Category: Beer

The selected advert belongs to Schloss Eggenberg beer company and is used to advertise their Samichlaus Beer which is claimed to be the strongest in the world (Knobloch n.pag.). The ad has appeared in print outdoors, as well as in mens magazines and online top lists. Because the ad has appeared mainly in mens magazines, the target consumer is supposedly male. The extensive history of the company and the products they offer imply that this particular ad is targeted at beer connoisseurs just as well as persons who prefer stronger beer. The ad features Samichlaus beer in a whiskey shooter. The ad promises that Samichlaus is no worse than whiskey in terms of strength. The message concerning the exceptional qualities of Samichlaus beer is delivered using a fantasy idea of beer so strong it can only be drunk from whiskey shooters.

The ad is effective partially due to the media it appeared in. Magazines provide high quality color and help directly reach the target consumer, that is, beer lovers who are supposed to be male. On the other hand, outdoor location increases the ads visibility in certain routes, commute itineraries, etc. Internet versions of the ad might have a hard time squeezing through the clutter but the consumers reaction is easily measurable. Also, the message is delivered through a creative idea that is memorable (Kotler and Armstrong 464). The message is simple: Samichlaus beer is strong. The appeal that is used in the ad to deliver the message is meaningful and distinctive, and, although the idea of beer as strong as whiskey is hardly believable, it is leveraged in a creative way. Overall, the advert is executed in good taste and is easy to remember, which contributes to its effectiveness.

Works Cited

Knobloch, Rudiger. Eggenberger Schlossbrauerei: Strong Beer. Digital image. Advertolog. Lixil Graphics Ltd., n.d. Web.

Kotler, Philip, and Gary Armstrong. Principles of Marketing. 15th ed. Upper Saddle River, NJ: Prentice Hall, 2013. Print.

Executive summary

The report seeks to explore the market analysis, country analysis, and the foreign entry modes that can be applied by a company while entering in an international market. A company based in the UK has been experiencing problems associated with market share as the market has been saturated with beer products.

The brands that it would like to introduce in the new market are the sales of ales, stouts and bitters, low/no alcohol beers, premium lager, specialty beers and standard larger. However, because of the feared competition in the target country market, the report addresses low/no alcohol beers, premium lager, and specialty beers. These would be marketable in France the target market for the preference by French population to consume foreign beers with specialty beer being the leading product.

The report uses PESTEL analysis to analyses the France macro-environment forces as it assesses the possibility of launching its beer products. The market of the beer products is analysed using the available marketing mix in France, as well as the segmentation of the market, positioning of the products and the targeted market.

The findings are that the market is segmented on basis of age, while targeting the youth. The report unveils different foreign entry modes which are commonly applied. The modes are the licensing, the foreign direct investment, exporting and joint venture. The suitability of the entry modes are well represented and discussed with their respective advantages and disadvantages.

For the UK based company, exporting entry mode has been recorded for its numerous advantages. Based on the findings, the company has a better chance of entering the France market and gain a market share in the beverage beer industry.

Introduction

UK has been leading in the production of beer in Europe with a huge consumption. However, the consumption of beer has been reducing over the years as the population has been concentrating on health living. This has left the consumption of beer low as they have turned to the consumption of wine and low/no alcohol beers.

The country has been filled with many beer key players making the market become saturated. This has forced companies to seek foreign markets that have low beer production with the aim of utilizing the available market share.

On the other hand, France has been known for its production of fine and competitive wine for the longest time possible. However, there are few beer brewers in the market with the major breweries holding 90% of the market share. This has been more of monopoly for the companies.

Over the pasts few years the population of France especially the young generation has changed it consumption habits. The population however, has preference to imported beer to the locally manufactured and available beer. The commonly preferred beer is the specialty beer for its uniqueness and the application of different preparation techniques and flavours.

For the UK based company to enter the French market beer industry and gain a market share, it has to consider the country analysis, market analysis and the various foreign entry modes and choose the most adaptable and preferable. Both UK and France are members of the European Union (EU), so it could be easy to trade as they share almost same trading regulations and laws.

It is advantageous to transact as not currency exchange rates would be required as they both use the same currency the Euros as a medium of exchange. Lastly, members states of EU have free transaction of goods and services making it possible for the companies to trade.

Product information/facts

The company available beer brands are low/no alcohol beers, premium lager, and specialty beers in UK after its market has been saturated. Low/no alcohol beers are a beer brand that have low alcohol content and are neither harmful to health nor have any health related complications.

In the UK the law recognizes no alcohol beers as the one which is below 0.5% alcohol by volume (ABV). On the other hand, low alcohol has no more than 1.2% alcohol by content while that of France is below 3%, meaning the UK beer meets the standards of France. These kinds of beers are common in UK and the larger population is changing its alcohol consumption trends to usage of low/no alcohol beers.

The premium larger beer is the largely produced and consumed beer in France. However, the beer has been doing badly in UK as the market has become saturated although the lager makes 68% of the UK beer sales. The specialty beers are flavored kind of beer which has become common in the France as the younger generation is preferring specialty beer to the locally manufactured malty beers.

Because of its demand its production has increased over the years as well as its distribution to various markets. The techniques and the fermentables used in the manufacture of specialty beer are unusual. The wide range of the beers includes the spiced, herbed, smoked, and fruit flavoured beers. Because of their different flavours, they have become very common in Europe especially in France.

Analysis

Country information/facts

The preferred country for exporting the beer products from the UK is France which is also found in Europe and a member of the European Union. Based on the current GDP of $2.580 trillion (Bureau of European and Eurasian Affairs 2011), France is ranked fifth in the world in terms of economic growth.

However, the real GDP fell in 2008, but the economic growth picked in the end of the year. Generally, the economy of France has been fairing on well for the last quarter despite the financial crisis that have hit the world. France has a growing population that is characterized by skilled workforce.

With unemployment rate of 9.5%, venturing in the market would create jobs for the unemployed and increase its GDP. The country is ranked the second in terms of trading in the Western Europe (Bureau of European and Eurasian Affairs 2011). The country is known for its agricultural activities and is ranked the first in the European Union and the second in the world. It largely produces wheat, corn and barley which are used in the production of beer.

France is categorized as one of the leading consumers of beer products in the world although it is not a major brewer of beer in Europe. This forms a good market for the beer product because of the people desire to take beer. However, the country is the leading producer of wine making the beer market more open and available to foreign companies that would export beer to the country.

The countrys beer consumption is approximately half of the consumption in the Western Europe. Nonetheless the consumption of beer in Europe has been low although it depends on the weather of the country. The common usage kind of beer is lager which forms two thirds of the total consumption.

The population has moves away from using the local beer and preferring the specialty beers. These are the imported beers from other countries in the European Union which have been increasing over the years. This would make a perfect market to export beer products from UK to Germany because if the increased preference of imported beer over locally manufactured ones.

With a population of almost 60 million, the population consumes an annual approximate of 20 million hectoliters. The country has an annual beer consumption of 38.6 liters per capita.

According to Cohen (2008) past statistics have revealed that the European population is taking more beer than wine. For instance, a previous study carried shows that 25% of the respondents in France who are over 50 years have starts taking beer one a day (Cohen 2008). Other results from the same study indicated that 43% of the participants aged 14 to 29 years have developed the habit of consuming at least five drinks of beer per day.

The correlation between UK and France beer consumption is that UK drinkers have resulted to the consumption of wine although it is a beer making country. This offers the best chance for the UK based company to enter the French markets that have a changed preference and an age group that prefers beer to wine.

Macro environment forces considered

Before the launch the beer products in France several macro environment factors have to be considered that would govern the operation and the percentage of market share. The elements are based on the PESTEL analysis which determines international operations. They are political factors, environmental, social, technological, environmental and legal factors. Other factors based on the international entry analysis include the competition position in the country and the financial requirements.

Legal matters

These are regulatory laws that protect the competition with the aim of protecting the consumer and the market (Pride, Hughes& Kapoor2012, p.346). For the company to enter the market it has to consider the legal requirements needed for the establishment of a market of beer products in UK.

UK and France belong to the European Union leaning that they operate under almost similar laws governing beer regulations. However, the company should be aware of the legal restriction on the usage of beer in France. For instance, the French tobacco and law legislation also referred to as the Loi Evin prohibits the use of television to advertise alcoholic beverages either indirectly or directly.

The offense is punishable by the law which has a fine of an estimate of EUR 75 000 with either an addition of 50% amount used on the advert already banned. The legislation is aimed at checking the level of consuming alcohol in France. This may be a problem to the company as it has to devise optional methods of advertising its beer products. It will also be faced with a problem of reduced demand if the product does not catch the required market share in the short run period.

