Today, the standard of living of society in China has improved. People worry and dedicate time and resources to enjoy life more. Given this scenario, the country's beer industry has benefited and is being increasingly valued. But to take advantage of these benefits, a marketing strategy must be implemented to take advantage of the opportunities in the environment. This article analyzes the marketing strategy of the beer industry in China, taking the Harbin brand as an example, and proposes lines of action to improve it.
Keywords: strategy, commercialization, market, opportunity, beer industry
Marketing strategy of the Chinese beer industry
Introduction
In the past 20 years of reform and opening-up, China's beer industry has achieved unprecedented development. Since 2007, the country has become the world's largest producer and consumer of beer. Today, the Chinese beer industry is one of the most competitive industries in a market characterized by fast and effective final consumption. In this situation, companies must be more aggressive in their marketing operations, seeking to implement strategies that allow them to take advantage of the potential of the market.
Medium and high grade beer has become the main consumer product in the alcoholic beverages market. Inserting into this market with this product is an important way to increase the economic efficiency of the companies that develop in it, since the level of consumption in the urban market is relatively high and the medium-high beer market capacity continues to grow..
Most of the beer companies have competed in the medium and low grade beer markets. This has resulted in not only failing to gain competitive advantage, but serious injury due to excessive pricing. Consequently, companies in the beer industry have begun to adjust production structures and market strategies by focusing forces on medium and high level market development.
The objective of this article is to analyze the commercialization strategy of the beer industry in China, taking the Harbin brand as a point of reference, and sets forth a series of strategies and propose lines of action to improve it.
The work is structured in four headings. In a first section, the beer company Harbin is briefly presented, which is taken as a reference point for this article. In a second moment, the analysis of the macroenvironment in which the beer companies operate is carried out. A third section analyzes the market in terms of Opportunity, Threats, Strengths and Weaknesses. In a fourth and final section, the market positioning of the Harbin company is analyzed and its strategic marketing options are presented.
Brief presentation of the Harbin beer company
Harbin Beer Company is one of the leading beer companies in China. It is a large company with an annual production capacity of 1.9 million kiltoliters of beer.
The Harbin beer company owns 13 medium and large beer production companies being one of the largest professional beer manufacturers on the Chinese mainland. In recent years, Harbin has consolidated its brand from a strategic point of view and gradually established a solid commercial marketing model, which has allowed it to have a healthy development at high speed in the market.
The excellent products it offers come from strict in-house scientific management and efficient outsourcing. The Harbin beer company pays attention to establishing a comprehensive and integrated service market system, which is based on the adoption of new marketing concepts and methods, continually offering new products to meet the needs of different consumers.
Today, Harbin's beer not only sells well in provinces across the country, but is also exported to more than 10 countries, such as the United Kingdom, the United States, Russia, and South Korea, gaining market share in the international stage. The pure and refreshing flavor, clean sense, high-grade image are the attributes that characterize and differentiate it from the competition.
Harbin's beer has an excellent market image and is preceded by a centuries-old history of good reputation and which underlines its traditional values. It is growing in the market, earning praise and love from consumers.
Analysis of the marketing environment in which the Harbin company develops
Following, following the Kotler methodology, an analysis of the environment, specifically the macroenvironment, in which the beer companies in China are developed is presented, as is the case of the Harbin company.
2.1 Political environment
The Federation of Light Industries of China promotes within a context of structural adjustment of the beer industry: “Continue to promote the scale, grouping and modernization of brewers. Companies must unite and develop beers with local conditions in the form of joint acquisitions and participations; do a good job to compete with global brands. ”
The country actively supports the beer industry and brands, urging them to improve production quality, strengthen advertising and expand influence. Serialize and promote brand name products. There is a call to continue developing traditional types of beers but at the same time develop products with different characteristics and flavors, using different technical modifications to make more diversified varieties and satisfy the needs of different consumers.
In general, it can be concluded that the country's laws and policies are conducive to the development of beer companies. The implementation of these policies has greatly promoted the development of the beer industry in China.
Economic environment
Brewing companies have learned and adopted advanced technology for the manufacture and marketing of their products.
With China's accession to the WTO, the country's beer import tariff rate fell from 35% to 12.8%, but the impact on the national beer company was not too great.
