Marketing Strategy of Sab-Draft
Marketing Strategy of Sab-Draft
Marketing Strategy of Sab-Draft
Breweries
Name:
Instituti
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Date:
MARKETING STRATEGY OF SAB 2
Executive Summary
This paper examines the marketing techniques employed by the South African Breweries (hence
referred to as SAB) and their subsidiaries. Specifically, it describes the strategic principles that
have helped to establish the organization as a world-class manufacturer of beer in South Africa
and around the world. With SAB as the case study, the paper is structured to begin with an
introduction to examine the competitive dynamics and strategic features of the external
strategic planning and conducts an analysis of the organization using relevant organizational and
strategic models. Three hundred and third, the report examines the external stakeholder concerns
that SAB Company is experiencing and critically evaluates the effect of these concerns on the
SAB’s corporate image and brand equity. Finally, this report ends with a number of
recommendations for improvement of the Company’s marketing strategy to ensure it sustains its
Table of Contents
Contents
Executive Summary.......................................................................................................................2
Table of Contents...........................................................................................................................3
Introduction....................................................................................................................................4
Background of the Business...........................................................................................................4
Analysis of target market and positioning strategy........................................................................5
Porter's Five Forces Model Analysis of the Company...................................................................6
Threat of substitute products..........................................................................................................7
Threat of new entrants....................................................................................................................8
Bargaining power of Customers....................................................................................................8
Suppliers' bargaining strength........................................................................................................9
Rivals in the business.....................................................................................................................9
Strengths & Weaknesses................................................................................................................9
Structure of the Organization.......................................................................................................10
Strategic Analysis........................................................................................................................11
Developing a Strategic Plan for a Company................................................................................12
Analysis of the 4Ps (marketing communications strategy)..........................................................13
SAB’s Marketing Mix analysis....................................................................................................13
Product mix..................................................................................................................................13
Place and distribution...................................................................................................................14
Prices and pricing strategies.........................................................................................................14
Promotional Mix..........................................................................................................................15
Recommendation for Improvement.............................................................................................16
Conclusion...................................................................................................................................17
References....................................................................................................................................18
Introduction
The growth of a firm, the prerequisite for novel methods of coordination and area of business, and
the requirement for associations to continually respond to ecological changes both inside and
outside the activity, all require inventive strategies of coordination and area of business. The
strategy are completely impacted by the climate. Vital administration is a system where an
association's conclusions detail, execute, and assess cross-sectional jobs and goals to
acknowledge and satisfy prompt and long haul targets and objectives (O'Toole and Meier,
2014). Ecological mindfulness has demonstrated to be the beginning stage for key
inward and outside impacts. Key administration for the association requires a wide and target
assessment of both the outer and inside conditions, in light of early discoveries, to set up
administrative key destinations and objectives (Hill et al., 2014). Thus, this examination
inspects the South African Breweries Company's showcasing methods to guarantee effective
Limited and abbreviated to SAB) is a major refinery with a large presence in the country. From
October 10, 2016, when its proclivities were revealed to Anheuser-Busch InBev, it had been a
fully stated ally of SABMiller. Currently, it is the world's largest brewery. Anheuser-Busch
InBev SA/NV, formerly known as Anheuser-Busch SA/NV, is now a prompt assistant of the
South African Breweries (SABC) (Lisa, 2016). The Castle Brewery, which is now known as
SAB, was founded in 1895 as a result of the growing commercial sector for tractors and
excavators in and around Johannesburg. The company later changed its name to South African
Breweries in 1903. In a span of 24 months, the organization became the pioneer beer
manufacturer to be listed on the Johannesburg Stock Exchange, and the following year (1898), it
became the first contemporary organization to list on the London Stock Exchange, becoming the
first mechanical organization to list on the Johannesburg Stock Exchange. The South African
Bank (SAB) moved its headquarters and order to Johannesburg in 1950, after 10 years in the
capital. [5] After purchasing the Ohlsson's and Chandlers Union refineries in 1955, Castle
Brewing renamed the company South African Breweries to reflect the new ownership. Its
international reach has continued to grow since its first significant expansion in the 1990s. The
organization has acquired a number of affiliates in both developing and established industry
areas. A second UK-based holding organization, SAB plc, was established in 1999, and the
company's primary presentation location was relocated to London (Lisa, 2016). In May 2002,
when SAB plc acquired Miller Brewing Company, SABMiller plc was established. No foreign
brewery, including Whitbread of the United Kingdom, has succeeded in acquiring a significant
share of the South African beer market, despite many attempts by foreign breweries to do so.
Even while new organizations tried to challenge the limiting foundation on a regular basis, they
were either forced to go bankrupt or acquired by SAB before they had a chance to thrive. For
instance, National Sorghum Breweries (NSB) was established in 1990 as "a dim corporate
coalition" and was the first really new participant in the beer industry in more than ten years.
