Marketing Report by jess_lead

Entrepreneurial Marketing Elland Brewery Jessica Leadbitter C3496102 (2925) Words

Table of Contents 1. 2.

Executive summary.........................................................................................2 Introduction to Entrepreneurial Marketing...................................................3 2.1 Similarities and Differences........................................................................3 3. Alcohol Sales of Beer......................................................................................4 3.1 Micro Breweries..........................................................................................4 3.2 Total Market Share of Craft Beer and Ales..................................................4 4. Competitors......................................................................................................5 4.1 Larger Scale Competitors............................................................................5 4.2 Regional Competitors..................................................................................5 5. Customers........................................................................................................6 5.1 Current Market.............................................................................................6 5.2 New Potential Market..................................................................................6 6. Current Marketing Efforts...............................................................................7 7. Recommendations...........................................................................................8 7.1 Social Media................................................................................................8 7.2 Customers....................................................................................................8 8. New Line of Craft Beer....................................................................................9 8.1 Locality within the New Range....................................................................9 8.2 Packaging..................................................................................................10 8.3 Packaging Online......................................................................................10 Bibliography..........................................................................................................11 Appendices............................................................................................................12

1. Executive summary.   This report will look at defining entrepreneurial marketing and looking into a variation of entrepreneurial marketing methods. Secondly, it will discuss the differences and similarities between entrepreneurial and traditional marketing. Furthermore, this report will look into the alcohol sales of beer and ale, while evaluating the beer market advantages and disadvantages of brewing certain ale and beer products. Then evaluate the opportunities and challenges presented within the micro-brewery industry, while discussing the micro and macro environment of this market. Finally, this report will discuss Elland breweries current market, potential target market and their current marketing efforts. Finally discussing recommendations and marketing strategies put forward for existing products and potential new lines.

2. Introduction to entrepreneurial marketing.  Morris et al define Entrepreneurial marketing as the “proactive process of identification and exploitation of opportunities for acquiring and retaining profitable customers through innovative approaches to risk management, resource leveraging and value creation.” (Morris et al p.27)   Entrepreneurial marketing is considered an innovative way to market a product or service using unconventional marketing techniques. Often these techniques can be surprising and out of place which is what makes EM (entrepreneurial marketing) stand out from more traditional forms of marketing. Entrepreneurship involves being able to identify a gap in the market or an opportunity to create awareness and intrigue with a creative approach.    EM is often associated with small businesses, with limited resources to put into marketing, as entrepreneurial marketing tactics tend to be obtained on a small budget. Therefore, these methods can sometimes be perceived as shocking in order to achieve their full potential in gaining consumer attention. “It has been most frequently associated with marketing activities in firms which are small and resource constrained, and therefore rely on creative and often unsophisticated marketing tactics” (Morris et al 2002 p.4)

2.1 Similarities and differences.  Entrepreneurial marketing differs from traditional marketing. “In contrast to conventional marketing which seeks to achieve market dominance by exploiting economies of scale to sustain market stability, entrepreneurial marketing is concerned with innovation and new opportunities driven by the aim of creating imbalances that totally alter existing market dynamics. (Hills et al, 2010 p.19) Nonetheless, the two often work alongside each other. In comparison, traditional marketing tends to be done on a higher budget than (EM) and is often associated with big organisations that are able to fund the methods of traditional marketing.  Arguably conventional marketing on its own could not keep up with changing demands and obstacles in the marketing industry. “None of the individual marketing approaches present a framework comprehensive enough to guide marketing practice in the future.” (Morris et al 2002 p.2)

3. Alcohol sales of beer.  3.1 Micro-brewery.  The microbrewery market is expanding with a 16 percent growth from 2012/2015 in the UK (Statista 2015). Elland Brewery is a small microbrewery in Elland that has the capacity to produce 59 barrels of beer or ale per week, however, the brewery is only producing 45-50 barrels. The microbrewer market has been encouraged by the increasing popularity of the craft ale sector and variations of flavoured beers and beer culture. According to the HM Revenue and Customs, there has been a reduction in the duty for microbreweries which is why the market is growing (HMRC, Beer Duty 2018).

3.2 Total market share of craft beers and ales.  A study from Statista shows that the ale and craft beer market share is increasing year by year. In 2015, on-trade craft beer accounted for 8.4 percent of the total on-trade ale market, which is an increase of 1.7 percent from the previous year. The statistic also shows that the craft beer market accounts for 3.2 which is up by 0.7 percent from the previous year. (Statista, 2015). The market share of ale and craft beer is increasing in the UK beer market which has been in long-term decline (SIBA 2017, p.1), making craft beers and ales a profitable market.