After joining the WTO, import tariffs on hop barley, malt beer and other raw materials were also lowered from 35% to 9%, positively impacting procurement and production costs at beer companies.. At the same time, the requirement that beer products have for freshness coupled with restrictions on transportation costs has made it difficult for foreign beer brands to enter China. The rational choice of the main foreign competitors continues to be local production and sales.
Second, reducing the tariffs on products imported into the WTO with the Chinese commitment will help introduce advanced beer production equipment, reduce fixed cost investments, improve quality and raise beer yield.
Finally, joining the WTO helps China's beer companies to integrate with their international counterparts, which will strengthen the experience of exchange and cooperation with advanced international companies, increasing knowledge of international competition.
Of course, they also have a downside, as lower beer import tariff rates, and the limited development potential of the Chinese beer market, will lead foreign companies wanting to enter the country's beer market to establish branches.. Foreign-owned companies have good product quality, a strong fund base and rich management experience, so their presence has further exacerbated competition in the Chinese beer industry.
Social and cultural environment
1) Environment of the population
In general, the proportion of the local population influences the scale of demand in the beer market that has grown in recent years. Beer is classified as a fast-consumption item and its annual consumption is closely related to the structure of the national population. Annual beer consumption is more dependent on young people, middle-aged people and the urban population. Overall, the youth population is increasing, which will promote growth in beer sales. On the other hand, a large number of rural residents are flocking to cities due to the acceleration of urbanization in China and changes in the state of residence will lead to increased beer consumption capacity.
2) Social factors
At the beginning of the 20th century, the average annual consumption of beer was only 8 liters in China. In 2010, the average annual beer consumption had increased rapidly to 24 liters, while the average annual beer consumption was 26 liters. The average annual consumption of beer in the Czech Republic was 163 liters and in Japan, which has similar lifestyles with the Chinese, it also reached 56.8 liters. With the improvement of the level and the change in the consumption habits of the residents, beer has gradually become the most popular drink and sales are increasing.
3) Cultural environment
The culture of distilling alcoholic beverages in China began in the period of the Shang and Zhou dynasties, so it has a long history and tradition. You can see that the drinking culture has become an important part of people's daily cultural life. In daily life, beer is present in all areas. For example, when guests come to visit, it is customary to entertain with beer, it is customary to drink it when doing business, at weddings and funerals. It is said that you cannot live without beer in the country.
As the country has experienced rapid, healthy and economic development, the increasing level of income of residents has accelerated the lives of residents and the pressure has increased. This has led to the emergence of campaigns promoting that drinking helps people refresh their brains and relieve mental stress. Beer is seen as playing a role in improving feelings and has become the bridge and link of interpersonal communication.
In addition, with the improvement of the level and quality of life, more and more people begin to pay attention to health, so the consumption of highly alcoholic beverages such as liquor has decreased significantly. On the contrary, the demand for beer has increased, so the change in people's drinking concept has a positive effect on the development of the beer market in China.
4) Technological environment
The development of the beer industry benefits like any other from the advances in science and technology. With technological advancement, the level of China's beer industry has greatly improved, although the level of manufacturing of beer equipment is still lacking in autonomy and is highly dependent on imported equipment. Currently, the bottlenecks that restrict the development of China's beer companies are: backward equipment technology, low level of mechanical equipment and dependence on imported equipment. Neither quantity nor technology can meet the development needs of this industry. At the same time, this causes the cost of beer production companies in China to be high and the profit of scale is not significant.
In terms of environmental protection and technologies, there is a considerable gap between Chinese beer companies and foreign beer companies. Currently, the Chinese beer companies have not taken the corresponding environmental protection measures in terms of noise, exhaust gases, etc. They have only taken the corresponding treatment of the wastewater. In addition, the beer production team in China is behind schedule, bringing increased consumption of corporate resources and low efficiency by a large amount.
Analysis of the beer market in China
Currently, the production volume of the main national beer production companies is increasing rapidly, and the market share in the country is expanding rapidly.
Listed below are the Threats, Opportunities, Strengths and Weaknesses that mark the development of the beer company in China, especially Harbin, the benchmark of this work.