Social cultural factors

Social cultural factors are concerned with the beliefs, attitudes and the welfare of the people in the targeted market (Pride, Hughes& Kapoor2012, p.346). The demographic figures of the French population are changing with the number of the old people increasing more than the youths. However, this is not a hindrance in entering the international market as the youths of age groups 14 to 29 years are the ones who are taking beer compared to the population ages 50 and above.

The social cultural trend has the capacity of affecting the company in a positive way as the young preferences of beer to wine forms a basis of the market entry.

Also most of the French populations prefer taking alcohol at the comfort of their homes. This would encourage the company to come up with beer beverages that are portable and usable in the hone than in bars. The most negative social cultural aspect that can affect a company in France is the religious beliefs that French people as they are catholic and most are against consumption of beer.

Environmental factors

These are regulations that are concerned with the environmental conservation and management. Being in the 21st century it would be imperative to put into consideration the environmental factors so as to remain relevant in the market. For instance, France has environmental regulation that requires the usage of environmentally friendly methods of manufacturing the beer. Or it could have the packaging of the beer in environmentally friendly packaging to avoid bans or fines from the French government.

Technological

Both the UK and French have undergone technological revolution that has shaped their different markets. Based on this the company would be having a competitive edge as its manufacturing techniques are compliant to the targeted international market.

With the people well versed with technology and e-commerce it would be possible to sell the products under the sane platform thus making France the country of choice of the saturated beer brands. With an already existing market and technology it would be easy as the company would enjoy economies of scale. This would reduce the costs required in entering the French beer market.

Economic factors

These are factors that are determined by the economic forces in the market industry. They include inflation, economic growth rate, interest rates, inflation, taxation changes, and exchange rates. These economic factors may have impact on the decision to be taken by a company.

For example, if the interest rates are higher then investments may be low because of high costs of borrowing. If the growth rate is high then the demand of the products of the firm is raised too. A country with high inflations rates may force the firm to pay high wages to the employees increasing its production cost.

And lastly a strong currency hinders exports because of products high prices in the foreign market. However, since the countries uses euro as a medium of exchange, it would be advantageous to the company. However, it would under go taxation as the law requires imported alcohol products to be licensed even if the country is a EU member state.

Political factors

These are factors that are influenced by the government through the initiation of different policies. They may include incentives and subsidies that the government may be wiling to offer to the firms (Pride, Hughes& Kapoor2012, p.346). The priority in implementing these is crucial to firm.

They have impacts on areas of infrastructure, quality of the goods produced as well as the health of its people. They can also have impact on the education. Examples include the provision of a transport infrastructure to the firms or regulating the prices of some goods. For example, being under the EU and using the euro it would be advantageous for the company because there are exchange rate restriction and taxation policies because the markets have been opened.

This will also allow free movement of goods from UK to France without taxation which is an advantage to the company. The company will also enjoy tax exemptions because it is a qualified member of the European Union.

France beer Market information

The market is saturated with wine products as France is known for the production of fine wine brands. However, the country produces beer with premium lager having a market share of two thirds. Although the country is known for its alcohol consumptions, the population that is taking alcohol has been declining because of the changes in their life styles. Wine being integral part in the culture of French people, has brought a tremendous change as many people have shunned from alcohol to other beer products.

There has been a decline in the consumption of beer in France from 21.43% to 19.73%million hectoliters as reported in last year (Business Beer.2011). It is assumed that the market for beer has reached its plateau because of the changing beer consumption trends and lifestyles. However, beer turnover has been high because of the increased preference to specialty beers which are mainly imported.

The market share for specialty beer increased by 5.4% to amount to 33.3% in 2009 (Business Beer 2011) with speculations that the trends are bound to increase by 2011. In contrary, conventional beers have been reducing in terms of market shares as they lost 5.3& of the market share in 2009 although the consumer level has not reduced by much. Some reports show that there was a similar decline 30years ago when the consumption dropped to by more than 30%.

Marketing mix

The marketing mix consists of the 4ps used in the marketing which according to Kurtz, Mackenzie and Snow (2009, p.424) are price, promotion, place and product.

Product

The common beer products found in France are Kronenbourg, Grand Cru which has 6% ABV and Kronenbourg Blanc which is a spicy favoured beer (Beers.co.uk 2009). Desperados is another beer found in France which has a 5% above alcohol average, and the Kronenbourg 1664 which is the common and is preferred more than any other lager for its malty taste. Bieres du garde is another beer product has a bittersweet finish and ABV of 8.5% another beer product is the ChTi beeers (Beers.co.uk 2009).

Price

The prices of the French beer products vary from one location to another. They are customer friendly and affordable which are some of the aspects considered in the pricing of a commodity. However, some of the beers are more expensive than the others because of the targeted customers base and the type of brands. Nonetheless, they have been able to capture their own market share in the market.

Promotion

Advertisement of beer in UK is prohibited meaning that it is punishable by the law. This means that beer products are advertised through other channels and mediums. As part of the European Union treaty, the advertisement of alcohol should not encourage its excessive drinking. The Loi Evin bans TV alcoholic beverages advertisements that are over 1.2% ABV (Institute of Alcohol Studies 2010, p.12). The law also prohibits the advertisement of alcoholic drinks in cinema. Involvement of companies in sponsoring cultural events and sports is prohibited. The same applies to radio advertisement where it is prohibited between 5pm and midnight (Institute of Alcohol Studies 2010, p.12). Alcohol advertisement towards minors is also prohibited, however, advertisement is only allowed when the characteristics of the products are being used.

Place/Distribution

Beer in farce is distributed through established channels that ensure that the products reach the targeted market in time. Most of popular place where beer is concentrated is the Nord-Pas de Calais which is close to Belgium (Beer co.uk 2009). The beers produced in France are similar to the ones found in Belgium hence its location.

The place is characterized by young stars who prefer beer to wine. Other than being concentrated in the small town, beer products are strategically in supermarkets. There are also numerous pubs, taverns, bars, and restaurants where beer products are sold to the targeted customers especially the youth.

Therefore, any company that tries to enter the French market need to comply the marketing mix of France as it gives the guidelines. Any company that does not comply with the governing marketing mix has the possibility of acquiring a low market share.

Segmentation

The beer products in France are classified as follows Kronenbourg, Grand Cru, Kronenbourg Blanc, Kronenbourg 1664, desperados, and the Bieres du garde. Market segmentation involves the process of clustering the people who share similar needs or characteristics (Botha, Strydom & Brink 2004, p.61).

The segments which are homogenous groups respond differently to advertisements, promotions, and communications among other variables of the marketing mix. The common and prevalent segmentation of beer is based on the age group. The young generation of between 19 and 29 prefer beer more to wine.

Targeting

Based on the available data of the French beer industry, the old are targeted through the use of low/no alcohol beer. The other targeted group is the youth below 29 years generation because of its preference to beer to wine. This has been necessitated by the changing lifestyles and ways of living among the youth.

Differentiation is used to target the different segmented groups in the France. This is supported by Havalder (2005, p.93) who note that differentiation is used to communicate the different segmented markets with the products in the market.

Positioning

Product positioning describes the way consumers perceive particular products in the market (Botha, Strydom & Brink 2010, 61). The beer products of France are well placed at par. This is because they are considered as better and the market is 90% controlled by the major breweries. The reason why the French beers are well placed in the whole Europe is because of their better quality than all other areas (Beers co.uk 2009).

Market entry modes

There are various foreign market entry modes that a company can successfully apply to entry in a new market and gain a market share. The common entry mode that can be applied when entering the French beer industry are, exporting, sole venture, joint venture and licensing. Before entering in a French market there is need to assess some of the factors that would limit the success of the product in the new market.

Exporting

This is one of the popular methods of entering a foreign market. It involves the transport of the fully or partially finished products to the targeted market. France has been an importer of beer products since most people prefer the specialty beers to locally manufactured beers. One of the reasons why export is used is on when trade barriers have been lifted or reduced (McDonald, Burton & Dowling 209). Through the diversification of markets, the mode can be applied to minimise risk.

A UK based company can export its beer products to France at less cost because of the reduced taxes as they both belong to the European Union. With differentiated goods which are patented, a company can easily use export entry as it has the likelihood of enhancing market share over the already existing products. A company can enter a foreign market either through the direct branch, direct agent, or indirect entry in the market (John & Gilles 1998, p.262).

The reason why export is a favourable entry mode is because it requires fewer investments as production is done in the home country. The only costs incurred are the marketing expenses. However, coordination between the government, exporter, transporter and importer is required for its success.

Licensing

This entry mode requires the use of license that permits another company that is located in the targeted country. For instance, the company can permit a France based company to sell beer products on its behalf. The difference between licensing and franchising is that the latter adopts the name of the company with the products. However, the licensed company uses the patented product without any modification whatsoever after paying an agreed fee.

