of current and upcoming substitute products makes the rivalry in the industry high.
SUBCONCLUSION Based on the Porter’s 5 Forces analysis the following can be concluded. There’s a huge amount of substitute providers of premium beer on the Chinese market. This makes it critically for Bear Beer to stand out and differentiate themselves from the competitors, this either by emphasizing its country of origin, traditions or history. The competition of the breweries is fierce on the Chinese market, but there’s a huge demand for premium beers. Furthermore a major growth in demand for premium beer is expected over the next few years. As a result the potential of the Chinese market is enormous, as long as it’s handled correctly.
POSITION MAP
COMPETITOR ANALYSIS
HIGH QUALITY
Bitburger Ottinger
To gain an overview of the competitive market on which Bear Beer is located, a position map analysis has been conducted over the closest import beer competitors of Bear Beer. The position map allows the company to classify the existing market products in different position categories, and from this clarify how their product can be differentiated.
Radeberger Bear Beer Apostel Faxe
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LOW PRICE
HIGH PRICE
Yanjing
LOW QUALITY FIGURE
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The x-axis represent pricing, the y-axis quality. Pricing based on information from client, quality based on scoring from BeerAdvocate.
All beers mentioned in the position map are premium import beers based on the same market as Bear Beer, and as a result, primary competitors. The exception is Yangjing, a local Beijing non-premium beer which has been included for the sake of comparison. As seen in the position map the premium beers are positioned quite closely. They all maintain a fairly high quality, but are in the higher end of the price scale compared to the local non-premium beer.
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Looking at the premium beers they are primarily fixed around the average line. This means their customers get what they pay for, but not much more. An exception is the Bitburger beer which is positioned higher, in terms of quality, than most of the other premium beers, but is a bit cheaper and as a result adds more value for the money to the customer. As Bear Beer isn't differentiated more on either quality or price, compared to some of its closest competitors, it's important to find other areas to differentiate itself in and add value to the customers. This could for instance be to differentiate it by its brand, traditions, large product range, country of origin etc.
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THE CHINESE PEOPLE When creating a communication and marketing strategy it is important to know who the strategy is targeting. Due to this, a target group analysis is made, followed up by an analysis of the Chinese culture. The results of the two elements are combined in a persona describing a typical user within the primary target group.
TARGET GROUP ANALYSIS
For the purpose of analysing who the most relevant target group for Bear Beer on the Chinese market is, the STP model is used. This is done through segmenting the market, choosing the right segment to target and figuring out a way to position Bear Beer to this exact segment with the use of differentiation. With the Chinese being a very diverse population (Source 28), it becomes extensive to look at all the various segments within the country. Due to this, a study released by Accenture is included. The study is based on a survey with more than 1,000 respondent consumers from urban and suburban areas in China, resulting in the identification of six distinct customer segments, three of them being relevant when talking about foreign brands like Bear Beer (Source 29). The three relevant segments are looked at through the following segmentations criteria: geographic, demographic, psychographic and behavioural. The first one is called Young Royals, covering college-educated adults in their 30s and up, mainly women (Source 30). They have the highest disposable income of all Chinese, with an average of 221,268 yuan per year (Source 31). They are twice as likely as the other segments to buy newly introduced brands (Source 30). Other than that, they are free-spending and first mover in the sense that they like to be the first ones to test new brands (Source 32).
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The second segment is The Aspirationals, covering young male and females who, like the young royals, have a high brand-consciousness. They really want to have the “latest and greatest” (Source 30), but with an average income of 94,666 yuan per year, they can’t actually afford it (Source 31). The last one is The Established Money segment which is placed between the two other segments, covering men and women with an average income of 134,343 yuan per year (Source 31). They also like to have the latest in high-end exclusive products, but they are seen as followers, because they value brands that are well recognized in the market already, rather than new brands (Source 30). To evaluate the three segments above, the SOCCmodel is used. When looking at the four factors of the model, the segment that is most relevant as a primary target group is the Young Royals. Their buying power is high due to the level of income, and one can suspect that the segment will growth in the future, because of the improved GDP, resulting in an improvement of the Chinese people's standard of livings (Source 33). The showing off mentality (cf. market analysis) and the lifestyle makes it possible to target them directly in their everyday life. The focus will be on the Young Royals living in tier one, since trends in these tiers most often spread to the other tiers (Source 34). As a secondary target group the Established Money segment is relevant. They have the money to buy premium beers, but at the same time they only want
CULTURE ANALYSIS
to buy Harboe’s beers after the Young Royals has recognized the brand. When targeting this segment, the strategy is, to do concentrated marketing, where a specific beer within the Bear Beer range is chosen to this specific target group. Based on the fact that it’s socially acceptable for men to drink high strength alcohol, but not yet as accepted for women (Source 35) the beer that will be the focus in this project is the lightest within the Bear Beer range, which only contains 4.2% alcohol (Appendix 3). Choosing this one beer makes it simple to target the communication strategy to the segment. Differentiation occurs first of all in the choice of target group. Women are not the traditional choice when selling beer, but in the three largest cities of China (Beijing, Shanghai and Guangzhou) around 35 % of all beer consumers are women, making this a potential market which at the same time is growing (Source 36). At the same time an ESP is established through the history of the company. The fact that Harboe is a Danish company is an advantage, because the Chinese people see Denmark as a land of fairytales (Source 34). In this context it's also a plus that Denmark is typed on the can of the beer (Appendix 3).
