Schneider beer belongs to the CCU company. This company has extensive know-how conferred by its 150 years of beer tradition in Chile.
CCU entered the competitive and concentrated Argentine market in 1995 developing an expansion plan that aimed, first, at the acquisition of regional breweries to build a firm business base, and then, at the creation of an alliance with a global strategic partner allowing the introduction of a major international brand.
Both purposes were achieved through the purchase of the traditional breweries in Salta, Santa Fe, and later, the fixed assets of the former Córdoba brewery, in addition to the completion of a joint venture with the North American multinational Anheuser-Busch (AB) to produce, market and distribute the prestigious Budweiser beer in Argentina.
marketing-plan-beer-schneider-1Price strategy
Schneider is positioned as the affordable and fair-priced beer of choice for beer-savvy consumers. The consumer price is approximately $ 1.50.
In the case of the city of Buenos Aires and Gran BS AS, the brand only tried to consolidate itself as a low-price brand, with the aim of obtaining some part of the enormous volume that moves this territory, the one with the largest population in the country. The main reason why such a decision was made at the time is the impressive competitive war between companies and brands such as Quilmes, Brahma, Isenbeck and Budweiser, which deployed all their know-how and marketing resources to conquer the most important market in the world. Argentina. Schneider was in no condition to be part of that war.
Communication strategy
We did not find data on the communication made by CCU for Schneider before 2001. An email was sent to CCU to have this data.
Evolution of sales
Schneider-specific sales data not found.
Analysis of the external situation
Market
The Argentine beer market had a total consumption in 2000 of almost 1,232 million liters, which corresponds to approximately 33 liters per capita. Due to the difficult economic situation that this country has faced during the last two years, the beer industry, which until 1998 grew at rates close to 4.2%, has observed a decrease, scoring in 2000 a fall of 2.6% versus 1999. Added to this, as of January 2000, a significant increase from 4 to 8% in the specific tax rate on beers, affecting the final results of the entire beer industry.
When analyzing leadership in Argentina, as in most American countries, there is a brand or company of national origin with a strong market share despite the arrival of international competitors. On the other hand, success in this business depends on mastering key factors such as distribution, marketing, and production.
Consumption habits
- Men: traditional beer consumer. There has been an increase in consumption by young people in recent times. Women: more recent incorporation as a strong consumer, especially in young women. It assumes a character of emancipation when it is associated with consumption in public (young and older women). Greater consumption occurs on weekends. In general in meetings with friends. Consumption occurs mainly in "picadas" and in less in meals.
According to the information provided by the CCU marketing manager, we conclude that it is difficult to identify the beer consumer with a certain social class, since its consumption is widespread in society. The segments are differentiated by the brands consumed. Level ABC1 is characterized by consuming premium and imported brands; The C2C3 segment, the largest consumer, chooses national brands, the cost-benefit being decisive in their choice, since for a modest price they acquire a rich product. The lower class bases their choices on the price factor.
The majority age group is between 18 and 45 years old, with the youngest group (up to 25 years old) being the largest consumers.
In general, the beer consumer does not demonstrate a very pronounced brand loyalty, but mainly selects and evaluates the product through its taste. On the other hand, it is a drink closely related to the night, family and friends gatherings, celebrations and shows.
Commonly, this product is consumed in pubs, clubs, bars, restaurants and at home, it is purchased in kiosks, in the place where it is consumed and the supermarket.
Regarding the purchase, it is generally decided at the time of consuming the product.
Regarding the packaging, the consumer values what provides greater comfort. Thus, it prefers elements such as the screw cap or "easy open" and returnability.
Consumption situations
- Adult men: at home, in bars, with friends, anytime. There is also consumption in solitude. Young men: group use, as a couple, sometimes sporadic, consumption alone is almost nil. Adult women: at home, with friends, in bars, very sporadic. Young women: markedly in weekend outings, group or couple.