This type of contractual entry mode is applicable to patented products. This type of market entry attracts large risks of investments. The drawback of using licensing as an entry mode in a foreign market is that the company loses direct control on industrial property, quality and manufacture (John & Gillies 1998, p. 265).

Joint Venture

The company comes into partnership with an already existing company in the target country market. For instance, the UK based company would partner with Fischer brewery which produces Desperados and form a partnership with same market share. This increase the chances of getting large market share as the company is perceived as an insider.

The objectives achieved through joint venture is to gain market entry, develop a product jointly, conform to any existing laws and regulations on foreign investors, share technology, and share rewards and risks involved in the venture. The benefits associated with joint venture are that a company can access the already existing distribution channels and be politically connected.

This mode of entry mode is favourable when combination of the market power, the size of partners and pooled resources are less in line with the targeted industry leaders. It is also important when learning is required or the companies share the same goals, ideas and skills.

However, this mode of market entry is riskier than all the others as ownership, pricing, technology applied, and control of the ownership is predetermined. It is advisable to put these aspects into consideration before entering into a joint venture.

Foreign Direct Investment

A foreign company places its company directly in the targeted country. For example, the company would establish a beer manufacturing company in France and operate from there. Resources both financial and human capitals are then transferred to the target market (Sharan 2003, p.45).

There are several ways that can be applied on FDI like acquiring an already existing entity or putting a new enterprise. In this mode, the foreign company in the target company has the highest capacity of controlling the operations and management of the company. The chances of knowing the competitive environment, key players, and existing consumers is very high. The drawbacks of using this form of foreign entry mode are that it requires a lot of commitment, resources and capital to venture into.

Comparison of the four modes of entry

Recommendation (market entry mode)

Based on the market analysis of France and the regulations of UK, the most recommended mode of entry to the France market would be through exports. The company would export the explained beer products to France because it is more cheap, less risk and convenient to export the products. Based on the advantages given and the suitability conditions of exporting then the company would adopt exports to the other entry modes.

The countries are both located in Europe and are members of the European Union/ community. When exporting commodities from UK to a country which is a member of the European Community, the exports can circulate freely without the payment of some taxes although they are subjected to VAT. The products being exported to UK have alcohol content which is below 30 percent meaning that they are exempted from duty stamp.

This implies that duty stamp would not be paid on the beer products exported to France. France has a well established market, according to john and Gillies (1998, P.66) exports can be applied where there is high break even, has likelihood of achieving economies of scale, greater resources are committed, and large volumes are to be sold then direct export can be applied.

This favours the company as the France market size is large and has the potential of growing further as people trends of beer consumption are changing. Also export is applied where the home market has become saturated with its products.

Conclusion

Market analysis and country analysis are important tasks that need to be carried before venturing a foreign market. The most suitable country and market that the UK based company can easily access and gain its market share is the France. This is because the population has changed their wine consumption trends to beer consumption with the youth being the largest consumer. The market is also centrally placed as it lies in Europe and is a member of the European Union.

This gives the company the opportunity of trading freely in the region with less reduced taxation and regulations. From the market analysis, it has been concluded that the French market has a ready target population, well segmented and positioned. In France, the TV cannot be used to advertise and promotions cannot be carried through sponsoring of games and other events.

There is a generation that is getting away from the usage of wine to the usage of beer. Specialty beer which is largely imported is the commonly preferred beer brand in France. This has been necessitated by the different flavours it has and its unique technique of fermenting.

The commonly used foreign entry modes are the exporting, joint venture, licensing, and foreign direct investment. Based on the report analysis the export entry mode is more preferred for the UK based company to adopt. This recommendation has been based on the market analysis and the UK market operations and regulations.

Reference List

Beers.co.uk. 2009, French Beers. Web.

Bureau of European and Eurasian Affairs. 2011, Background Note: France. Web.

Business Beer. 2011, France: Beer consumption declines by 1.7% in 2010. Web.

Bothat, J., Strydom, J. & Brink, A. 2004, Introduction to marketing, Juta, Cape Town.

Cohen, A. 2008, Europes Changing Drinking Habits: More Beer, Less Wine, Few Regrets. Web.

Havaldar, K. K. 2005, Industrial marketing: text and cases, Tata McGraw-Hill, New Delhi.

Institute of Alcohol Studies. 2010. Alcohol and advertising. Web.

John, R. & Gillie. A. M. 1998, Global business strategy, Thomson, London.

McDonald, F. & Burton, F. 2002, International business, Thomson Learning, London.

Pride, W. M., Hughes, R. J., & Kapoor, J. R. 2012, Business, South-Western/Cengage Learning, Mason, OH.

Sharan, V. 2003, international business: Concepts, environment and strategy, New Delhi, Pearson education India. Appendices

Executive Summary

Over the recent past, the market for beer has been characterized by a very high level of competition among various breweries. In order to be successful in such a market, it is advisable for an organization to expand its market globally. This report gives an analysis of the Australian market as a domestic market and of UK beer market as the foreign one.

The beer market in Australia has been saturated over the recent past. It is therefore necessary to consider expansion of the market by venturing into the UK beer market. This discussion gives a clear analysis of both markets. This analysis provides a good base on which the entry decisions are built upon.

It is revealed that the amount of beer consumption in both markets has been declining over the time. However, the market share for the imported beer has been rising in the UK beer market over the past. Finally, several recommendations have been proposed based on the findings.

Country and Market Analysis

In the contemporary world, the market has become highly competitive. This has been triggered by the increased entry of new players in the market. This has led to saturation of the domestic market. As the market becomes saturated, the level of competition reaches its maximum. This has threatened the performance of many organizations as this tends to increase the total costs and reduce the total sales. This characterizes almost every product in the market.

In Australian market, the beer market has grown highly competitive from the saturation of the market over the recent past. This has been as a result of entry of many players in the industry as well as the rapid expansion of the already existing organizations. In the Australian market, beer market consists of sales of products like stouts, ales and bitters, low or no alcohol, standard lager, premium lager, and specialty beers (National Library of Australia 78). Currently, the market has been saturated with these products.

The Australian market for beer can be traced far back in nineteenth century. From then, the beer market has grown rapidly. A number of breweries registered their individual trade marks for their various packaged beer. During the time the markets was expanding at a very high rate and at same time the demand was increasing rapidly and the existing brands were not efficient. The per capita consumption was growing rapidly by then (Jones par 3).

According to Jones and Morgan, more than a dozen breweries in Australia were operating in unchallenged and secure regional markets (163). In fact, each of the state in Australia was having about one to three monopolies. During the period, there were very low chances for entry.

These restrictions were mostly emanating from the high fixed costs that were required in order for an organization to enjoy the economies of scale (Baker, Graham and Harker 64). Since it required a significantly large amount of capital, only a few organizations managed to venture into the industry. Because the demand was increasing by then, the level of competition remained very low. Each organization enjoyed its competition-free regional markets.

In the year 1967, a new brewery by the name Courage entered into the Australian market. Although most of the companys shareholders were located at the United Kingdom, its entry had a significant impact in the Australian market. It triggered change in the brewing industry.

Before the companys entry, most domestic companies were more concerned only about minimizing their operational costs and advancing their technological infrastructure. None of the companies was more concerned about building their brands since competition level was very low.

Soon after its entry to the Australian market, Courage introduced a range of beers in the make (Jones 162). This posed a danger to the domestic companies that have for long been enjoying non competitive market. In reaction to this, various companies in the country took various decisions.

For instance, CUB decided to take control over the distribution channels. It managed to take control of these channels by increasing the total number of managed and tied houses. Despite of such restrictions, the level of competition in the Australian market began to increase significantly.

In this period when the Australian organizations were more concerned about the total costs of production rather than the brands, the marketing expenditures in various organizations were very limited (Wenner 47). The mostly used means of advertisement during that period was through bill boards (IbisWorld par 36).

The press was rarely used in advertisement. This was because organizations aimed at retaining minimum level of expenditure on advertisement. Advertisements for beers, wines and spirits in the Australian press took up a smaller percentage of advertising space than their share of advertising expenditure in the UK press at about the same date (Jones and Morgan 164).

Later, many organizations in Australia recognized the need for advertising its product in order to maximize its sales. For instance, the newly elected leaders of the CUBs beers recognized the need to have an effective marketing strategy in order to compete with Courage. In order to achieve this, CUB launched a marketing campaign with an aim of increasing its sales and building its brand loyalty for its draught beers (Euromonitor international Australia par 13).

During this period, the combination of the residents who were born in Australia and the increasingly rising number of the in-bound tourists as well as the free advertising services by the cult magazine in 1960s gave Fosters a niche market (Kingham par 6). This was characterized by a new and unexpected group of consumers.