To understand how the Chinese cultural society works, it’s important to look at Hofstede's Cultural Dimensions, in order for Harboe to know how to react when expanding on the Chinese market. (the analysis is based on appendix 4)
POWER DISTANCE In China the power distance is very high, which is reflected in the Chinese everyday life. As described, they prefer to buy premium products, to show that they can afford it and that they belong to an upper level of the hierarchy in the social life. This is important for Harboe, as they need to target this upper level when branding Bear Beer to the women of this segment.
INDIVIDUALISM The population is highly collective, and acts a lot upon what the crowd says. Again, this is because of their status in the population, where it’s a disaster to lose face in front of colleagues, friends and family. However, the primary target group is slightly more individualists, as they often react as first mover or doesn’t hesitate to try new things
MASCULINITY The Chinese culture is very masculine. It consist of a lot of working hours. They highly prioritize work above sparetime. This means that a lot of their time is used on their job together with their colleagues.
UNCERTAINTY ADVOIDANCE The uncertainty avoidance is very low in China. They are willing to take a calculated risk, as long as they gain prestige from it. This is important to Harboe’s target group, as they want to sell a premium product to a segment where focus from competitors is not very high.
LONG-TERM ORIENTATION Even though their uncertainty avoidance is low, Chinese people are also long-term oriented. Yet most of them strive to show prestige, however some need to save up in order to be able to buy the prestigious products and ensure that they are safe for the future. For this project’s primary target group this isn’t something that is of big concern.
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PERSONA
Hu Mei work as an Art director at ZucZug Fashion in Shanghai. She is married to Lu Yizhi who is the IT director at Cisco. They live in a house in Shanghai. She spends a lot of time updating her personal blog with the newly bought fashion element on both her computer and iPhone. Her iPhone is in her hand 24/7 and she is always in contact with her girlfriends to arrange the next meet up at one of Shanghai’s gourmet restaurants. When surfing on the internet, she seeks the latest news on the largest media sites in China, following the latest trends in the fashion world by reading other blogs and watch clips on YouTube and YouKu for the latest fashion shows.
Hu Mei Ziyi AGE GENDER OCCUPATION LOCATION STATUS
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34 years Female Art Director Shanghai Married
Hu Mei is present on a few social media platforms. Twitter and Weibo is used in connection to her personal blog, where all her followers can see her opinions on trends and get notified when she posts something new on her blog. For personal use, she spends a lot of time on renren.com where she keeps track of all her personal connections such as freinds and familiy, that she values a lot. When not spending time with her husband, she likes to hang out with her closest friends. They like to grab a glass of wine or a light beer as long as it taste good. When going out, she thinks a lot about how she looks and which signals she sends.
This is important to her, when working in the fashion business, and to impress her friends. Furthermore she wants to show that she’s an independent person that can stand up for her self. When looking forward, her desire is to give birth to one child, and move up in the hierarchy, within or outside ZucZug Fashion.
SUBCONCLUSION With the target group being women who act as first movers with an high income, Harboe needs to brand the lightest beer in the Bear Beer range as a luxury beer, that must signal that you know what good quality is if you drink this beer. The focus when branding the light Bear Beer should be on the danish history and especially on the ESP, being that the chinese perception of Denmark is that it’s a fairytale country. Because of the large workload, in the target group, the Bear Beer will often be consumed together with coworkers after work, which is why it should be branded as a social beer. With this strategy, Bear Beer will differentiate from the other premium beers on the market, as the focus on women beer drinkers is very low, even though it’s a growing market.