Some analysts predicted that NSB would overthrow SAB in few years and capture a 10 percent
share of the business market, while others predicted that SAB's unity would be jeopardized. Due
to a variety of factors, the organization had financial problems and was unable to acquire a
the sort as helpless karma or happenstance with regards to the level of competition inside an
organization.
The investigation of the external environment inside an association like SAB Company, as per
Peteraf et al. (2014), includes miniature climate factors that involve partner bunches inside the
association, concern people in the quick environs, clients, providers, public force and contenders;
though large scale climate components incorporate patterns and factors that occur in the public
arena and can contrarily affect the association's presentation. To successfully investigate both
large scale and miniature ecological impact, the outside climate should utilize the Porter's 5
Force Models.
deluge of speculation happens and drives benefit to the unrestricted economy level, just as the
capacity of organizations to endure income levels that are better than expected. Contest in SAB
is affected by five significant cutthroat elements. These incorporate the possibility of new
bartering force of clients, and the risk of elective items, to give some examples (Porter, 1985).
Following that, a careful assessment of a number of external aspects impacting SAB as well as
feeling threatened. With the introduction of Cider wine into the market, alcoholic beverage
market share has been diminished. Other companies are introducing tastes that are more popular
with consumers and are sweeter, such as whisky and Vodka, to their product lineup. Several
unique flavors for alcoholic beverages have been developed as a result of the success of
Crabbie's Ginger, which is produced by Ginger flavored Halewood International and has been on
the market for two years. Companies that manufacture alcoholic beverages will increasingly rely
on product modernization to remain competitive while also offering a wide range of alternatives
(Prahalad and Ramaswamy, 2013). This is the point at which traditional beer and lager
businesses are feeling vulnerable, yet consumers are being drawn to higher-end brands that have
a history of quality and innovation. Individuals are prepared and eager to spend more for unique
and finest things rather than paying the standard price for a common product (Porter, 1985). As a
result, premium, limited edition, and value-added items were introduced in order to maintain
profits, with the highest priority placed on quality. As a result, the threat posed by the substitute
is considerable.
brands and flavors that are different from the norm. Customers pay close attention to brands that
are unique or have a high level of competence. Clients are looking forward to new experiences
every day and are open to new possibilities. When it comes to premium beer, it was one of the
lager categories that saw growth in 2011. KC Brands' Cambodian beer King is garnering positive
feedback from customers, as are traditional products like Peroni Nastro Azzurro from Miller
Brands, as well as new brands like Mahou 5 Estrellas and Mahou 5 Estrellas from Carlsberg
(Dobbs, 2014). Customers were drawn to imported lagers because of their association with
global foodstuffs and complementary high-quality lagers, which contributed to their decision to
buy.
expenditure has reduced significantly during the past five years. Consumers and pricing are
tightly related within a certain business; for example, in the case of the SAB industry, regulatory
standards have created a standard for the lowest price to sell beer in retail. Consumers, on the
other hand, are turning away from beers as a result of the current economic climate and growing
interest in other fermented goods. Companies are unable to reduce expenses after reaching a
certain level, nor can they increase the demand for their products (Nair et al., 2011). Therefore,
because they are locked in this situation, companies face a great risk of losing their bargaining
SAB, the lager's assembling cycle is tweaked to create a lesser amount of vaporous feel, and the
crude materials utilized in its creation and synthesis are very different. Besides, the organization
has been getting bottles from a supplier of 66oml and 330ml containers for over four years,
making the organization less powerless against dangers from providers (Sheu and Gao, 2014).
This has diminished the measure of cash spent on modifications just as the measure of time spent
mass deals, which compares to a 80 percent portion of lager volume deals. In a merged
commercial center with a particular normal item, the portion of the market can delineate the
change in the item's prevalence (Chen, 2014). Subsequently, the risk from rivals in the business
has strengthened. Coors and Molson kept a steady piece of the pie with restricted development in
deals, wherein brands, for example, cobra brew have kept a predominant situation in the market
from earlier years because of the recent fads in ale drinking that have arisen lately.
advantages. The fact that SAB is profitable, as seen by the company's above-mentioned turnover,
demonstrates that it has the resources to invest in expanding the firm. Additionally, SAB is
currently a trademark that is known by the names Claridge and Cooper, which will aid the sector
in raising brand awareness even further (2014). The issue is in the fact that the brand is not
synonymous with high-end alcoholic-style beer of superior quality. After drinking it, people
report that it is a good-quality beer that leaves them feeling refreshed. The fact that SAB has
limited expertise in the beer pub industry is a limitation that hinders the company's success in
today's market. In the customer service sector, there is no previous experience or engagement;
yet, an industry must maintain ongoing communication with its customers through strategic
improvements (Teixeira, 2012). A study conducted within SAB revealed that the company's
experience in beverage and food production, such as Indian delicacies, is a significant asset when
it comes to developing new and innovative goods. While this can seem difficult, it is certainly
the company. SAB's organizational structure is depicted in the diagram below: Anheuser-Busch
InBev, which controls the majority of the company's shares through a joint venture, produces a
wide range of goods under a variety of brand names. Most businesses are organized into sections
based on the products that they manufacture (Stark, 2015). Its structure is based on the chain of
are all prioritized in the company's departmentalization strategies. As indicated by Wisner et al.