Over the past, the Australian beer has been internationally exported to other countries. For instance, a significant amount of the Australian beer was marketed to the United Kingdom. However, the fraction increased with time. For example, the Australian beer exports increased from 165, 0000 litres in 1960 to 179, 000 after ten years (Jones 168).

Over the past, beer has recorded a 3% value increase. This increase can be attributed to the economic recovery that has been taking place in the country. For instance, the value reached A$ 14. In the Australian market, lager is the best performing among other types of beer.

It has remained dominant in the Australian market up to the present where it has recorded a fraction of 85% of the total volume of sales in the country in the year 2010. The main competitors in the market are Foster and Lioon Nathan. The two has strong brands that have been successfully built. In the year 2010, the two accounted for 91% of the total volume of beer in Australia (IbisWorld par 3).

Pattern of Beer Consumption in the Australian Market

There are several factors that have been influencing the consumer choice in the Australian market for beer. Some of these factors such as the lifestyle, international production, among other factors has been significantly influencing the Australian market. The recent statistics indicates that there has been stagnant or marginally less per capita in beer.

In the Australian market, beer consumption has been declining since 1970s. Before then, Australians were ranked among the top beer consumers. For instance, they were ranked as number three top beer consumers in the world during the time (Dealfish par 4). Currently, the Australians cannot even be ranked among the top ten because the level of consumption has significantly reduced.

According to the statistics released in the year 2010, the per capita beer consumption was 4.5 litres per year (The immigration Agency par 6). This was the lowest level of per capital consumption since 1950s. This is a significant drop bearing in mind the fact that it has been reaching up to 6.4 per capita.

Analysis of UKS Market for Beer

Marketing plays a major role in determining the success of a certain brand in the UK beer market. The most successful brands are the ones with the most effective marketing process. It is necessary for an organization to make more people take its product in order to maximize the level of sales in such a competitive market.

Just like in the case with the Australian market, the beer consumption in UKs market is decreasing; beer consumption in homes, pubs and bars is declining according to the recent statistics (Sibun par 6). It is also important to note that booze regulations are becoming tighter and therefore making it a bit difficult in marketing beer in the UKs market. According to the report released in 2009, there is also an increase in the misuse of alcohol. This again poses another complication in the UKs beer market.

It was projected that the level of sales in the market will decline over the time. For instance, projections have it that there will be a decline in sales by 2.5 percent in UKs sales of cider, beer and flavoured alcoholic drinks between 2008 and 2013 (Business Wire par 5). Again this is the highest fall in the beer sales in the UK market over the past.

Beer consumption patterns are changing dramatically in the UK. For instance, most of the people prefer taking the beer in their homes. This led to a rise in the off sales by about 2.6 % between 2003 and 2008 (Stokes and Lomax 32). On the other hand, on trade sales fell by 2.7% within the same period.

The level of competition is also very high in the UK. Each of the company is taking all the possible measures to maximize its sales. For instance, Molson Coors intends to become one of the top four largest brewers in the world by the year 2012 (Mayer 35). Other companies have also set their goals all of which are determined by the level of sales. This will significantly increase the level of competition in the country as the brewers crumble for the diminishing level of consumers.

Beer is heavily taxed in the United Kingdom. It is also projected that there will be a drastic increase in the amount of excise in the near future. For instance, Molson Coors made a profit of $60m in 2009 while it paid a total of $600m as tax and excise to the government (Handley par 30). This clearly indicates that the government is taxing excessively on beer. This has led to shrinking of the profit margins.

Essential UK Beer Statistics

The recent statistics on UK beer market has revealed a unique pattern. It has revealed a changing consumption patterns among the people. Statistics has revealed a decline trend in Britains indigenous beer styles and relentless growth of lager (Sutton 12).

Majority of the people have shifted from ale to lager culture over the time. Since the year 1978 and 1998, there was a significant change in the proportions of the amount of ale and lager consumed during this period. That is, the proportion of lager to ale consumed during this period changed from 27:73 to 60:40 (British Beer and Pub Association par 12). This reveals how the consumption patterns have changed over the past. The fraction of Cast conditioned ale continued to fall to less than 10 % of the UK beer production.

Statistics on UK beer consumption has also revealed that there are some beer types whose consumption has been decreasing over time. For instance, the consumption for ale has significantly decreased. On the other hand, the consumption for lager has been increasing over time. Therefore, it is not advisable to introduce ales in the UK market where consumption levels have been falling with time. However, it will be easier to market lager because it has recorded a recommendable growth over time.

As already noted, beer consumption in the UK has been fluctuating over time. However, beer consumption reached its maximum in 1979 when a total of 69.5 litres were consumed in the UK (British Beer and Pub Association par 5). Unfortunately, the consumption has significantly decreased over the past. For instance, the current level of consumption is below 60 million hectolitres. This is one of the major threats to most of the brewers in the UK.

Recent statistics have also revealed that there is excess production capacity in the UK. Again, this has threatened the success of breweries since the consumption levels has been falling with time.

However, there has been an increase in the market share of the imported beer. It is therefore expected that there will be a rise in the amount of beer exported from the UK in the future in an effort to expand the global market share (Hornsey 54). Over the past, beer exports levels from UK have remained very low. However, this has been increasing over the recent past. Currently, more than 3 million hectolitres of beer are exported from the UK.

Over the last 40 years, the total number of pubs has significantly increased in UK. This is despite the fact that the level of consumption has been declining within the same period. Again, this reflects an increasing level of competition at the retail level in the market.

Analysis of Facts Gathered

The above discussion has revealed several facts about the UK beer market. This information is of great importance in making appropriate decisions on the best way to venture into the market.

From the above facts, there are a number of advantages in venturing into the UKS beer market. To start with, an organization will be able to expand its market networks globally. Although the level of competition is also high, it is easier to build a brand loyalty and therefore increase the total level of sales (Dinkhoff 56). People here have varying tastes and therefore it will be very easy to build a brand name.

Despite these advantages of marketing beer in the UK, there are also a number of complications associated with the market. For instance, it has been revealed that the levels of beer consumption will decline with time. This indicates that the level of competition is likely to increase significantly.

This is more so bearing in mind the fact that more organizations are venturing into the market, now and then. Therefore, there is a likelihood of recording a declining level of sales with time in such a market. This threatens the performance of an organization in the global market.

It is also clear that there is need for intensive advertisement efforts in the UKs market in order to market a certain brand. Advertisement is more critical in marketing beer in UK compared to the Australian market. This implies that an organization will be forced to incur extra advertisement costs in the UK market. This increases the operational costs hence reducing the profit margins. Again, this poses a great danger for a new entrant.

This analysis has also revealed that beer consumption patterns have also changed significantly in the UK. This has a significant implication in marketing strategies. For instance, off shop sales have been increasing over the past while the on sales have been decreasing (Vaughan 68). Therefore, it will be more effective to focus on the fast moving consumption goods in order to make their respective brands to look more attractive.

Majority of the pubs in the UK has applied a wide variety of measures in order to attract a significant number of customers. Many brewers are focusing on adding sense of occasion in the venues in order to attract more people (Anonymous par 9). In connection to this, more live music in the pubs has been one of the major strategies that have been applied in an effort to increase the level of sales.

Over the past, most brewers in the UK have been focusing on the young drinkers only. This is mostly the age between 18 And 34 years of age. Many brewers are now devoted to encourage drinking in the older people in order to increase the level of sales. A number of organizations have also been trying to come up with flavoured beer in order to attract female drinkers (Nwankwo and Gbadamosi 148).

This is aimed at increasing the level of sales. Many organizations have managed to achieve this through developing and building new brands hence maximizing the level of its sales. This has forced the brewers to redefine their market segments in order to cater for these groups.

In most cases, marketing of beer in the global markets becomes complicated because it is banned in some areas. For instance, advertising of alcohol in television and cinema is banned in France (Handley par 8). This is because of the increasing number of alcoholism among the teenagers. Therefore, brewers are forced to apply only a restricted marketing mix. This poses a major problem because advertising plays a pivotal role in educating, persuading, and entertaining people.

Another major problem with the UK market is the fact that there is a very high level of taxation. The excise is also highly exaggerated. This makes it expensive to operate in such an environment. For instance, the government takes more than six times the total profit enjoyed by the breweries.

Statistics indicates that the level of consumption in the Australian market has been decreasing since 1970s. On the other hand, many organizations have been struggling to increase the level of production and sales. Meanwhile, other companies from other countries have been introducing their brands in the already saturated market.

Therefore, for any organization to remain in the market there is need to come up with the necessary marketing decisions (Shaw and Mazur 125). As the Australian market is already saturated, the best option is to market the products in the international market. This will help an organization in expanding its level of sales by expanding its market networks in the international trade.