Market opportunity
The beer market in China is gradually developing in a fair and reasonable direction. After joining the WTO, the tariff threshold is lowered and local protection is halted. In particular, with tax reform, local government financial policies and measures to implement local protection are greatly weakened. Even in this scenario, the broad prospects for the development of the Chinese beer market are full of charm and show a trend of rapid growth. However, the global beer industry has a trend of "competition and cooperation" with the national beer industry. Foreign beer companies use capital as a link to complement each other in the elements of branding, technology and management, thereby achieving resource sharing,market expansion and mutual benefit.
Today, the Chinese beer industry already has strong research, development and production capabilities. Compared to foreign beer companies, domestically produced companies have price and market advantages. The adjustment of the product structure, increasing the scientific and technological contribution has led to an improvement in the management level of the country's beer companies.
Market threats
The beer giants compete with each other. There has been a frenzy of large-scale expansion in the industry that has been destined to develop the international market. Companies that rank as followers in the market are not that large, their corporate structure and policies are more flexible, and sales are more concentrated. Small and medium breweries can develop specialty products such as apple beer, pineapple beer, and seaweed spiral beer according to local resources and consumer demand. The most typical case is that of the health service Beer, Jinchuan, which firmly occupies part of the segmentation of the Chinese beer market with its unique health care functions.
Foreign capital has entered the Chinese beer market, making domestic beer companies, which have been highly competitive now difficult for them to survive and face a new round of reorganization.
The general level of equipment in the beer industry is low and there is a long-term dependence on imports. This situation makes the average cost of production of beer production companies in China higher than that of foreign countries and economic efficiency is not high.
Strengths of the Harbin company as a beer producer
Harbin has unique technology for brewing beer, one of the most advanced in the country.
In its production it uses the freshest rice, the barley imported from Canada that is recognized as one of the highest quality, the finest hops in Germany and the husking of high-quality rice in the northeast in 21 days, so it is can say that Harbin uses first quality raw materials
Its production process carefully integrates traditional classical techniques and unique post-maturation techniques, thus achieving the freshness and smooth flavor that characterizes and identifies Harbin beer.
It has as a strategic partner Anheuser-Busch, the largest beer company in the world that has provided it with a large amount of capital and production management technologies.
"Enthusiasm for a dream" is his catchphrase. Harbin's beer is a well-known brand in China and has worldwide recognition. Its advertising has a great influence, which is why it has become a popular brand.
Harbin company weaknesses as a beer producer
Although the company is recognized, its sales promotion methods are deficient, for a market in which competition is so strong.
Product positioning is unclear and brand differentiation is low. The marketing organization system is not perfect, the organization structure needs improvement, and marketing talent is lacking.
XueHua, Qingjiang, YanJing, DaXue and Harbin's beers account for a large part of sales in their regions. However, Harbin has a high cost of off-site sales and it is unlikely that this beer will have a greater market share.
Harbin Brewing Company Marketing Strategy Analysis
The first step in developing a good marketing strategy is to study your market positioning and determine your target market.
Market positioning
Market positioning refers to the design of the company's products based on the state of competition of similar products in the target market and the degree of importance that consumers attribute to certain characteristics or attributes of the product. The products shape a strong and distinctive personality and vividly convey their image to targeted consumers to gain product recognition. The bases and types of positioning proposed by the Harbin company are set out below.
(1) Basis for market positioning
1 According to the positioning of the characteristics of the specific product
2 According to the specific use of the situation and positioning
3 According to the orientation of interest of the client
4 According to the type of user positioning
(2) Types of market positioning
1 Avoid strong positioning: a positioning model that avoids strong competitors
2 Front position: a way to position the "contradiction" with the dominant competitors in the current market
3 Repositioning: Repositioning of products with low sales volume and poor market response
(3) Positioning strategy:
1, Featured Positioning: Refers to the company's strategy to locate the company's strategy.
2, Positioning of interests: Positioning the products or services of the company in a specific interest.
3, User positioning: positioning a product or service best for certain uses or applications.
4, Positioning of quality or price: Positioning of the company's products or services to provide the best value.