THE PEOPLE OF INTEREST Besides the project group and client involved, other stakeholders also have a share of interest and power in the project. In order to put things into perspective and find out who needs to be taken into account at certain decisions in the project, a stakeholder analysis is the perfect tool to use (Source 37). Conducting such an analysis before any final implementation allows the project group to adjust the presentation and communication later in the research, to make the project outcome appeal the best way possible to stakeholders (Source 38).
STAKEHOLDER ANALYSIS
The stakeholders of this project are to be divided into two groups: internal and external. The internal stakeholders (Figure 2 ) are the ones that are considered being part of the organisation. The main communication strategy to the internal stakeholders includes developing positive working relationships and managing their positive attitude towards the project. (Source 39) The internal stakeholders are:
1.
Harboe’s local Asian media partners
2.
The distribution centre for their beers
3.
Retail stores in China that are already selling their products
4.
Retail stores in China that aren’t familiar with or selling Harboe’s products
5.
The consumers
• The Asian location of Harboe
The Power/Interest matrix shows the influence and importance of the named stakeholders.
• Harboe’s beer supplier
(Figure 2 , page 16).
(German partner)
• Harboe’s main office. The external stakeholders (Figure 2 ) are not directly part of the organization, but still have a certain interest in the project. Since the concept report will consist of a communication plan among other things, knowing who is the largest influence and needs to be taken into account at the launch of the project will result in a solid base for the yet to be created communication plan. The external stakeholders are following.
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POWER/INTEREST MATRIX 2 INFLUENCE / POWER OF STAKEHOLDERS
FIGURE
The consumers
MEET THEIR NEEDS Asian retails that would potentially sell Harboe beer
SUBCONCLUSION
The Asian location of Harboe (German partner)
KEY PLAYER Local Asian media partners
Harboe’s main office
LEAST IMPORTANT Asian distribution center
Asian retails that are already selling Harboe
SHOW CONSIDERATION
Beer supplier
INTEREST OF STAKEHOLDERS 16
Harboe’s Asian location and Chinese media partners are the key players in this project. They have to be satisfied and well informed throughout the project. In collaboration, they will fire off the project. Harboe’s main office and the Chinese retails that are already selling beer are not key players, as they don’t have much power over the project. But they need to be shown consideration in terms of providing information. Meeting the needs of the consumers and Chinese retails is very important. As they do not necessarily show much interest in the outcome at first, very fine and strategic communication towards these two groups are the key to success. Boring them will lower their interest, while making them enthusiastic about the product will be the key to success. Harboe’s beer suppliers (their breweries) and the Asian distribution centre have low power and low interest, however care should be taken to avoid the dangers of unfavourable lobbying and should be closely monitored and kept on board.
TOWS ON INSIGHT
THAT’S HOW SUMMING UP WE IT THEDID REPORT
OPPORTUNITIES
FIGURE
THREATS
To get a clear overview over what was found out during the questioning and insight phase, a SWOT analysis is made (Appendix 5), making it possible to create a TOWS matrix (Figure 3 ) with the post relevant strategies to work with in the solution phase. Finally there will be conclusion on the report.
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STRENGHTS
WEAKNESSES
MAXI MAXI
MINI-MAXI
Use the danish history, the awards and the experience Harboe has in exporting, to attract Chinese women, focusing on their luxury lifestyle and wish for imported brands (S1, S2, S4, O2, O3 O5, O6)
Create a differentiation in the position for Bear Beer in Shanghai using personal medias, focusing on the luxury lifestyle and the wish for imported brands, with the opportunity of future spread to other tiers and asian markets (W1, W2, O2, O3, O4, O5, O6, O7)
MAXI-MINI
MINI-MINI
Meet the high competition which occurs from the many substituting product, threats of new entrants and high market concentration by market Bear Beer as a high quality Danish product. (S1, S2, T2, T3, T5)
Primarily focus on online media platforms to target the trend of device communication (W1, T5)
When looking at the four strategies in the TOWS matrix, it was found to be most relevant to work in the field of the strategies Maxi-Maxi and Mini-Mini since these two strategies work well together and make a good base for a solution.