Analysis of the Findings

Assessment and Selection of Entry Strategies

Before venturing into the foreign market, it is important to analyze various methods of entry. This should be determined by the nature of the new market. It is important to choose the entry mode that is most feasible with the new market.

The success and the ability of an organization to adapt fast in the new environment will largely be determined by the feasibility of the entry mode. Each of the entry method is suitable in certain circumstances. There are several modes of entry through which an organization can venture into a new market.

Joint Venture

Joint Venture is a very common method that has been applied by a number of organizations in their effort to venture into an overseas market. In this form of entry, two businesses combine their resources to sell their goods and services in a foreign market (Tielmann 65). Joint ventures are very common in the countries where the economy is tightly controlled. In such economies, an organization may be forced to partner with the foreign companies in the target market in order to be able to sell its products to the residents.

The main advantage with this method lies on the fact that an organization is able to partner with a company that is experienced in the foreign market. This makes it easier and cheaper to market the product in the new market.

Joint ventures also suffer a number of limitations. To start with, these partnerships may be very difficult to manage. This is because they are mostly formed by two companies with varying cultural backgrounds whose management may differ significantly. Therefore, these differences may make it difficult to manage such partnerships. Another shortcoming of this method is that the partners are supposed to share the profits. This reduces the share received by every company. This leads to shrinking of the profit margins.

Joint ventures are most favourable to the markets where there are import barriers. By joining a foreign company in the target market, an organization is able to overcome the barriers posed on imports in the target markets. This method is also suitable in situations where there is large cultural distance. In such a case, joint venture becomes more suitable.

The local companies can also provide the necessary resources, distribution networks, and skills that are necessary in any market. An organization is also able to get a brand name whose loyalty has already been developed in the target market. This significantly increases the level of sales in the new market.

Licensing

Licensing is also another common method of foreign market that has been widely used. In this case, an organization signs contracts with the foreign businesses (Lymbersky 38). This allows the overseas companies to manufacture and also sell the companys products in the target market.

Through licensing, a company is allowed to use the property of the licensor. However, most of the property is usually in intangible form. These include the property rights and patents, trademarks and certain technological production techniques (Ireland, Hitt and Hoskisson 175).

The main advantage associated with this method is that it has the potential of yielding very high levels of returns on investment. Therefore, this method has a promising good returns on the investments made. This method also opens the door for a low risk manufacturing environment in the foreign country.

Licensing as a method of entry into a new market is mostly situated in the target market where an organization does not have the ability of becoming a competitor. It is also suitable in circumstances where the level of sales is expected to be very low. It can also be helpful where there are significant cultural differences.

Exporting

Exporting is one of the oldest methods that have been applied while venturing into the foreign markets. In this case, exporting implies the process of marketing of the goods produced in one country into another.

This implies that the goods to be exported should be manufactured in the domestic country before they are marketed in the foreign country (Wolfe par 6). In this case, an organization is required to make a significant investment on marketing in order to sell its brands. There is therefore need to have a detailed marketing strategy.

There are several advantages associated with this method. To start with, the manufacturing process is home based; a thing that helps in minimizing the level of risks. This method also gives an organization a chance to learn more about the foreign market before making critical investment decisions. This method therefore is very useful in situations where an organization is not very sure about the nature of the foreign market.

In such circumstances, an organization can get a chance to survey and identify possible risks in a certain foreign market. This will play a pivotal role in making the final investment decisions. This method reduces the potential risks of operating overseas (FAO Corporate Document Repository par 8).

This method suffers from the disadvantage that one can be at the mercy of the foreign agents (Klug 34). Therefore, the exporter may lose all the control that makes them prone to exploitation. This method is most favourable in certain set of conditions. For instance, this method is very important in market environments where there are high political risks.

Through export, an organization is able to overcome the risks that are political based. This method is also suitable in situations where there is limited number of sales in the foreign country. In such circumstances, it is advisable to carry out the manufacturing processes within an organization and then sell the finished products in the foreign market (Decker and Zhao 190). This will help in saving on the unnecessary investments where there is no high demand for the service.

This method will also be favourable in situations where there are extremely high production costs in the target countries. For instance, labour in China is cheaper compared with countries like the United States. In such a case, it may be advisable for an organization to consider exporting in order to minimize operational costs.

Internet

In the contemporary business world, the use of the internet has intensified. An organization can use internet while venturing into a new market. Through the internet, an organization is able to access all different types of customers from all over the world. An organization can therefore easily target the foreign customers through the internet. In this case, an organization does all the production operations in their home countries.

These products are then transported to the foreign countries where they are sold to the customers. Clients order the products they want after which it is delivered. Since an organization contacts their customers directly online, there is no need for any contact with the local businesses (QuickMBA par 3).

The main advantage with this mode of entry is that it is usually inexpensive. The only major costs incurred in this case are the website and the marketing costs. This method is therefore cost effective as there are minimal expenses.

However, this method of entry suffers from the fact that an organization does not have physical presence in the foreign market. Physical presence of an organization in the foreign market is better than marketing and selling products online.

Purchasing Foreign Assets

This is the mode of entry where an organization invests in a foreign company. However, this may be more expensive since it requires huge amount of capital. The advantage of this method is that an organization can enjoy the profits of an overseas company, which has already developed with a strongly built brand.

Discussion and Recommendations

The above analysis has given the description of various methods that can be applicable in venturing into a new market. The discussions have clearly shown that each of the above methods has its own advantages and advantages. Some are more suitable in certain situations than others. It is therefore necessary to be careful when choosing the entry method. This discussion has provided vital information that is important in making various decisions in an organization.

To start with, it is necessary to consider venturing into the global market as a way of increasing the total sales. This is due to the fact that the domestic market has reached its saturation point. The only alternative is therefore to venture into the global market in order to expand the market. However, it is necessary to choose the entry method appropriately in order to achieve the best results.

From the above analysis, UKs beer market is already highly competitive. The supply is high while the demand has been falling with time. Therefore, it may be risky to venture into such a market independently. Consequently, the most suitable method to venture into the market is through a joint venture.

In this case, the organization will be able to reap from an already established brand name. Moreover, an organization will be able to maximize the sales since it can enjoy the established market networks. It will be also easy to overcome the import barrier in the UK beer market.

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Executive Summary

Tsingtaos entry to the Thai market requires a robust project management approach. The project scope includes construction of a beer brewery, and establishing a value chain in Thailand. The technical requirements for the project include the construction of a brewery that can produce three million bottles of liquor monthly.

The systems needed for the success of the project includes a change management system, and Project Management Office (PMO), and a risk management system. The project manager is a senior vice president of Tsingtao Beer. The project management team reports directly to the board. The main risks associated with the project arise from Tsingtaos limited understanding of the business environment in Thailand.

Tsingtao Beer Project Plan

The Tsingtao Beer company is in the process of expanding its overseas operations to create new markets for its products. This document examines various aspects of the project plan developed to ensure the success of the new venture. The issues covered in this plan range from the work breakdown structure to project management tools and approaches used in the project.

Scale and Scope of Project

This project relates to the construction of the facilities for use in beer production in Thailand. A business development team from Tsingtaos headquarters in Beijing will handle the commercial aspects of the project. The project objectives are as follows.

Project Objectives

The three objectives of this project are as follows.

1. The first objective of the project is to construct an operational brewery in Thailand with the capacity to handle the demands of Thai Consumers as well as to provide products for distribution in nearby markets.
2. The second objective of the project is to make preliminary business plans for the operations of the brewery.

Major Deliverables

Based on these objectives the list below provides the project deliverables associated with the project.

1. A fully functional beer brewery in Bangkok
2. Signed service and maintenance contracts with suppliers
3. Product supply contracts with rice farmers
4. A marketing strategy
5. Licenses, permits and regulatory approvals necessary for brewing operations in Thailand

Milestones

Table 1 below presents the milestones associated with the project

Table 1: Milestones and Related Indicators

Technical Requirements

The technical requirements for this project are as follows. First, the project should deliver a brewery with a production capacity of three million bottles per month.

The brewery should have the capacity to store up to three months supply of rice to avert any supply shortages. The third technical requirement is that the water supply must be at least one hundred thousand cubic litres per day to support brewing operations. Electricity supply should be three-phase at 415 volts.

Speculative Work Breakdown Structure

The speculative work breakdown structure for this project is as follows.