3.3 Beer styles.  A report from SIBA shows that Golden ales are the most produced beer style with 87.6% of respondents saying they brew at least one, which is followed by stout/porter with 80.2% of respondents saying they brew this type of ale. (SIBA 2017 P.2) This statistic shows that a high percentage of alcohol that is being brewed in breweries are traditional ales. Elland Brewery has strong rooted brand values of providing traditional ales which the brewery maintains is produced to a high quality. This gives the brewery an advantage to meet the current demand for traditional ales.    A study from Statista shows that craft beer has experienced the most growth with an extra nine pints added compared to earlier years (Statista, 2016). The craft beer market is showing a lot of potential as it has seen the most growth. Incorporating a line of craft beers, would allow for a potentially new and growing target market.

4. Competitors.  Some of Elland Breweries major competition is from the likes of Vocation Brewery and Magic Rock Brewing. These competitors have a vast social media presence, which is crucial to entrepreneurial marketing and small businesses such as microbreweries. A study published in the Social Media Examiner surveyed 3,342 marketers and the results showed that 66% of small business owners strongly agreed that social media is important to their business (Stelzner, 2011).

4.1 Larger scale competitors.  There is competition for Elland Brewery on a larger scale as there are over 2000 breweries in the UK alone, the brewers market is one that is gaining popularity and becoming very competitive. The rising popularity of craft beers and ales has seen an increase in beer and ale producers. More than 300 breweries opened in 2016. Craft breweries are growing with many small breweries focused on expansion, in November 2017 Brixton Brewery saw a partial takeover with 49% of its brewery sold to Heineken (Mintel, 2017). Elland Brewery however unlike its competitors are not wanting to expand and take over.

4.2 Regional competitors.   Refer to Table 1, which shows the Number of new breweries opening in the United Kingdom in 2016 by the region. There was a total of 210 new breweries that opened in the UK during 2016. From the table, it is evident that Yorkshire has the highest number of new breweries opening in the UK. Elland Brewery is based in Yorkshire, with a lot of competition in that region.

5.Location.  The location of Elland Brewery is very important to the brand identity and also to the customer a report from Statista shows Statista 35% of people said they drink real ale as they like to drink ale that has been brewed locally (Statista,2016).

5.1 Regional identity.  A regional brand identity can demonstrate proudness of location that can identify with the consumer. As well as giving the brand some credibility when selling in and around the local area. "Packaging that strongly conveys the image/culture of a region, may serve to strengthen the identity and authenticity of the brand" (Underwood 2003p.6).   Furthermore, a regional identity differentiates the brand from other breweries and can also add value to the product this works well for Elland brewery as they want to get the best pound for their pints. "Regional branding also offers another means of product differentiation by providing a place of connection for the consumer, thus creating brand recognition and ultimately an added value" (Van Ittersum, 2001 p.3).

5. Customers.  5.1 Current market.  Elland Brewery has traditional ale roots and their current market is mature traditional ale drinkers. They currently supply their ales to Weatherspoon’s, however, one of the breweries goals is to move away from the wholesale market and selling for a cheaper price per pint. The company aim to a more premium price.    Elland Brewery’s main brand value is quality, which is a contributing factor to consumers buying alcohol. This statistic shows buying a premium quality product is one of the highest-ranking factors, with 22 percent rating it as important when buying alcoholic beverages (Statista, 2015).

5.2 New target market.  Although the traditional ale market is still in high demand, the increased popularity of craft beer among young people opens up a new potential market.  Craft beers and ales in recent years have become more popular, in 2016 in the UK there has been a shift in people’s beer preferences over the past two to three years, with 61% drinking more traditional ales and 47% drinking more British craft brewed beers (Statista, 2016).   There is a potential new market for Elland Brewery if they branch out into the craft beer market, reaching a different drinking demographic could have a lot of potential gain for the business. In a report from Mintel 34% of beer drinkers say they would be inclined to pay more for craft beers (Mintel, year). Aiming for the younger market with craft ales means they are likely to get the best pound for their pints.    Pubs and bars in and around Yorkshire could also be considered a new potential customer for the Brewery. A Statistic from Statista showing the distribution of on-trade alcohol consumption in the UK shows that on-trade beer consumption was at 54% in 2016. (Statista, 2016). The statistic shows that a high percentage of people still visit pubs on a weekly basis in the UK. Beer is also the number one choice of beverage which, in turn, means that there is potential in selling B2B.