(4) Choice of the target market
Under the economic conditions of the modern market, there are many groups of customers in the market for any product. These have different needs and are scattered across different regions. Therefore, any company cannot satisfy the different needs of all clients. To improve the company's operational efficiency, it must segment the market and determine which market segments to enter based on its own objectives, resources and experience. The following is the selection criteria that the Harbin company must follow to have a successful development.
1) Heilongjiang province is selected as a key market
Harbin's beer has been operating in the Heilongjiang region for many years, which has a good market base in the local area. It has a great reputation among local consumers and has formed a certain brand. It has a market share of approximately 70% in Heilongjiang province. The Northeast China market is also a major source of profit.
From a competitive perspective, the Harbin beer company is a local company that has advantages over its competitors in terms of sales radius, transportation costs, and freshness in the beer it brews.
2) Focus on surrounding cities and rural markets as the focus of the next-step marketing strategy
The Northeast region has a large evolutionary space, especially the market for medium and small cities. Although Harbin's beer market share is not very large, the rural market has great potential. However, due to the low income level of the town at this stage, the beer consumption capacity has not yet been fully released. But, the rural market must be the main market driving growth in beer consumption with the gradual increase in incomes of rural residents. Therefore, Harbin beer should strive to explore the surrounding market while stabilizing the Heilongjiang market.
The marketing strategies followed by Harbin are analyzed below
Product strategy
Harbin Beers initially pursued a competitive pricing strategy. Since 1996, the company has recognized the strong position of popular beer in the Chinese beer market, so it began to change the market strategy and focused on medium and low level beer production.
The company's primary performance is based on product serialization. In a regional market, if Harbin beer wants to become the market leader, you must have a complete product line to back it up. Harbin's beer tends to be localized in high-end products. After several years of expanding development, the product line gradually improved.
In terms of flavor, the lighter flavors that favor beer are in line with the drinking habits of Asians and are not easy to light and can encourage people to consume more beer. The concept of residents in urban markets in Western countries tends to be branded with a focus on refreshing tastes.
Price strategy
Harbin's beer pricing strategy has always focused on a strategy of higher qualities and better prices. Harbin's beer is priced higher to match its brand image with high-end. You have two different pricing strategies to keep the pricing strategy medium and high. This strategy effectively combines Harbin's intangible beer assets with the geographic and price advantages of local brands. At the same time, the correct pricing system strategy plays an important role in the success of the company.
Distribution Strategy
As the only beer brand in China covering the entire country, it is impossible to establish a manufacturer in every part of the country. Therefore, remote or remote delivery will increase the cost of the product. Its direct supply model, "Sales Network", requires higher costs but is effective.
Advertising or promotional strategy
Since the 2006 World Cup, Harbin's beer has become an official NBA sponsor, its advertising strategy has been based on combining everything from pure advertising to the integration of sports and beer marketing.
The beer company Harbin has realized that real sports marketing needs to effectively integrate the demands of sports products and events. You cannot rely solely on advertising blitz, a wide range of integrated marketing tools must be used to establish long-term strategic plans. The company has used sports marketing as an integral part of brand building through the actual use of sports activities to reduce distance from consumers. With this strategy, it has been possible to improve the image of the brand to obtain long-term benefits and not only to meet the temporary popularity and sales objectives.
Final thoughts
With China's deepening accession to the WTO and internal reforms, the macro environment and the industrial trend of the Chinese beer industry are undergoing profound changes.
High-quality products come from strict internal scientific management and efficient external services. A few years ago, the beer company Harbin invested heavily in introducing the test equipment and has managed to have the most advanced beer production in the country. He has led the domestic implementation of complete automation of the production process for the establishment of a complex management system and environmentally friendly production.
Harbin Beer attaches great importance to establishing a complete service system for the market, introduces new concepts and marketing methods while continuing to introduce new products to meet the needs of different consumers through a series of scientific marketing methods..
In recent years, Harbin's Beer has made the company develop rapidly by implementing its brand strategy, establishing a robust and extensible three-dimensional marketing network as well as expanding its business model.
Bibliography
The Harbin Brewing Company Website
www.harbin-beer.com.cn/index.asp
Li Qing chun. <
Li Bozhou, Lv Haijun. <
Guo Guoqing, Liu Fengjun. <
Zhou Zhaori. <