Characterization of the beer sector
The beer sector was historically characterized by the strong concentration of sales in the hands of a few companies, showing a slow but constant growth since the mid-1980s.
Quilmes participated with 81% of the production and the rest was distributed between Bieckert (currently belonging to Quilmes), Córdoba brand in the Center, Santa Fe brand in Litoral, and Salta brand in NOA.
The changes in consumption habits from the 90s, when there was a growing trend towards beer consumption, generated a strong expansion of the sector, causing an unsatisfied demand, especially in the summer season.
Starting in '94, the landing of new companies began, starting with Brahma and Isenbeck, followed by CCU
The per capita consumption of 33 liters, in the year 2000, could increase as a consequence of:
- Increased supply pressure New alternatives in terms of brands and flavors (Light, alcohol-free, more alcohol content) Fall in the consumption of common wine Incorporation of new consumers (young people and women) and an increase in heavy (+ de one liter), before alternatives of softer products.
Analysis of the industrial sector
Degree of concentration of the beer sector:
The Argentine beer sector can be considered as concentrated since there are few companies that have a high market share, with the rest being divided into a large number of smaller competitors.
Market share:
- Quilmes Brewery and Malt: 66% Brahma (Ambev): 16% CCU: 11% Isembeck: 7%
Size and importance of the sector:
The importance of the beer sector with respect to Argentine GDP allows us to classify it as a Consolidated Strategic sector due to the fact that mature, capital-intensive technologies are exploited and that its production has a constantly growing demand. Due to this, the most important companies take over a large market share and ensure future demand. Its share in global beverage consumption is 13%.
Industry life cycle:
It is worth mentioning that the Beer Sector in Argentina is in the Maturity stage. This stage is characterized by a high level of competition, which can be explained by the following reasons:
- Large number of competitors involved in the sector Sales level in slight growth or practically stabilized. This fact is reflected in that the average annual growth of the sector is approximately 3%. Intense competition in prices, with increasingly subtle differences between the products. As a consequence of the previous point, strong investments are made in promotion and advertising, having as objective the differentiation and the preservation of the loyalty to the brand.
Structural analysis of the sector for Argentina:
Threats of entry:
As this is a highly concentrated sector, where there are very few companies, the entry barriers to it are high due to:
- Product differentiation: This is mainly due to the loyalty of customers to different brands, as can be seen in the case of Quilmes beer that its market share is greater than 60% and the rest of the market is distributed among the remaining brands. Capital requirements: In relation to the previous point, it can be seen that for a new company to want to enter this sector, it will have to pay large amounts of capital if it wants to develop an aggressive strategy of penetration in the market. Access to distribution channels: As this is a product for mass consumption, the new company must be able to develop an adequate distribution channel to ensure that the product reaches the customer.
In general, the strategy of most companies to enter the Argentine beer market consists of acquiring existing national companies in order to thereby reduce the risks involved in setting up a new company in the country.
Existing competitors:
This sector is very competitive due to the fact that there are very few companies that manage the market, but the presence of Quilmes stands out, who, having the largest Market Share, is the one who generally imposes its leadership by coordinating the beer industry through different strategies.
Mainly, the strategies of the different companies are based on the management of the following variables:
- Promotions Product differentiation.
Substitute Product Pressure:
To begin this analysis, we will define substitute products as those that can perform the same function as the product in the industrial sector, so we can define beer according to the meanings associated with it:
- The meeting / gathering of friends, the social. Soccer, passion and popular identification. The youth / bowling soft drink, adult soft drink function. The moment of relaxation, rest, pause.
From this analysis, we can identify the following substitute products:
- Common table wineAperitifs with alcohol.
These products are considered for mass consumption, in which the socioeconomic level is not seen as an important segmentation variable. In general, they do not represent a great threat to the beer sector since beer has a high participation in the beverage sector (approximately 13%). The increase in consumption comes at the expense of the drop in consumption of common table wine.