7. Recommendations.  7.1 Social media.  A study from Statista shows that there are 2.46 billion social media users in 2017 (Statista, eMarketer). Therefore, the social media presence of Elland Brewery needs to improve to promote the new and current range. This will help make the brewery available online to a lot more customers and make the new target market more accessible. The brewery needs to adopt entrepreneurial marketing tactics in order to obtain the new target market, aiming for a younger market makes digital marketing crucial.  As previously established with the study published in the Social Media Examiner 66% of small business owners strongly agreed that social media is important to their business. (Stelzner, 2011).    Employing an individual with digital marketing skills will allow social media and the website to be updated daily. Social media also allows conversations between the organisation and the consumer, making it easier than ever to obtain customer opinions. Elland Brewery would benefit from using Facebook to promote themselves. A survey from Statista shows that in 2016 Facebook was the most popular social media site in terms of how many people have a profile on the platform. "Facebook's user share among social network users was between 95 and 97 percent"(Statista, 2016). Facebook would be the best sight to use to build awareness. Facebook also has a feature where users can rate a company and leave comments, this is good promotion for the business through word of mouth and could be used to gain customer feedback.

7.2 Customers As previously stated beer is the number one choice of beverage for people who visit pubs in the UK (Statista, 2016). Therefore, Elland Brewery would benefit from selling B2B on- trade to pubs and bars. A craft beer range would help the brewery get into some of the more restricted pubs and bars that are not looking for traditional ale but for creative, unique craft beer. With craft beers and ales becoming more popular with 47% of people drinking more British craft brewed beers (Statista, 2016).  In turn with a new line of craft beer it would also be beneficial to target a younger market. This could be achieved by bottling the new craft beer range and selling B2C.

6. Current marketing efforts.  The current marketing efforts of Elland Brewery are traditional forms of marketing. The business has 2 brewers and 3 salespeople who partake in direct selling. Which, involves going door to door with pubs to network and try and make sales. They also have a website which is designed well and easy to navigate.    In order to reach a new demographic, they must step away from the traditional forms of marketing. As the majority of young people are exposed to social media advertising daily. "In 2012, 92 percent of respondents aged between 16 and 24 reported that they had set up a social network profile. This share grew to 96 percent a year later. In 2015, 71 percent of UK respondents reported doing some kind of social media activity at least weekly" (Statista, 2015).   The brewery has a very poor social media presence, social media is ever more important for a business. A study from Statista shows that 31% of respondents spent on products in the £6-£20 bracket which had been recommended by contacts on social media sites in the UK. (Statista, 2016). This study shows that people are more engaging with digital marketing and businesses have to keep up with this demand through social media presence. Online presence is valuable for promotion the promotion of products and small businesses.

8.2 packaging   A collaboration with a local artist or illustrator may be useful to inspire some designs for the label of the beers. "The unifying label of craft beer helps to draw in consumers and establish industry practices" (Koziol, A. 2015 p.). The labels should include references to the street names and the regionality of the beers. 36% of beer drinkers are unsure what the term craft beer means (Mintel, 2017), therefore unique labelling of craft beers gives the product individuality and a narrative of the brewing process could be showcased on the back of the bottle.

8.3 Packaging online  The narrative from the bottle labelling of the brewing process can be carried over many platforms such as the website and social media pages, with videos and images. In order to appeal to a younger market, the use of the website and social media to do tutorials on how you can reuse the bottles and the labels through arts and crafts is a good way to show the organisation is giving back to the environment. For example, a tutorial on how to turn the labels into a collection of beer mats.   This would appeal to a younger market, as millennials are willing to pay more for sustainable products and would make the new range stand out from competitors. A study from Nielsen found that "despite the fact that Millennials are coming of age in one of the most difficult economic climates in the past 100 years, a recent Nielsen global online study found that they continue to be most willing to pay extra for sustainable offerings—almost threeout-of-four respondents in the latest findings, up from approximately half in 2014" (Nielsen, 2015).

Bibliography Bigat, 2012 Guerrilla advertisement and marketing p. 3-4   Deloitte Made to Order: The Rise of Mass Personalisation , n.d.   Available from: https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/consumer-business/ch-en-consumer-business-made-to-order-consumer-review.pdf  Elland Brewery, About us   Available from: https://www.ellandbrewery.co.uk/about-us/  Hills et al, 2010 p.19     Available from: Chaston. I, Entrepreneurial Marketing: Sustaining Growth in All Organisations 2016  p.19 Palegrave      HM Revenue and Customs (2018) Beer duty   Available from: https://www.gov.uk/guidance/beer-duty  Kotler, P. 1997, Marketing Management, Englewood Cliffs   Koziol, A. 2015, Crafting Beer, Crafting Community p.g.1   Magic Rock, Beers   Available from: https://www.magicrockbrewing.com/beer-category/collab/  Marketing: A construct for integrating emerging entrepreneurship and marketing  Perspectives. P.g 10  Marketing: A construct for integrating emerging entrepreneurship and marketing   Perspectives. P.g 4  Miller, D., Friesen, P. H. 1983 Innovation in Conservative and Entrepreneurial Firms, P.g 25     Morris et al (2002) Entrepreneurial Marketing, p.g. 27  Available at: http://journals.sagepub.com/doi/abs/10.1177/0266242610369743  Morris, M. H, Schindehutte, M., LaForge, R. W. (2002). Entrepreneurial   Morris, M. H, Schindehutte, M., LaForge, R. W. (2002). Entrepreneurial   Mintel (2017) Beer UK   Available from: http://academic.mintel.com.ezproxy.leedsbeckett.ac.uk/display/873531/  Mintel (2014) Beer Bounces Back: UK volume sales of beer predicted to rise for the first time in 5 years, but cider sales falling short  Available from: http://www.mintel.com/press-centre/food-and-drink/beer-bounces-back-uk-volume-sales-of-beer-predictedto-rise-for-the-first-time-in-5-years-but-cider-sales-falling-short