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CONCLUSION
The beer market in China consists of a huge amount of different players and the competition is fierce. However, as the Chinese beer market is the largest beer market in the world and yet still growing, with a huge expected growth over the next few years, its potential is enormous. Based on desk research, Shanghai was chosen as a main emphasis point for the basis of the solution. Shanghai is experiencing a major growth and is expected to be the world’s most economically powerful city over the next two decades, furthermore Shanghai already is the largest market within premium beer in China at the moment, resulting in it being a highly relevant market to target. A growing trend among Chinese people is luxury and the Chinese seek towards more high-end beer. As a result, Bear Beer fits the market optimally and their opportunity for expansion is huge. However, as Bear Beer doesn't stand out particularly, compared to its closest competitors, in either quality or pricing, a different form of differentiation is needed. Today the focus on Chinese beer drinking women is very low, which is a perfect opportunity for Harboe to be differentiated. The main target group for Harboe’s Bear Beer on the Chinese market consists of women. This segment is first movers with a high income and a preference for luxury beers with good quality.
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Furthermore, Harboe’s beer needs to be differentiated from other competitors and the product will be branded on the ESP technic. A cultural norm in China is that coworkers often grab a beer after work, and that is why the beer should be launched as a social beer. Based on this branding strategy Harboe will be differentiated from other premium beers on the specific market. Meeting the needs of the Chinese consumers and retailers is critical as making them interested and enthusiastic about the product is the key for this project. Furthermore, the Chinese location/media partners are very important to satisfy as their involvement is what fires off the project. Based on the TOWS it can be concluded that the use of Danish history and Harboe’s export experience is an optimal Maxi-Maxi strategy. Another strategy that will be take into use is the Mini-Mini strategy, which will focus on online media platforms to target the trend of device communication. This insight of Harboe’s Bear Beer, its main competitive products, the target group, as well as trends in the Chinese buying behaviour will be used to develop a concept for a solution in the solution report.
THE PROCESS
This chapter describes the development of the project as well as the applied tools and techniques used during the project. Furthermore it reflects on why these tools were used and what the result of using them was. Eventually there will be a recommendation regarding the usage of mentioned tools. The purpose of project management is to plan, organise and control activities in order to maximise the potential for the project to succeed (Source 40). It helps to easily communicate the work and processes involved in the project. Additionally it provides a possibility to work in a more structured and effective way.
PROJECT MANAGEMENT
GANTT CHART
STAND UP MEETING
One tools that has been taken into use is the Gantt Chart (Appendix 6). It is created as a specialized bar chart used to provide a graphical overview and schedule of all task within the project. As seen in appendix 6, all the tasks are listed vertically (Yaxis), and the calendar time scale plus deadlines are listed horizontally (X-axis). The primary advantage of this tool is its graphical overview, making it easy to understand and work with for every group members.
In addition to the mentioned “overviews” providing tools, a daily Stand-up meeting has been a common ritual during the project. All team members were required to attend to the daily scrum and to answer questions, in order to gain a status update from the entire team The goal for the stand-up meeting was to boost the day with energy, to support improvement, to reinforce focus and most important to communicate. Although stand-up meetings has a social aspect, this routine was not applied to socialize.
LIGHT SCRUM BOARD To supplement the Gantt Chart, a “light” Scrum Board has been used (Appendix 7). It is a big visible chart with sticky notes containing tasks. They are all separated into different areas that represent the process of the tasks. Like the Gantt Chart it provides an overview of the project. At the same time it is also very good for communication of the status of the project, without requiring great efforts from the group members (Source 41). Scrum Boards can be completed in many different shapes and sizes.
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TEAMWORK The teamwork has worked very well. All members has shown a common respect for eachother, resulting in a good communication and workflow. Deadlines and rules have been kept, as a result of a well planned working schedule (Appendix 8). The key was the team! The group operated with a high degree of interdependence and shared authority and responsibility, with a leader in front. Most important was that every member worked towards a common goal. The group became more than just a group because the strong sense of mutual commitment created synergy and thus generated a better performance.
