CONTENTS

Company Analysis……………………………………………………………………….… 2
SWOT Analysis…………………………………………………………………………….2
Competitors Analysis…………………………………………………………………….…3
Market Analysis…………………………………………………………………………….5
PEST Analysis……………………………………………………………………………...7
Market Segmentation……………………………………………………………………….8
Distribution Strategy & Marketing Entry…………………………………………………..11
Conclusion………………………………………………………………………………….11
Company Analysis:
Aire Valley breweries plc is a medium sized company with a large amount of market
share in UK. It produces products of high quality and impeccable taste. The company
currently produces five products in three lines, namely bottled beers, lagers and stouts.
Hostenbeck and San Bernardo are two European style lager bottled beers with 5%abv and
5.5%abv, Camelot and Ark Royal are British style dark bitter beers with 4.5%abv and
5.6%abv and a Irish style dark stout Beer named Pot of Gold with 5.2%abv.

SWOT Analysis:
We focus on our strength as to have the ability to respond quickly to what the market
dictates and to provide quality beer in a growing market. We also acknowledge our weakness
of a medium-sized company without a lot of experience, and the threat of new competition
taking aim at our niche.

Strengths:
Well established quality and brand in UK.
Variety of beers produced for all age group.
Good response in Off-trade and On-trade markets with proper costing.
Diversified Market segments which ensures that we grow in different markets rather than
depending on one single market area.

Weaknesses:
Canned Beers are usually preferred unlike bottled beers manufactured by Aire Valley.
Premium prices could not be afforded by all.
Lack of prior exposure to Chinese market.
Experiencing Chinese Distribution system will be a greater challenge.
Introduction of new organizational practices and employees with lack of experience will be a
challenging part.

Opportunities:
Higher level of market to capture as Chinese beer market had 12% growth per volume in
2008.
Growing Beer market of china prefers Premium beers over 17% which is the important
product of Aire Valley.
Tapping Western China market will be advantageous due to higher population growth.
The European culture defined behind the brand would be the greatest opportunity towards
hitting China market.

Threats:
Biggest threat would be china`s own Snow, Yanjing, Tsingtao, Guangzhou beer companies.
Existing European companies like Carlsberg would add-up to the threat.
Older people prefer consuming wine to beer due to health problems.
Difficult to get used to the Chinese distribution system.

Marketing Plan - Aire Valley Breweries in China

Competitor Analysis:
After certain mergers and acquisitions, Tsingtao, China Resources, Yanjing beer are
in first tier while Zhujiang, Harbin and Kingstar beers hold the second tier position.
Targeting younger generation with a theme of “great expedition”, the China
Resources Snow Breweries uses its strategy to acquire local brewers to increase its
production capacity in China. Recently it has started picking up the market opportunities by
small acquisitions, investments and upgrading its capacity and it gives upmost importance to
consumer’s taste offering new flavours and launching new products depending on the area.
Henan jinxing brewery uses its brand promotion strategy to increase its brand
awareness using their brand ambassador and undertaking promotional events. They focus on
innovation rather than ongoing production and target on introducing new generation beer in a
high-end market.

The following major beer companies are ruling in these provinces of China.
North East china - China Resources and Harbin beers
North China - Yanjing beer
East China - Tsingtao beer
West China - Chongqing beer
South China - Zhujiang beer
Central China - Kingstar beer

Marketing Plan - Aire Valley Breweries in China

 To achieve rapid expansion Tsingtao Brewery restructured its Management and
Internal Operations, properly structured its organisation and developed strong sales
promotion skills with its “1+3” and “1+1” brand strategy, whereas Beijing Yanjing Brewery
thought of improving its technology, developing its brand internationally and focusing on its
distribution network and economy. It used a business strategy of “conducting ourselves
lovingly, doing our work honestly, and undertaking our business creditably”.