Mintel (2015) The Maret for craft beer  Availablefrom: http://academic.mintel.com.ezproxy.leedsbeckett.ac.uk/sinatra/oxygen_academic/display/ id=740069?highlight#hit1  Nielsen, Green Generation millennials say sustainability is a shopping priority, 2015   Available from: http://www.nielsen.com/uk/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html  SIBA, Written by Prof. Ignazio Cabras, Newcastle Business School, University of Northumbria in Newcastle, Commissioned and published by SIBA February 2017, British Beer: The report on the 2017 members survey of the society of independent brewers.  Statista, Society of Independent Brewers (2016) Beer styles in regular production with SIBA member brewers in the United Kingdom in 2016 (as percentage of members brewing).  Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/325855/beer-styles-in-regular-production-by-independent-brewers-united-kingdom-uk/  Statista, Brewers of Europe (2008) Number of active beer microbreweries in the United Kingdom (UK) from 2008 to 2016.   Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/447676/united-kingdom-uk-number-beer-microbreweries/  Statista, British Beer & Pub Association (2008) Distribution of on-trade alcohol consumption in the United Kingdom (UK) from 2008 to 2016, by type of drink. Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/308947/share-of-on-trade-alcoholconsumption-trend-in-united-kingdom-uk/  Statista, Bord Bia. n.d. When buying food and drink generally, which of the below would you be willing to pay more for?   Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/360317/willingness-to-pay-more-groceries-great-britain-by-generation/  Statista, Campaign for Real Ale. (2016) Number of new breweries opening in the United Kingdom (UK) in 2016, by region. Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/326010/number-of-new-breweriesby-region-united-kingdom-uk/  Statista, Campaign for Real Ale. (2012) Percentage growth in new breweries in the United Kingdom (UK) in 2012/13 and 2014/15   Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/326040/brewery-growth-in-theunited-kingdom-uk/.  Statista, Deloitte. (2015) Premium consumers prepared to pay for customized beers, wines and spirits in Great Britain as of 2015. Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/466138/premium-willing-to-pay-personalized-alcoholic-drinks-products-or-services-great-britain/

Statista, Ipsos. n.d. How often, if at all, do you have an alcoholic drink outside of your own or somebody else’s home?    Available from:https://www.statistacom.ezproxy.leedsbeckett.ac.uk/statistics/442032/consumption-alcohol-at-home-united-kingdom-uk/  Statista (n.d.) Real ale and craft beer sales in the UK                                                                  Available at: https://www-statista-com.ezproxy.leedsbeckett.ac.uk/study/23330/real-ale-and-craft-beerin-the-uk-statista-dossier/  Statista (2010) share of adults visiting the pub weekly in the UK between 2010 and 2017.           Available at: https://www-statista-com.ezproxy.leedsbeckett.ac.uk/study/22875/pubs-in-the-united-kingdom-uk-statista-dossier/  Statista (2010) Share of respondents who had set up their own social network profile in the United Kingdom (UK) from 2010 to 2016, by age*   Available from: https://www.statista.com/statistics/271879/social-network-profile-creation-in-the-ukby-age/  Statista, Social commerce in the UK (2014) Available from: https://www-statista-com.ezproxy.leedsbeckett.ac.uk/study/33555/social-commerce-in-the-united-kingdom-uk-statista-dossier/

Appendices

Table 1: Statista, Campaign for Real Ale. n.d. Number of new breweries opening in the United Kingdom (UK) in 2016, by region.    Available from https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/326010/number-of-newbreweries-by-region-united-kingdom-uk/

Table 2: Statista, how often, if at all, do you have an alcoholic drink outside of your own or somebody else’s home? N.d.   Available from: https://www-statista-com.ezproxy.leedsbeckett.ac.uk/statistics/442032/consumption-alcohol-at-home-united-kingdom-uk/