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THE SOURCES
INTERNET
Source 1: http://www.business.dk/detailhandel/ilva-opgiver-salg-af-engelske-varehuse (21/02/13) Source 2: http://www.business.dk/detailhandel/jysk-strategi-fejler-i-kina (21/02/13) Source 3: http://www.thedrinksbusiness.com/2012/05/chinese-alcohol-market-reality checks/ (21/02/13) Source 4: http://www.beer-universe.com/beer-education-article/2012-06-18/The-Booming-Chi nese-Beer-Market/ (20/02/13) Source 5: http://www.pwccn.com/home/eng/pr_291112.html (20/02/13) Source 6: http://test.www.carlsberggroup.com/Investor/DownloadCentre/Documents/Other%20 Presentations/12.10.05%20China%20Strategy.pdf (21/02/13) Source 7: http://www.icap.org/table/MinimumAgeLimitsWorldwide (21/02/13) Source 8: http://adland.tv/content/shanghai-advertising-rise-consumer-culture communist-country (21/02/13) Source 9: http://geography.about.com/od/populationgeography/a/chinapopulation.htm (20/02/13) Source 10: http://www.worldbank.org/en/country/china/overview (20/02/13) Source 11: http://www.theatlantic.com/business/archive/2012/05/the-10-most-economically-power ful-cities-in-the-world/256848/ (20/02/13) Source 12: http://www.theatlantic.com/business/archive/2012/05/shanghai-can-the-fastest-grow ing-city-in-the-world-keep-it-up/257021/ (20/02/13) Source 13: http://www.wpp.com/~/media/SharedWPP/ReadingRoom/Media/mec_cic_media_con sumption_trends_china_nov12.pdf (21/02/13) Source 14: http://www.thedrinksbusiness.com/2012/05/chinese-alcohol-market-reality-checks/ (21/02/13) Source 15: http://www.bookish.com/books/the-end-of-cheap-china/71df4bde-b96e-4110-b7e7- 17b562b8fa86 (21/02/13) Source 16: http://www.slideshare.net/mandywj/consumption-trends-china-2012 (21/02/13) Source 17: http://www.alabev.com/ingredie.htm (24/02/13) Source 18: http://online.wsj.com/article/SB120893468035237797.html (24/02/13) Source 19: http://events.eft.com/fuelprices/newsstories3.shtml (24/02/13) Source 20: Client Q&A Session Source 21: http://www.atimes.com/atimes/China/FC03Ad06.html (24/02/13)
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Source 22: http://www.google.com/url?q=http%3A%2F%2Fwww.bloomberg.com%2Fnews%2F2012-04-10%2Fbudweiser-is-luxury-in-china-where-beer- costs-30-cents.html&sa=D&sntz=1&usg=AFQjCNF4y41JKzxExkAn4Hm4bVwKha1Uxw (22/02/13) Source 23: http://chinabevnews.wordpress.com/category/china-rum/ (22/02/13) Source 24: http://en.wikipedia.org/wiki/Concentration_ratio (22/02/13) Source 25: http://www.bloomberg.com/news/2012-04-10/budweiser-is-luxury-in-china-where-beer-costs-30-cents.html (22/02/13) Source 26: http://www.chinadaily.com.cn/cndy/2012-04/04/content_14975794.htm (22/02/13) Source 27: http://www.warc.com/LatestNews/News/Beer%20giants%20target%20China.news?ID=29684 (22/02/13) Source 28: http://factsanddetails.com/china.php?itemid=159 (21/02/13) Source 29: http://newsroom.accenture.com/article_display.cfm?article_id=4614 (22/02/13) Source 30: http://newsroom.accenture.com/article_display.cfm?article_id=4614 (21/02/13) Source 31: http://www.chinadaily.com.cn/cndy/2007-12/04/content_6296047.htm (21/02/13) Source 32: http://www.peterhorn.dk/executivemagazine/Stoppress/080327_how_to_deal_with_china_focus_on_the_young_royals.asp (21/02/13) Source 33: http://www.ukessays.com/essays/marketing/chinese-beer-market-competitor-analysis-and-marketing-planning.php (21/02/13) Source 34: Thomas Nolsøe, Chief Strategy Officer, MEC China Source 35: http://chinabevnews.wordpress.com/category/china-rum/ (22/02/13) Source 36: http://www.nl.sg/ShowBinary/BEA%20Repository/NL/Services/ResearchServices/pdfIndustryDigests (21/02/13) Source 37: http://www.brighthubpm.com/monitoring-projects/10426-example-of-stakeholder-analysis/ (23/02/13) Source 38: http://www.odi.org.uk/publications/5257-stakeholder-analysis (23/02/13) Source 39: http://www.ehow.com/info_12073429_internal-stakeholder.html (23/02/13) Source 40: http://www.projectsmart.co.uk/purpose-of-project-manage-ment-and-setting-objectives.html (23/02/13) Source 41: http://www.projectconnections.com/templates/detail/agile-infor-mation-radiator.html (23/02/13) Source 42: http://en.wikipedia.org/wiki/Marketing_strategy (26/02/13) Source 43: http://torontomarketing.blogspot.dk/2010/02/communication-strategy-definition.html (26/02/13) Source 44: http://apapaonline.org/APAPAnetwork/Meeting_Reports/files/Auckland_Sept04/Alcohol_Marketing_China.pdf (21/02/13) Source 45: http://geert-hofstede.com/china.html (22/02/13)
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ADVERTISEMENT REGULATIONS
APPENDIX 1
These regulations mainly forbid the following matters appearing on any alcohol advertisement:
1. Encourage, spark plug or tempt people to drinking alcohol or propagandize the drinking alcohol immoderately. 2.
The actions of drinking alcohol.