Market Analysis:
China is the world’s number one beer producing nation according to China’s Beer
Association. China has maintained its position as the world’s biggest beer producing nation
with more than 410 million hectolitres in 2008, which is four times the volume produced in
Germany. China also recorded the highest growth in output of all countries in 2008, with
more than 17 million hectolitres. Germany, with beer output of about 103 million hectolitres,
is now in fifth position in the world rankings, behind China, the USA, Russia and Brazil.
As the intentions and emphasis of Chinese government which was originally based on
Mineral extraction process has drifted over to brewing industries, this is the right time for
Aire Valley to hit the Chinese market. This could be directed by implementing modern and
updated production techniques.

Marketing Plan - Aire Valley Breweries in China

 By analysing the pros and cons of Chinese beer market we can come to a conclusion
that though the beer market is saturated with a good number of brewing companies which can
give a tough competition, the market is still in a greater need of a kind which can
manufacture competitive drinks at competitive prices with implementation of its newer and
cutting edge technologies.
Keeping in mind that our company is going to operate in a monopolized market our
marketing strategy would play a vital role as it has to fit itself between our production
abilities, the benefits it will yield and the expectation of Chinese beer market. Thus Aire
Valley is expected to have a warm welcome.

PEST Analysis of Chinese Beer Market:

Political:
WTO membership in 2001 opened Chinese spirits market.
MODERNISATION: Focusing on Internationalization by making move in the western
market.
COUNTERFEITING: Use of fake labels and bottles with cheap foreign spirit were sold to
inexperienced customers.

Economic:
ECONOMIC GROWTH: Real GDP growth is expected to increase after slowdown from 8.50% in
2009 to 9.01% in 2010
MARKET SIZE: Sales of spirits must grow from 12% to 14%
TAXATION: Spirit Consumption Tax is a combination of 20% ad valorem tax and unit tax at
1yaun/kg.
Rise in earnings of the middle and low income groups and pensions for retirees.

Social:
Population growth rate is 0.655 in 2009 with average life expectancy of 73.47yrs.
Spirits consumption is higher during festive holidays and people are getting aware of health
aspect of alcoholic drinks.

Technological:
MEDIA: Communications through symbols is preferred in local markets.
INTERNET:"Great firewall of china" controls and tracks websites to situate with the policies
of Chinese government.
DISTRIBUTION: Limited to Chains of supermarkets and specialist retailers.

Marketing Plan - Aire Valley Breweries in China

Market Segmentation:
Many a market research had been undertaken to study the taste of the consumers for
the consumption of the beer and what would make them buy more. This had let the brewing
industry in china know much about the consumers and the taste they look forward for in their
brew.
We have come to know that the preference for the beer over the female population has
been increasing every single day. Thus any product that is being realised in the Chinese beer
market must aim to satisfy the needs and taste`s of female population.

The following chart shows the regional distribution of various beer companies in
china. This needs to be taken into a serious account as the competitors form the major part of
any beer market.

Marketing Plan - Aire Valley Breweries in China

Price:
People in Northwest China are less aware of the health aspect of alcoholic drinks, thus
making low price a popular aspect for making a purchase decision. Thus to be competent
enough in the market we require to give customers discounts over the bulk orders.
The beer price in China is much lower than that in the US. That translates into much
lower margins at each tier of the distribution.
Place:
The place we have chosen as a target market is Northwest China (Shaanxi, Gansu,
Qinghai, Ningxia, and Xinjiang). Main reason is rate of population growth, increasing
number of adults, urbanization and increasing economy. We have a single major brewery
player Tsingtao and some local manufacturers in this area, thus giving Aire Valley an
opportunity to grow comparatively better in this market, than other provinces.
Beer is an appropriate choice in the hot and dry weather of Northwest China. Rise in
disposable income of consumers and low profits in low-end beer products has led to growth
of demand in premium lagers.

Marketing Plan - Aire Valley Breweries in China

Product:
The ratio of women in total population is high in this area thus making us focus on
production of light beer. Adult male also prefer taking light beer than bitter beer. Due to
health conscious mostly older people prefer taking wine than a beer.