Bargaining Power of Buyers:
The main buyers of this product are the final consumers, who are increasingly demanding, looking for better prices, quality and greater variety. In general, they have high negotiating power since they can change brands if they are not satisfied.
Other important buyers are hypermarkets and large supermarket chains, who make purchases in large volumes, which allows them to have great bargaining power, since they are the ones who establish the payment terms, distribution of physical spaces, etc. As a consequence of this, many times companies, in order to have a presence in these businesses, must adapt to these requirements.
Independent distributors can also be mentioned, who are divided into geographical areas, not having exclusivity in the same, which considerably reduces their negotiating power.
Bargaining Power of Suppliers:
In general, the main raw materials for the production of this product are malt, drinking water, high maltose corn syrup, hops and yeast. It can be said that suppliers do not have great bargaining power since, as the Beer Sector is very concentrated, they do not have many customer options. Between Quilmes and Ambev, they own 70% of the malt production, so if the merger between these two companies were to take place, the supply of this input would be highly concentrated, which is why the rest of the companies Brewers will lose great bargaining power with these suppliers.
Analysis of strategic groups
To analyze the map of strategic groups in the Argentine beer sector, a practical work carried out by students of the Faculty of Economic Sciences (1) was taken as a basis, where it is noted that the main beer brands that exist in the country are Quilmes, Brahma, Isenbeck and CCU (which manufactures Budweiser among other brands).
Map of strategic groups:
We can point out that the Quilmes brand belongs to the A1 strategic group, since it has a high national geographic coverage (64.60%) and large investments in marketing.
We place Brahma in the strategic group A3, as a consequence of the fact that this brand has strong investments in Marketing and has a reduced geographic coverage (16.90%).
Finally, and in relation to Isenbeck and CCU, we can highlight that, since they share approximately 20% of the Argentine market and do not present large costs in Marketing, they are located in the strategic group C3.
Competition
- Quilmes
Quilmes beer belongs to the company Cervecería y Maltería Quilmes. The Argentine brand has been around for more than a century. The non-alcoholic drink was born in 1888 by the hand of its founder Otto Bemberg. The beer owes its name to an old town whose name is based on an aboriginal town that inhabited present-day Argentina: Quilmes. Currently, the Cervecería y Maltería Quilmes –the traditional Bemberg group– has plants in Zárate, Llavallol, Corrientes, Mendoza and Tucumán, with a sales volume in Argentina of $ 564.4 million only in beers. But it took several decades for Quilmes beer, with a series of successful advertising campaigns and some background mishaps, to become the favorite brand of Argentines. Nowadays,The data indicate that Quilmes has a participation of between 60 percent and 65 percent of the Argentine market (the percentage figures vary according to the inclusion, or not, of the entire product portfolio of the company). The other brands produced and distributed by Cervecería y Maltería Quilmes are: Andes, the traditional Bieckert, the Dutch Heineken, Iguana, Imperial, Liberty (non-alcoholic beer), Norte (in its three varieties: White, Luxury and Black), the Palermo black beer, Quilmes Light and Quilmes Bock.Liberty (non-alcoholic beer), Norte (in its three varieties: White, Luxury and Black), Palermo black beer, Quilmes Light and Quilmes Bock.Liberty (non-alcoholic beer), Norte (in its three varieties: White, Luxury and Black), Palermo black beer, Quilmes Light and Quilmes Bock.
The image of Quilmes
The image of Quilmes beer is made up of: the label with two light blue stripes and a white one in the middle, the Quilmes logo in black letters, underneath the word Cristal and, finally, a dark glass container that reinforces the yellow of Beer. Elements that are part of the Quilmes symbolism: the white foam, the chopp with the handle of the Q, the yellow color of beer, the one-liter Quilmes, the brand's now light blue color, the can cap and its subsequent noise of uncapping the bottle.