1. Brewery construction

1.1 Architectural planning

1.2 Land survey

1.3 Obtaining of construction permits and regulatory approvals

• Obtaining construction permits
• Obtaining permits from the environmental management authority

1.4 Retaining contractors

• Retaining architectural contractor
• Retaining of electrical engineering contractor
• Retaining of mechanical engineering contractor
• Retaining of civil engineering contractor

1.5 Construction phase

• Construction of foundations
• Constructions of external and partitioning walls
• Roofing
• Installation of brewing equipment
• Interior design

1.6 Handover of construction project to the company

2. Marketing strategy development

2.1 Marketing research

2.2 Market analysis

2.3 Market segmentation

• Identification of market segments
• Choice of market segments to serve

2.4 Branding decisions

2.5 Development of marketing objectives

2.6 Action plan

3. Business process contracts

3.1 Identifications of rice suppliers

• Prequalification of suppliers by projected volume of production
• Prequalification based on the quality of rice produced
• Qualification of suppliers
• Signing of supply contracts

3.2 Identification of product distributors

3.3 Obtaining trade licenses from government

• Obtaining general trade licenses

3.4 Obtaining permits from alcohol regulators

• Obtaining of liquor trading licenses

3.5 Environmental assessment

• Retaining an environmental consultant to conduct an environmental audit
• Presentation of report to environmental authority for approval

3.6 Identification of service contractors

• Identification of electrical engineering services contractor
• Identification of mechanical engineering service contractor

Systems to Ensure Project Success

The systems needed for the success of this project are as follows.

The Project Management Office (PMO)

Tsingtao usually implements various projects concurrently. Usually these projects relate to marketing, product development and streamlining of business process.

Tsingtao found it wise to establish a full time PMO to handle project management functions in the company. The PMO will provide the project management team in charge of the Thai expansion project with decision support and oversight to ensure that it meets all the required project management standards.

Change Management System

Change management is a vital part of project management. The change management system for this project has three aspects. First, it handles the chance that a senior project manager may leave the company at a critical stage of the process. The strategy in place is to ensure that every senior project manager shares responsibilities with a highly capable assistant who can provide continuity in case of staff changes.

Secondly, the company has retained lawyers in Thailand to keep an eye on the legal environment to ensure that Tsingtao enjoys the benefits provided by any new laws affecting foreign investments, and avoids the pitfalls associated with business in Thailand.

The third aspect of Tsingtaos change management strategy is keeping an eye on the business aspects of the project. This includes observing changes in the tastes and preferences of the Thai consumers as well as the availability of supplies.

Project Control System

The project control system in place has two main aspects. First, the company gave sufficient space to the project management team to handle all issues relating to this project.

This team reports directly to the board of Tsingtao. Secondly, the PMO and the Internal Audit Department of Tsingtao provide immediate oversight of the activities of the project management team. Reports by the PMO and the Internal Audit Department form the basis of discussions of the project management teams activities at the board.

Risk Management System

One of the main duties of the project manager is to keep track of risks that may affect the project The project management team has a risk matrix that forms the basis for risk identification and management.

This risk matrix makes it easy for the project management team to identify risks to the project through regular reviews. Every week, the project manager submits a report that contains a risk appraisal of the project based on the risk matrix developed for this project.

Project Collaboration

One of the biggest challenges that every organization faces when it comes to project management is how to achieve collaboration across various business units. The nature of projects is that they usually require the input of various departments in ways that do not conform to the established organizational structure.

A project management committee can function as a separate organization within the organization. In order to reduce the risk of dysfunction in Tsingtaos Thailand project, the company took the following measures.

First, the company assigned one of the senior vice presidents the role of project manager for the Thailand project. This VP will be the first president of the Tsingtaos Thailand brewery. The Board felt that making this VP the project manager would give him the opportunity to understand the Thai business environment.

Secondly, the board decided to reduce red tape in decision making by making the project management team directly answerable to the board. This makes it easy for the team to make decisions independently away from the bureaucratic processes that plagues many business decisions The board only tracks the overall performance of the team in regards to the objectives of the project.

The third aspect of this project is that the board enlisted the help of the Internal Audit Department to keep an eye on the expenses of the project. However, the audit team can query expenses that fall out of expectations. The Internal Audit Department, then reports its findings to the board for further action.

The PMO on the other hand analyses all reports presented by the project manager on behalf of the board. The board then makes decisions based on the reports presented by the PMO and the Internal Audit Department.

Role of Organizational Culture in Project Success

The organizational culture of Tsingtao is playing a very important part in the development of this project. Internally, Tsingtao has a global mindset because of its international clientele. Tsingtao works well with people from other cultures in its marketing chain.

The companys German heritage gave it an international focus on business. The company does not look at itself as a Chinese company, but as a brewery operating in China. This explains the decision by the board to move some operations to Thailand in order to serve its customers better.

Despite the internal perception of the companys identity, the company operates within a Chinese cultural context. One of the visible impacts of Chinese culture in the operations of the project management committee is the choice of the senior VP to head the Thai project.

The Chinese culture stresses seniority when it comes to promotions and during hiring. In addition, staff members hold seniors in high regard because of the cultural heritage of the Chinese people. The board is sure that the senior VP will have complete control over the project because of the respect the other project team members accord him.

In addition to these cultural aspects, the Chinese power structure usually works around centralised controls. The senior VP is an organizational insider. The board is therefore comfortable with him at the helm of the new operation.

The Iron Triangle

The success of this project depends on the ability of the project team to deliver it within the scope, cost, and schedule. The scope of the project is non-negotiable. The project management team must deliver the project exactly as designed for it to meet the projects objectives. On the question of cost, the team can find cost effective options in the design of some aspects of the project.

For instance, the project management committee can find large rice suppliers and sign supply contracts with fewer people. This option will save on the cost of organizing large-scale meetings with many smallholders. However, the company will need time to find these cost effective options.

The schedule of the project is flexible and is not entirely in the hands of the project committee. For instance, the company cannot force the Thai authorities to process permits faster than usual. The company must wait for the authorities to act.

ICT Resources Assessment

The three main types of ICT resources useful to this project include project management software, teleconferencing facilities, and internet banking. The project committee needs project management software to schedule tasks and to keep track of progress. The project can also benefit from collaboration software to ensure the team is in touch at all times. This will cut the costs of physical meetings and will save time.

The project management team and the board can have meetings via teleconferencing facilities. This will cut out the need to travel between Thailand and China for board meetings. This will also save on time and cost for the project.

Thirdly, the project management team will benefit from the internet banking facilities because of the need to transfer funds between China and Thailand to finance the operations of the project. Currently, there are many options available for international funds transfer. Some of these options require regulatory approval.

Retrospective Project Plan

The diagram below shows that network diagram and the critical path for this project.

Figure 1: Network Diagram

The tasks, detailed in the network diagram are as follows. The tasks listed in red show the critical path of the project.

1. Start
2. Architectural planning
3. Land survey
4. Obtaining of construction permits and regulatory approvals
5. Retaining contractors
6. Construction phase
7. Market analysis
8. Market segmentation
9. Branding decisions
10. Development of marketing objectives
11. Action plan
12. Identifications of rice suppliers
13. Identification of product distributors
14. Obtaining trade licenses from government
15. Obtaining permits from alcohol regulators
16. Environmental assessment
17. Identification of service contractors
18. Handover of construction project to the company
19. Marketing research
20. End

Risk Management Plan

Table 2: Risk Management Plan

Evaluation of Project Tools and Methods

The following table summarises various project management tools and methods, alongside their benefits to this project.

Table 3 Assessment of project management tools and methods

Conclusion

This success of the Tsingtao project in Thailand will depend on the use of robust project management tools and methods. The project enjoys strong support from the Tsingtao board, which is a critical requirement for the success of any project. However, the project will require careful implementation because of uncertainties inherent in establishing a new business in an unfamiliar business environment.

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Introduction

Currently, Bud Light is recognized as the King of Beers in the US (Budweiser Bud Light: Brand Profile, 2016, para. 1). This beer outsells all of its competitors with impressive statistics  one out of every four beer bottles sold in the United States is Bud Light (Budweiser Bud Light: Brand Profile, 2016). As a brand, Bud Light competes within a densely populated industry where the rivals are aggressive and skilled. However, the brand manages to remain on top of the competition and overcome all the challenges imposed by the rivals.

Brand Development

Ever since 1957 and up to 2011, Budweiser (the brand from which Bud Light originates) has been the best selling beer brand in the world; after 2011, it was overtaken by a new Chinese domestic brand (Budweiser Bud Light: Brand Profile, 2016). The brand was launched in 1982, and its initial name was Budweiser Light. Soon, it managed to become the most popular beer of the Budweiser family steadily taking over all of its main competitors (Budweiser brands included). In 2015, the off-trade sales revenues of Bud Light estimated as large as 6.15 billion dollars (not counting the incomes gained by the beers sold by bars and restaurants) (Budweiser Bud Light: Brand Profile, 2016). The victorious path of Bud Light was not without losses and falls. For example, in 1988, it has experienced a significant decline in revenues which made it drop to the second rank in the list of the best-seller beers of the United States. Another decline occurred in 2009 after a peak in 2008, this year-by-year rise and fall pattern used to be quite typical for the brand.