(2014), deviations in various production network standards or vows might unfavorably affect the
monetary and financial ramifications of an organization's activities. There are different co-usable
endeavors just as industry arrangements that are important for the organization's action, and these
arrangements direct components of the store network framework. Consider, for instance, the
organization's distribution center and client conveyance structures, which are administered by
joint endeavor concurrences with different bottling works. Undesirable changes to these
agreements could contrarily affect the business and monetary results of their individual
organizations (Smale, 2014). Dangerous weather conditions occurring more frequently or for a
longer period of time may interrupt the supply chain, as well as reduce manufacturing capacity
and influence consumer demand for the company's products. As a result of its operational
success, the company's organizational structure has shown to be effective. Management structure
Strategic Analysis
It has become progressively obvious that distinctions exist between two degrees of hierarchical
system: corporate procedure, which is worried about the kinds of ventures to contend in, and
business-level technique, which is additionally worried about how to contend inside a particular
business climate (Rowlinson, et al., 2014). It has been suggested that top directors utilize
clashing reasonable thoughts and related logical systems to assist them with settling on choices
on the kind of methodology to utilize. Notwithstanding the way that business system hypothesis
is advancing in essential administration, there has been minimal exact review to inspect the two
wide and autonomous objective review into the headway of both the outer and inside conditions,
with the fundamental discoveries filling in as the establishment for the advancement of the
executives’ key techniques and destinations (Hill et al., 2014). Enterprise level procedure and
business-level methodology are perceived as sticking to, and separately, in the techniques of
inside which complete organization organizations contend, as per Korine and Gomez (2013), is
portrayed as the distinction between one industry's procedure and another. Thusly, SAB's
representative enlistment and maintenance, deals, capital financial plan, and other industry assets
got from the organization's tasks in the current enterprises. In order to build corporate strategy
and achieve profitability, it is critical to first identify the resources and skills of the organization,
and then identify the organization's primary strengths. Competencies and resources should be
larger than those of the company's competitors in order for the company to be strategically
valuable. The SAB Diversification Division is constantly on the go, developing products and
experiences that are both new and unbelievably seamless. This is an illustration of the company's
capabilities in terms of maximizing the use of existing resources in an efficient manner. All that
the organization does is injected with splendid reasoning and imagination, from the plan of its
shape breaking cut jug to the business' weighty SAB Vision short film competition, which is
right now underway (Smale 2014). This was planned as a feature of SAB's sponsorship
procedure to give producers the opportunity play their short advertising clips during the business
breaks of smash hit films. HR, substantial assets, elusive assets, and gifts are totally needed for
the turn of events and execution of an organization's corporate methodology. This can only be
accomplished by an examination of environmental factors both within and outside the company.
and price, to encourage customers to patronize its products and services electronically. SAB's
strategy and marketing plan are built around the four Ps. Customers are interested in the beer
retail platform because of the company's marketing mix. It's a collection of SAB's marketing
techniques (Gauthier's et al 2014). SAB is South Africa's largest beer manufacturer, and
several competing platforms are becoming more powerful. As a result, the company faces a
growing competitive climate in the industry it serves, and if left uncontrolled, it would lose
market share to competitors. SAB can be robust in the increasingly competitive industry it
Product mix
SAB, as the world's largest beer manufacturer, provides customers with a wide range of goods
that align with the company's goal and vision. SAB's goal is to expand the number of
Castle lager, Castle lite, Castle free, flying fish, lion beer, Brutal fruit, Redd's, Corona extra,
and a range of additional products and services are among the options available. SAB has a
solid product mix, which it is continuing to expand in order to meet expected client needs
and desires.
distribution mix (Naver, 1990). SAB's principal means of contacting clients is over the
internet via its ecommerce platform, as well as with a large presence in the mainstream
media via advice, promotions, and endorsements. The company also conducts business and
interacts with its target clients through its website (Howarth, 2016). SAB's electronic
presence allows the company to simultaneously communicate with several customers across
the globe. Customers can visit the company's physical bookshops to purchase some of the
company's items in addition to its online presence. The organization also holds conferences
from time to time to engage physically with current and potential customers, as well as the
other stakeholders involved in its business operations. As a result, SAB has a strong market
position and distribution mix that includes both online and physical client engagement.
items and how it utilizes value level as an empowering influence to well contend while
staying beneficial in the commercial center (Lindc, 2011). Given the size of the organization
for this situation study, SAB depends on furnishing clients with the most ideal evaluating for
items and administrations. They achieve this by decreasing their expense of working together
and taking utilization of economies of scale. SAB utilizes three particular evaluating
methods, which are as per the following: market-arranged estimating procedures, value
separation valuing techniques, and worth based evaluating methodologies. SAB's essential
evaluating approach is one that depends on economic situations (Gensler and partners, 2013).