The brand began to associate itself with one of the most traditional values in Argentina: soccer. Quilmes' strategy and its alliance with sports clubs include sponsoring sporting events, club-related promotions and advertising on T-shirts.
According to data from Quilmes, the company annually invested an average figure of US $ 2.5 million for advertising in soccer. But the relationship with sport does not end with football, Quilmes also makes alliances with rugby or horse riding. At present, Quilmes is the official sponsor of the Argentine Soccer Team.
Currently his advertising agency is Young & Rubicam.
Quilmes' great achievement was to adapt to new consumer trends such as "light" and to get closer and closer to the consumer and Argentine taste, to the point that today the Quilmes brand is synonymous with Argentina. In his continuous search, he made important modifications: Quilmes's label is currently light blue and white, like the colors of the Argentine flag.
To reach this point, Quilmes had to know how he thinks and see what the typical Argentine customs are in relation to beer consumption. Quilmes' advertisements show what that relationship is like.
2. Brahma
Brahma beer is from the Brahma Brewing Company. It is of Brazilian origin and entered the Argentine market in the early 1980s as imported beer, but it was only a decade later that the Brahma Beer Company decided to manufacture the product locally.
The first investment of Compañía Cervecera Brahma was in 1993: to set up its own distributor in Argentina. The following year, Brahma built its first industrial plant outside of Brazil, in the town of Luján, province of Buenos Aires. Currently, the Brahma brand occupies a second place in the Argentine beer market with a market share of 17 percent.
Strategies: the great landing of Brahma
The Brahma brand was already a product known by Argentine consumers for all those people who vacationed on the beaches of Brazil, for the beach promotions with T-shirts and hats and for the different advertisements that came from Brazil. Brahma had a point in its favor: Argentine consumers already knew the brand. But this was not enough to reach the bulk of the population. To access the taste of the local consumer, Brahma's first strategy was to increase beer production in one-liter bottles, unlike in Brazil, where consumption is more oriented to cans and ½-liter bottles. The main strategy was to reach the consumer with low prices. The advertising campaigns were thus accompanied by promotions and discounts.
Brahma's image was developed by the agency Savaglio TBWA (Currently his agency is CraveroLanisEuro RSCG -ex of Budweiser), which works the slogan “Indulge yourself”. From the graphics the consumer is invited, with phrases such as Cry, Give yourself a treat and the image of the beer can full of droplets, with a large drop that slides down the far right like a tear.
Brahma is aimed at a more transgressive young audience, without inhibitions to enjoy small pleasant moments.
Brahma has not abandoned promotional strategies - such as the sale of a six-pack of canned beers and two porcelain cup holders - because it has had very good results, both in the Federal Capital and in the Interior. A very important piece of information is that the Brazilian brand is widely accepted in major cities such as Corrientes, Mendoza and Rosario, as well as in the northern region of the country.
- Isenbeck
Isenbeck beer is from Cervecería Argentina SA (CASA). Isenbeck arrived on the local market in 1994, but the origin of lsenbeck beer dates back to 1769, when in the Westphalia region, more specifically in the town of Hamm, Mrs. Cramer began to manufacture it.
In Argentina, CASA manufactures and markets the entire Isenbeck line in its different sizes, from the five-liter barrel to the 354 cc can and the returnable and non-returnable containers. The second big brand is Isenbeck Premium Dark. The CASA group is also responsible for the development of the Diosa Tropical and Carrefour brands, but not their distribution and marketing.
Isenbeck is a Premium beer made with natural ingredients without chemical additives. The colors of the label are white at the top and yellow at the bottom, the brand's logo is the rider on horseback and the brand's logo is in red letters. The packaging is made of dark glass and, like wine bottles, has a white label with a green stripe on the neck. The constitution of the Isenbeck image is made up of the white foam, the horse and the logo.