Marketing

The marketing campaigns of the brand have become a significant part of its image due to its memorability and unconventional approach (Budweiser Bud Light: Brand Profile, 2016). For instance, the most recent series of advertisements features the Bud Light Party (a likening to a political party competing during the elections). The advertisement employs multiple celebrities known and loved among the Millennial generation, in particular, some of the most significant roles in the commercials are given to Amy Schumer, Seth Rogen, and Michael Pena (Fromm, 2014). The advertisements are done in a comedic and sharp manner with the involvement of multiple relevant concepts such as the upcoming Presidential elections in the United States, references to the pop culture objects, and common social arguments. As a result, one may conclude that the brand image of Bud Light is skillfully constructed based on the social relatedness and thorough research of the interests and needs of the customer base.

Distribution

Even though the domestic market of the US is the primary source of revenue for Bud Light, this brand is distributed in about seventy other countries (Budweiser Bud Light: Brand Profile, 2016). One of the largest distributors of the brand is China where it is sold by seventy different wholesalers in forty regions (Budweiser Bud Light: Brand Profile, 2016). The diversity of the cultures and markets in which Bud Light has expanded over the years has caused some challenges for the brand name that had to be changed in some countries.

Conclusion

Bud Light is the beer number one in the United States, and also one of the top global competitors in the industry with massive revenue. Bud Light is recognized for its powerful and aggressive marketing campaigns that involve multiple American celebrities and popular concepts in order to appeal to the Millennial generation that currently represents the largest sector of Bud Lights customer base (Fromm, 2014).

References

Budweiser Bud Light: Brand Profile. (2016). Web.

Fromm, J. (2014). The Secret to Bud Lights Millennial Marketing Success. Web.

Eurasian Brewing Company (EBC) is a beverage company that was created in 2011 after the merger of two companies. The company is mainly established in Asian nations, including China and Singapore, producing various beverages. The company has recorded immense growth since its inception, with expansion to various countries across the globe and massive profitability. The management of the company has been a vital part of its success, drawing strategies that have enabled growth. EBCs management sometimes disagrees with plans for the future, but these alternate views have been critical in guiding decision-making and expansion. In 2018, there was a crisis between two of the companys top officials as they disagreed on the next step for growth and expansion. Le was EBCs China and East Asia operations manager, while Vivian Chin was EBCs marketing and export sales director.

Le suggested that the company introduced a new craft beer in China called Forbidden City meant to increase the companys profitability within China. Chin, on the other hand, suggested the introduction of a new beer brand that had both national and international appeal called Wild Dog. Le felt that the entrance of foreign brands into the Chinese and Asian markets, in general, compelled the company to manufacture a local brand to cement its position. Chin and her team suggested that it was the right time for the company to become global, with the Wild Dog brand targeting young men. The popularization of the brand would involve content that displayed the brand as a masculine taste to capture the target market. Both Li and Chin had adequate reasons why their idea was accurate, one with sufficient evidence on the undertakings of their competitors and variations in their current financials. The managing director of EBC, Victor Wang, requested a meeting with both officials to discuss the favorable direction for the company.

Introduction

This memorandum seeks to provide a guideline that outlines the costs associated with the production of beer. In this case, the emphasis will be on a process costing system. Process costing is used when a company carries out mass production of similar products, especially in a scenario where the costs of the output cannot be distinguished from each other. Therefore, the cost of the beer is assumed to be the same as the cost of every other product. The company adds up the total cost of production and then allocates it to the number of units produced.

Direct materials

To understand the accounting costs that are associated with the production of beer, it will be important to understand the raw materials and other costs that are incurred in the processing departments. The first department is the mashing department. The raw materials that are added to production in this department are ground barley malt, water, and milled rice (Rios-Mercado and Rios-Solis 208). The second department is straining.

There are no raw materials to be added to the production process within this department. The third is known as the brew kettle department. At this stage, hops are added to the production process. The next step is the cooling department and no materials are added at this stage. In the next department, primary fermentation, yeast is added; and beechwood chips are added in the next department, which is the beechwood gaining department. The next department is filtering. No raw material is added in the filtering department. However, a final quality control check is carried out at this point. The next stage is the filling and packaging department.

At this stage, the packaging materials such as bottles and labels are added. The final stage is the shipping department. At this stage, cartons are added to the production process and the final products are transported to various distribution centers. Therefore, this summary lists the raw materials that are used in the entire production process.

Direct labor and manufacturing overhead

A review of the video shows that large machines are used in the production process. This indicates that the production of beer is capital intensive. Also, there are a few employees who are designated at some location. Therefore, their salaries and wages will account for the direct labor costs. An assumption that will be made is that labor costs will be incurred at each stage of production in operating and maintaining the equipment for making beer.

Further, the manufacturing overhead will be the depreciation of the equipment, maintenance costs, and the cost of utilities. It is worth mentioning that the production process of beer occupies a large space that requires utilities such as lighting, heating, and insurance, among other costs. These are some examples of manufacturing overhead costs. The journal entries presented below show a summary of the flow of accounting information for the production of a six-pack of beer (Rios-Mercado and Rios-Solis 208).

The production process ends once the bottles of beer are packed in boxes. Therefore, finished goods are accounted for in the form of cartons. It is worth mentioning that companies that manufacture beer often produce a variety of brands.

Each brand of beer makes use of different ingredients. Besides, the various brands arise because of differences in the process production. Therefore, cost should be allocated with the differences in the production process in mind. This implies that some material and conversion costs are allocated to specific batches and not to the entire production process. Therefore, it is important to take into account the brand that is being manufactured in the entire production process. The accounting entries for the costs are similar to those of job order costing (Drury 279).

Cost flow

In the case of the process costing system, the flow of cost does not differ significantly as compared to the other costing systems. The direct materials are added at the start of the production. The other costs, such as labor and other overheads, are added during the production process. In this case, barley malt, water, and milled rice are added at the beginning of the production process. Furthermore, some materials are added at some stages of production. From an accounting point of view, the first step is to record the purchase of raw materials. When the production of beer begins, the items are moved from the raw materials account to work in progress.

Therefore, the raw materials are no longer available for use. The final goods are those that are ready for distribution or consumption. Therefore, the inventory is moved from work in progress to finished goods. Finally, when a sale is made, the revenue and associated cost is recognized. The company makes use of both the weighted average costing method and the first-in-first-out approach to value inventory. Accurate estimation of costs is important for accurate pricing and making important financial decisions (Bhimani, Horngren, Datar, and Forster 198).

Works Cited

Bhimani, Alnoor, Charles Horngren, Srikant Datar, and George Forster. Management and Cost Accounting, England: Pearson Education Limited, 2008. Print.

Drury, Colin. Management and Cost Accounting, Boston: Cengage Learning, 2008. Print.

Hirano, Hiroyuki. The Just-in-Time Production System, Florida: CRC Press, 2009. Print.

Rios-Mercado, Roger and Yasmin Rios-Solis. Just-in-Time Systems, New York: Springer, 2011. Print.

Vanderbeck, Edward, and Maria Mitchell. Principles of Cost Accounting, Boston: Cengage Learning, 2015. Print.

Weygandt, Jerry, Donald Kieso, and Paul Kimmel. Managerial Accounting: Tools for Business Decision Making, London: John Wiley & Sons Ltd, 2010. Print.

The current essay is an analytical piece of writing that addresses beer processing. The brewery is a series of complex processes that include the following subprocesses: malting and milling, mashing and lautering, boiling, fermenting, conditioning and filtering, and as the last step, pasteurization. In the current essay, the abovementioned nine (excluding packaging) stages of the brewery are presented and explained to demonstrate the whole process of making beer.

The first two steps of the process of brewery are malting and milling. First of all, grains (wheat, oats, or rye) are placed in cold water until they are saturated. This is followed by its placement in germinating boxes for germination that can take up to six days. After, grains are placed in a kiln and get dried. At this stage, the taste and color of future beer are formed. When the drying process is complete, the product is called malt. The malt is milled (in the same way as flour) and can be easily dissolved in water.

The next steps of the beer processing are mashing and lautering. The obtained malt is mixed with hot water in the mash tun to create the mash. At this stage, mashing and temperature control are essential to optimize sugars and proteins. Then, in the lautering process, the wort is separated from the spent grains (McHugh, 2017). The mash is placed into a lauter tun where the clear wort is separated from the spent grains. Besides, water is added to the tun to extract fermentable sugars. It is essential to not hold it for too long, as bitterness may appear. Often in modern breweries, mash filters are used instead of grains.