3. 4.
The visualizations of young person.
5.
Direct or indirect reveal the unscientific outcomes, such as “eliminate strains and anxiety”, “enhance physical strength”, etc.
6.
Direct or indirect owe the successful events of personal, business, society, etc to alcohol drinking.
7.
The actions that have potential risk, such as driving car, boat and airplane etc.
The results of assessments for the alcohol commerce or alcohol brands.
(Source 44)
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SHANGHAI
APPENDIX 2
THE LIGHT BEAR BEER
CHINAS CULTURAL DIMENSIONS
APPENDIX 3
APPENDIX 4
118
80 66
30
20
PDI
IDV
MAS
UAI
LTO
(Source 45)
23
SWOT ANALYSIS
APPENDIX 5 STRENGHTS
WEAKNESSES
S1
Harboe has a history (Danish).
W1
S2
Harboe has received multiple awards for their high quality beer
The Bear Beer brand has not been positioned on the Chinese market.
W2
S3
Bear Beer consist of a wide range of beers.
Product doesn’t differentiate itself much in terms of pricing/quality compared to the closest competitors
S4
Bear Beer is already exported to the Chinese market.
THREATS
24
O1
China is the biggest beer market and the second largest economy in the World.
O2
Expanding lifestyle of luxury in China.
O3
The primary target group prefers imported brands and has a high buying power.
O4
Trends in tier one often spread to other tiers, and trends in China are more likely to spread to the rest of Asia.
O5
Not a high focus on women being the potential target group for beer.
O6
Growing market for women drinking beer.
O7
Enthusiasm for personal medias are greater than in most other countries
OPPORTUNITIES T1
Strict Chinese marketing legislation.
T2
Threats of new entrants is high in the brewing industry.
T3
High amount of substituting beer products in China. Furthermore the switching barriers for the customers are low.
T4
Not much communication face to face it all goes through a device
T5
Market concentration is high, leading to high competition
GANTT CHART
APPENDIX 6
TASK
RESPONSIBLE
Client goaL
All
Problem area
Martin
Constraints
Martin
Problem formulation
All
PESTEL analysis
Frederikke + Karina
Competitor analysis
Mads
Target group analysis
Stina
Culture analysis
Martin
Persona
Martin + Stina
Stakeholder analysis
Wendy
PM. breakdown
Stina
SWOT and TOWS
Martin + Stina
Conclusion
Mads + Karina
Appendix
Stina
Report read through
Mads
Report layout
Frederikke
MON TUE
WED THU
18/02 19/02
20/02
21/02
FRI
SAT
SUN
MON TUE
WED
22/02
23/01
24/02
25/02 26/02
27/02
25
“LIGHT” SCRUM BORAD
APPENDIX 7
26
ABSENCE SCHEDULE
APPENDIX 8
SAT
SUN
MON TUE
WED
THU
FRI
SAT
SUN
MON
TUE WED
22/02
23/01
24/02
25/02 26/02
27/02
28/02
01/03
02/03
03/03
04/03
05/03
14 - 21
14 - 21
10 - 17
11 - 17
WED THU 20/02
KARINA
14 - 21
FREDERIKKE
14 - 18
MADS STINA
FRI
21/02
MON TUE 18/02 19/02
12 - 17
11 - 21
12 - 18
14 - 18
10 - 18
14 - 18
12 - 17
12 - 17
10 - 18
THU 07/03
14 - 21
12 - 18
14 - 18
06/03
14 - 18
11 - 18
07 - 14
14 - 18
12 - 18
14 - 18
08 - 17
12 - 17
12 - 20
08 - 17
2 hours
2 hours
2 hours
CHRISTOFFER MARTIN WENDY
2 hours
2 hours
2 hours
2 hours
Holland
Holland
Holland
Holland
Holland
2 hours
15 - 18
2 hours
2 hours
27