Use of cans in production of beers rather than bottles is preferred as this beer will
mostly be consumed by adults. Products must also be ranging from the low-end segment to
the high-end of beer market.

Promotion:
Sales of foreign alcoholic drinks are usually seen in retail stores and hypermarkets in
northwest China with many promotional events. Price is not being the decision making factor
in on-trade channels due to increased sales in premium lagers.

Marketing Plan - Aire Valley Breweries in China

Advertisement:
We must be committed to produce products that go hand on hand with the
commitments of the consumers. Moreover the products are meant to be produced in an
ethical manner respecting the needs and values of consumer societies. Advertising in local
newspapers has always been a good option as it reaches locals.
Events:
“The organization aims to participate in trade shows and quality taste tests”.
Organisation indeed must aim at producing quality good which can earn loyal customers.
Public Relations:
We must try to spread the awareness about the company and its products and its
shares through magazines. Undertaking community services will be very helpful in obtaining
good reputable image among the public. Various campaigns can be conducted so as to create
and spread brand awareness.
In all the above we intend to communicate our ability to manufacture good quality
brews that will satisfy the customer’s needs.

Distribution Strategy:
We will be concentrating on two Distribution channels; Wholesale and Retail. (on-
trade and off-trade). Merging with local brands like Hans, Wuquan and Xiliang can be
advantageous as they are local brands with good image and distribution networks. We can
target Top hotels to small restaurants in an on-trade scale with various retail stores in off-
trade scale. Targeting on-trade distribution network is much faster as most foreign alcoholic
drinks are available in clubs, bars and hypermarkets.
Various aspects like transportation, location near markets, availability are kept in
mind when forming a breweries distribution centre.
Distributors are licensed by beer producers after a bidding process followed by a
commitment to achieve certain sales goal annually. Beer producers also allow multiple
distributorships for each brand of beer in separate province.
Distribution economy depends on payment term which is typically 1-3 months and the
order is dispatched only after the producer receives payments from distributor. Promotions
are organized at retailer sites by distributors in holidays and low business seasons.
Marketing Entry:
Some of the entries using which Aire Valley can enter Chinese market are as follows:
Direct Sales: In this strategy the products will be manufactured in home market and then
sold to Chinese customers directly. Elimination of middle persons (agents, distributors) helps
gaining huge profits with a proper control on prices.
Agent/ Representative: We will be looking for some local agent or representative who has
prior image in market and have good customer contacts. This will help us achieve good sales
and will get an overview of customer needs.

Marketing Plan - Aire Valley Breweries in China

 Distributors: Finding a local distribution company will be an advantage as it will give proper
timely service to customers, distribution and maintain customer relations. They have ability
to increase sales by means of promotion.

Conclusion:
Thus as per the observations, analysis and market situation we have concluded that
our target market will be Northwest province of china. We will be focusing on market with
age group 18-45yrs as they prefer light beer. We can expect good sales reports in initial days
in this province as it has seen rapid growth in economies, large market coverage and increase
people`s standard of living.
Choosing northwest province will help us as not many brewery companies are present
in this market and thus giving us opportunity to set a good base and increase our sales in
initial days. Having joint venture with local brands and launching a single product rather than
launching all 5 products just before their festivals in October will be the best timing. Focus
will be given on producing light beer with different taste, flavours depending on region it will
be sold and on packaging of beer in cans as they are preferred over bottles. Pricing will not be
issue in on-trade market but to make a strong base in off-trade market we need to keep a price
equivalent to present competitors. We can have various promotions in markets, retail outlets,
restaurants, pubs and some advertisements in newspapers. Giving discounts and changing
offers in timely basis will also attract the local public. Allotting a team to keep track on
feedback from market, stores, bars and hotels will help us improve in our manufacturing and
sales.

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Marketing Plan - Aire Valley Breweries in China