For every item and administration, the partnership looks at what rivals in the market are
offering and, as a rule, tries to give clients a more ideal arrangement. Pricing discrimination
refers to a business approach in which a corporation offers different price levels for the same
product or service depending on the customer's needs. Customer location, preference, value
placed on a product, and a variety of other factors are taken into consideration when the
Company provides varied prices for the same product. When searching for the price of a
Castle Lager beer on the South African Beer Company's website, the price will be different
from the price you would find on a United Kingdom website (Lindeman et al. 2012). By
implementing this strategy, SAB is able to increase their profitability while also providing
customers with the impression that they are getting a good deal on their purchase.
Promotional Mix
SAB's promotional mix may be defined as any component of the company's marketing mix; it
refers to the strategies and methods that SAB use in order to inform and attract customers to
its products and services (Barr, et al., 2012). SAB employs a variety of strategies to
communicate its product offerings to clients, including the use of advertisements, deals
the frequently utilized sort of advancement (Jaworski, 1990). Organization pays a specific
measure of cash to organizations or people who work different sites or electronic stages in
return for the arrangement of ads on their site. These devices help in the organization's
capacity to contact an enormous number of clients who utilize distinctive online stages to
lock in. SAB, in the same way as other different organizations, conducts special endeavors to
gain new customers consistently to build deals. It is their arrangement to lessen the cost of
certain things in their online store and to draw a timetable during which purchasers can just
buy the thing at the marked down cost. SAB additionally offers a beneficent giving exertion
known as SAB grin that urges individuals to give to great motivations. This is a type of CSF
marketing in which the firm distributes a percentage of the income it generates to a charitable
organization on their behalf. This has an impact on the mindset of customers who are more
willing to help others who are less privileged as a result of this. They purchase SAB items
because they believe in doing so and because they want to help those in need. As a result of
this endeavor, the company's image is enhanced in the eyes of its customers. Customer-
facing direct marketing is the practice of a corporation connecting directly with its customers
about its products and services offers. Using email, SMS, phone calls, placing advertisements
on its website and other kinds of contact, the company participates in direct marketing.
Direct marketing is targeted mostly at existing consumers, while it may also reach some new
customers. With direct marketing, a corporation can be confident that the message will be
collaboration and mutual influence between business and corporate strategy. Lesser businesses
that are right now interested in a single exchange have set up the one corporate level key choice
they have: which industry to join. Interestingly, less established areas consider expansion and
experience some of extra corporate system ends just as business level choices for the inventive
exchange unit, like whether to differentiate its activities (Esser et al., 2013). The development of
SAB, a starting lager maker, into the bear sector was an essential choice. Molson's business
proclamations were fixated on the best way to contend, and this later educated his employable
strategies, which included assembling, valuing, circulation, and publicizing, among different
parts of the organization's tasks. Another business methodology that has acquired prevalence as
the degree of worldwide contest has expanded is the joining of numerous business procedures.
SAB might decide to apply the procedure to make improvement in their capacity to: conform to
natural variances; acquire innovative abilities and aptitude; and master new abilities and skill
(Smale, 2014). Subsequently, shoppers can get esteem from item includes while additionally
addressing a minimal expense. Foundations that decide to utilize this strategy, then again, should
practice alert so as not to become caught in the focal point of the contention. For instance, not
being in a situation to effectively oversee cutthroat pressing factors and neglecting to accomplish
key seriousness are the two instances of key intensity. As indicated by Meyers et al. (2012), an
and dynamic cycles ought to be liquid, halfway brought together and to some degree
decentralized. Business openings are less explicit than they would be in a normally valuable
association, bringing about work force being all the more significantly propelled by the craving
Conclusion
Conclusively, in the present cutthroat business world, it is basic for SAB to advance and lead an
imaginative and broad improvement measure inside the firm. A client driven methodology with
an emphasis on efficiency is at this point not adequate, as organizations should turn out to be
more innovative to adjust to changing business sector requests and stay in front of the opposition.
In case accomplishment is the ideal objective, the apparent vital changes in the professional
presented by other cocktail organizations, South African Breweries were among quick to enter
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