The fifth step of the complex brewing process is wort boiling. The wort is boiled in a copper brew kettle or the brewing pan, and the hops are added into the wort to bring flavor and aroma to the beer (McHugh, 2017). The type and amount of hops influence the future taste of the beer. The received mixture is cooled to avoid oxidation and off-flavors.

The sixth step of beer processing is alcoholic fermentation. The process occurs in a fermentation tank where a brewing yeast is added. The yeast transforms sugars into alcohol and carbon dioxide (McHugh, 2017). The next two steps following the fermentation are conditioning and filtering. When the sugars are turned into alcohol and carbon dioxide, the fermentation process is ended. However, in conditioning, the yeast still performs an important function  absorbing off-flavors. In a week, the yeast is filtered that gives the beer the right taste, and makes it shiny. The last step in the process is pasteurization that aims to kill any remaining yeast and prevent further alcohol production (McHugh, 2017, para. 11). The processes consisting of nine stages are described above can be presented through three main components: raw materials (wheat, oats, or rye), processing and fermentation, and monitoring.

In summary, the present paper aimed to provide an analytical process writing devoted to the brewery. There are nine essential stages of beer processing: malting, milling, mashing, lautering, boiling, fermenting, conditioning, filtering, and pasteurization. The nine processes were presented and explained in detail to analyze the process. Each step is essential and affects the next one and, thus, the whole outcome of the brewery is closely connected with the correct execution of every stage.

References

McHugh, T. (2017). How beer is processed. IFT, 71: 11. Web.

This paper will use the level of alcohol, specifically beer, consumed as the independent variable. It is well known that alcohol consumption has a cumulative effect on an individual’s intoxication, with this amount varying for men and women. For example, the average male requires between 4 (1.400 liters) and 4 (1.750 liters) bottles of beer to become intoxicated, whereas, for women, this amount is reduced to 3 (1.050 liters) and 4 (1.400 liters) bottles (Eastwood et al., 2020). For this reason, increasing the amount of alcohol for respondents would be expected to increase the intoxicating effect. Similar manipulations of the independent variable have already been demonstrated by Liu et al. (2019), who studied the relationship between the amount and strength of alcohol and the socio-demographic factors of the sample. For the current study, the amount of alcohol consumed was adjusted directly for beer, whose strength is traditionally considered to be close to 4.0-5.0 percent (Liu et al., 2019; Bellut & Arendt, 2019). Test participants without differentiation into demographic cohorts will be asked to drink up to four bottles of beer (1.400 liters) as a manipulation of the independent variable, with intoxicating effects assessed after each of the four bottles. At the same time, the control group was offered non-alcoholic beer drinks as placebo.

The respondents’ attitude towards aggression will be used as the dependent variable. For this reason, the dependent variable is the Attitude Towards Aggression Scale (ATAS), as shown in Figure 1. This 32-item scale categorizes respondents’ attitudes toward aggression at three levels, including “harming,” “normal,” and “functional” responses (Jansen et al., 2006). Respondents’ answers for each question are measured on a standard five-point Likert scale, from totally disagree (1) to totally agree (5) with the statement. For instance, “an aggression is hurting other mentally or physically”, with which the respondent can either agree, disagree, or express uncertainty in their answer. Cronbach’s alpha as a measure of level reliability showed promising results for this scale: “harming” (.87), “normal” (.82), and “functional” (.50) (Jansen et al., 2005). The ATAS has also been determined to have satisfactory divergent validity of the scale, explaining up to 70% of the variance in the data (Jansen et al., 2006; Nam et al., 2022). Thus, the ATAS scale can be reliably used in the current study to measure the desired effects of intoxication on respondent aggression.

References

Bellut, K., & Arendt, E. K. (2019). Chance and challenge: Non-saccharomyces yeasts in nonalcoholic and low alcohol beer brewing–A review. Journal of the American Society of Brewing Chemists, 77(2), 77-91.

Eastwood, A. P., Penton-Voak, I. S., Munafò, M. R., & Attwood, A. S. (2020). Effects of acute alcohol consumption on emotion recognition in high and low trait aggressive drinkers. Journal of Psychopharmacology, 34(11), 1226–1236.

Jansen, G. J., Dassen, T. W., Burgerhof, J. G., & Middel, B. (2006). Psychiatric nurses’ attitudes towards inpatient aggression: preliminary report of the development of attitude towards aggression scale (ATAS).Aggressive Behavior: Official Journal of the International Society for Research on Aggression, 32(1), 44-53.

Jansen, G. J., Middel, B., & Dassen, T. W. (2005). An international comparative study on the reliability and validity of the attitudes towards aggression scale.International Journal of Nursing Studies, 42(4), 467-477.

Liu, R., Chen, L., Zhang, F., Zhu, R., Lin, X., Meng, X.,… & Zhao, Y. (2019). Trends in alcohol intake and the association between socio-demographic factors and volume of alcohol intake amongst adult male drinkers in China.International Journal of Environmental Research and Public Health, 16(4), 1-12.

Nam, S., Hong, S., Kim, H., Wong, J. Y. H., & Fong, D. Y. T. (2022). Reliability and validity of the Korean 12‐item Perception of Aggression Scale.Journal of Psychiatric and Mental Health Nursing, 29(3), 442-450.

The advertisement message, conveyed by the ‘Budweiser: king of beers’ print-ad is object-oriented. The depicted bottle of beer is meant to emphasize both: the promoted beverage’s coldness/tastefulness and the fact that it is specifically Budweiser that ‘reigns’ over the rest of the beer brands.

This is also the reason why the bottle’s lid is flipped upside down – it makes the bottle appear as if it was wearing a ‘crown’. The bottle of Budweiser beer is situated at the poster’s very center, which increases the extent of viewers’ emotional/cognitive comfortableness with the conveyed message even further.

The typed message, seen above the depicted object, thoroughly correlates with the poster’s visual semiotics, because it does encourage consumers to assume that in the ‘world of beer’, Budweiser dominates. The message’s strongly defined affirmativeness does not provide observes with much of a liberty to interpret the promoted idea’s ideological connotation.

The pragmatic subtleties of this particular advertisement-poster are concerned with the poster’s assumed ability to encourage beer-consumers to believe that by drinking Budweiser beers they become ‘empowered’. This, of course, increases the emotional appeal of the Budweiser beer-brand to American (Western) audiences even further, because they predominantly consist of people endowed with the so-called ‘Faustian’ (domination-seeking) mentality.

In conclusion, the print-ad ‘Budweiser: the king of beers’ represents the classical example of how advertisers go about combining explicit and implicit commercial messages in the single advertisement-piece, while remaining fully aware of what accounts for the targeted audience’s psychological anxieties.

Interpretation

The commercial appeal of the print-ad in question appears to reflect the designers’ awareness of the fact that the foremost psychological trait, on the part of the targeted audience members, is their deep-seated anxiety to dominate others. In its turn, this explains why the overt messages, conveyed by this poster (such as the logo ‘king of beers’), exploit the ‘appeal to masculinity’. Nevertheless, there are also a number of covert overtones to this particular appeal.

For example, the color of the poster’s background is dark-red, which is supposed to evoke in potential consumers the image of the ancient Roman god of war Mars. The ad’s vertically-aligned format is clearly reminiscent of the notion of hierarchy, which has traditionally been associated with the notion of masculinity.

Apparently, while exposed to this poster, male beer-lovers are expected to grow increasingly comfortable with the idea that by drinking Budweiser beer, they will be more likely to attain a social prominence in male-dominated (Western) societies.

Moreover, because the bottle of Budweiser beer, depicted in the poster, appears visually subliminal of an erect penis, the targeted buyers’ prolonged exposure to it will inevitably result in encouraging them to think that the consumption of Budweiser beer, on their part, is the direct pathway towards ensuring the undermined integrity of their sexual powers. This, of course, suggests that the ad in question cannot be discussed outside of the framework of the currently predominant socio-cultural discourse in the West.

Even though I do drink Budweiser beer occasionally, I find it hard relating to how the designers of this and went about promoting the brand. Partially, this has to do with the fact that, as it was mentioned earlier, there are clearly euro-centric overtones to it. In my opinion, this makes the concerned ad potentially capable of offending consumer-audiences that consist of non-Whites.

The ad also appears ill-suited to be promoted among female beer-consumers, especially if the latter happened to share the value of feminism. The reason for this is quite apparent – the designers of this particular print-ad made a deliberate point in representing the advertised object, as being sexually suggestive. At the same time, however, the designers of the above-discussed and can be well congratulated on having succeeded in exploring deep-seated anxieties, on the part of the targeted audience’s (White males) anxieties.

References

Budweiser: king of beers [Image]. (n.d). Web.