According to estimates, Isenbeck had between 7 and 8 percent of the beer market in Argentina (the numbers vary according to whether the national level or only Buenos Aires is taken into account). At first, the advertising strategies focused on the launch of Isenbeck in Argentina, highlighting the 'Premium' attribute of the beer. Once the image of the brand was established in the local market and consumers began to recognize the brand, Isenbeck was testing new strategies to connect consumers with the brand.
Isenbeck's main strategy, which has given it very good results and even international awards, is innovation and product launches. In September 1998, Isenbeck launched its new packaging on the market: beer in a 355 cc bottle, long neck type, with a twist-off cap (that opens when you turn it) This new packaging is aimed at young consumers who are looking for practicality in the size of the container.
In 1999, the great achievement of Isenbeck was to launch a new container for the traditional liter bottle: a non-returnable container with a screw cap was presented. Isenbeck's image for this release was developed by the McCann-Erickson agency. The Tapa Rosca advertising campaign appealed to the resource of humor.
- Budweiser
In 1996 Anheuser-Busch arrived in Argentina, first in the world ranking, which manufactures Budweiser, one of the brands with the greatest international presence. Budweiser's landing occurred with an initial investment of 80 million dollars in the Santa Fe plant of Cervecerías Santa Fe, belonging to Compañía Cervecerías Unidas (CCU) of the Chilean group Luksic, in which the famous American brand began to be produced..
Regarding the development of regional brands, Thomás Siedmann, CCU marketing manager, clarifies that “Budweiser is our flagship, but we defend regional brands to the death, which have great growth potential, due to the strong bond they establish with local consumers.
Promotional and event strategies are very important for regional brands.
For parent company Anheuser-Busch, the goal was to make Budweiser an international brand, in the best Coca Cola way. But trying to sell a typically American brand to the Argentine public was challenging. From the beginning, the production of Budweiser in a 1-liter container and a long neck of 355 cubic centimeters was focused, while the can format was left for import. Currently the 355cm can is manufactured in Argentina.
Promotional strategies for Budweiser occupy a place of importance.
An example of this was the last move of the summer of 2000, when the brand bet with a figure of 200,000 dollars to have a strong presence on the beaches of Punta del Este, Uruguay. The main objective of the Parador Budweiser was not the sale of beer, since the municipality prohibits the sale of beer and alcohol because buildings of this type - made of wood - are extremely flammable, but rather "to strengthen the brand presence and add new consumers."
It also sponsors extreme sports events such as Snowoard, Mountain Bike, Wakeboard, etc.
2nd stage: Strategic diagnosis
THREATS:
- Economic recession and instability of the political context in Argentina, for which consumers have become more sensitive to price due to the loss of purchasing power. The entry, in recent years, of new companies into the sector, has intensified competition; For this reason, strong control of the policies to be applied is necessary, taking care not to generate a price war Possible mergers of competing companies, which would allow them to achieve greater economies of scale in various aspects, such as production, communication and distribution, thus weakening Schneider's market share.
OPPORTUNITIES
- Market expansion, due to the fall in wine consumption Due to the intense recession in the country, the number of consumers who decide to buy based on price increased.
STRENGTHS
- CCU's experience in the beer market Solid presence in the interior of the country Wide distribution network, which allows it to cover the entire national territory
WEAKNESSES
- Little awareness of the brand, mainly in the province of Buenos Aires. Weak brand image, especially in Capital Federal and Greater Buenos Aires. Lack of a solid position. Lack of communication with the market.
3rd stage: Formulation of the marketing objectives to be achieved
- Repositioning the Schneider brand in the Federal Capital and Greater Buenos Aires markets. Growing in the Federal Capital and Greater Buenos Aires markets.
4th stage: Preparation and choice of the marketing strategies to follow
Portfolio strategy
According to Ansoff's growth matrix, the strategy used for Schneider is MARKET PENETRATION, because it tries to increase its sales in current markets, by increasing its market share (attracting buyers of competing brands for important communication actions).
|
Current | New | ||||
| Current | Market penetration | Development of new products | ||||
| New | Development of new markets | Diversification |
Segmentation and positioning
Schneider decided to implement a new segmentation, taking part of the segment led by Brahma, targeting rational consumers, who value a well-known brand with standard quality and accessible price.
The chosen positioning was based on the product, denoting that what matters is beer.
Functional strategy
- Communication strategy
Repositioning Schneider by giving it a brand character, a product ideology and its own imaginary.
- The pricing, product and distribution strategies are the same as used so far.
5th stage: Actions or action plans
To develop the communication strategy, the Diálogo advertising agency was selected (with Gustavo Serrano as art director). This agency decided to base the campaign on radio spots, using the character Flavio Pedemonti (well-known protagonist of the Todo X $ 2 program).
- Communication objective: "break the batch with a disruptive message, an authentic and original character, avoiding saturation through the variety of commercials." Target audience: young people and adults of all socio-economic levels. Message: The idea was transmit the concept of "what matters is beer", seeking that the consumer distance himself from the "advertising game" and discover the essence of beer. Medium: a single medium, radio, was used to focus resources and increase effectiveness. 40 advertising pieces were aired, where the consistency of the message was maintained. In total some 70 radio phrases were made, all with the closing "what matters is beer" Investment: 750,000 pesos
It was a campaign with a lot of rotation, renewing itself so that people ask themselves “what will Pedemonti say now?”.
According to Gustavo Serrano, the idea of summoning Flavio Pedemonti for this campaign arose from the complexity of the case they were presented with. They first looked at the beer market in general, where they came across some interesting data. One is that quality is not considered a relevant attribute among communication values. Instead, the origin is used as an argument for ranking the beer in other brands, be it North American, German or Dutch. In addition, they found that the average consumer believes that the low price of a beer defines its quality.
The product they had to relaunch did not conform to any of these trends: it is a very good quality beer, with a brand that, although it has German reminiscences, is national and has a relatively low price. It was also a brand without history or positioning; he was defending himself in the gondola for the product itself. So they took advantage of the fact that they weren't positioned to position the brand, in some way, against established advertising stereotypes. As a talking voice of communication, they wanted to find an “under” person, who could take that speech; this idea could not be realized without a character “made from below”.
- Schneider was able to establish a place in the competitive market of beers sold in Capital and GBA. The results were excellent: in September 2001 the brand had a 2.1 percent market share and in November a 4.1 percent market share.. In 90 days it was third in supermarket sales, behind Quilmes and Brahma. A high degree of brand recognition was achieved. A high rate of acceptance of the product was obtained. It was possible to build imaginary wealth to the brand, strengthening and reaching presence, even at the level of the big brands. For the communication campaign carried out, Schneider won the Silver Mercury Grand Prize, awarded by the Argentine Marketing Association. CCU 2002 Annual Report "Official Gazette". Chamber of the Argentine Beer Industry. December 2001."The Argentine Consumer of 2000". Market Magazine. June 2000. Argentina.Document “Report on Drinks”, prepared by the Secretariat of Agriculture, Livestock, Fisheries and Food of the nation. Work of strategic groups carried out by this group for this chair. Practical work on the beer sector, carried out by the student Santiago Martín, for the Chair in Business Strategy.quilmes.com.ar "Beers fight the market." Clarín newspaper. June 14, 1997. Argentina.quilmes.com.ar "Beers fight market." Clarín newspaper. June 14, 1997. Argentina.quilmes.com.ar "Beers fight market." Clarín newspaper. June 14, 1997. Argentina.
SCHNEIDER BEER MARKETING PLAN
Contributed by: Peralta, Romina Severin, Florencia Turco, Pamela
(1) Practical work (Structural analysis of the beer sector) carried out by group No. 9, made up of the following students: Angerosa, Aquino, Elías, Galán and Goicouria. Chair: Business Strategy. Teacher: CPN Francisca S. de Dusso.
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