Analysis of Macro and Micro Environment of Australian Soft Drinks Industry

This report presents an analysis of the macro and micro environment of the Australian soft drinks industry, including the key players, market share, and strategies. It also examines the political, economic, socio-cultural, technological, legal, and competitive factors that impact the industry. The report identifies the target market segments and provides recommendations for segmenting the soft drinks market.

2019
Marketing Stand and Deliver
Assessment 2
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Table of Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................3
Situational Analysis................................................................................................................................3
Macro-Environmental Analysis..........................................................................................................3
Competitive...................................................................................................................................3
Economic.......................................................................................................................................4
Political..........................................................................................................................................4
Legal & Regulatory.........................................................................................................................4
Technological.................................................................................................................................4
Socio-Cultural................................................................................................................................5
Micro-Environmental Analysis...........................................................................................................5
Market Analysis.............................................................................................................................5
Competitor Review........................................................................................................................5
Customer Landscape.....................................................................................................................6
Market Segmentation........................................................................................................................7
Targeting & Recommendations.........................................................................................................8
Segment 1: Younger Children........................................................................................................8
Segment 2: Single People..............................................................................................................8
Segment 3: Children and Teenagers..............................................................................................9
References...........................................................................................................................................10

Executive Summary
This report has presented an analysis of the macro environment and the micro environment for
Australian soft drinks industry. It has focused on the key players in the market and have also
highlighted their market share and strategies. With the same, all the political, economic, socio-
cultural, technological, legal and competitive factors that generally influence the operation and
business of the industry are been taken into consideration in this paper. The young children, the
teenagers and the single people are possibly the best potential target market for the Soft drinks
industry and they will have positive impact on the business of the companies that are working within
the Australian Soft Drinks industry.

Introduction
As the customer environment could only progress into further innovative expectations,
therefore, the soft drinks industry is highly expected to adapt itself rapidly and produce some new
and exciting products. Due to this reason, the soft drinks industry provide a huge range of drinks,
divided into several different categories like juice drinks, carbonates, fruit juices, still drinks and the
bottled waters. In this report, a brief macro environmental analysis of the soft drinks industry of UK
by means of doing PESTLE analysis will be conducted for examining the present market for the
industry. With the same, various customer segments shall be identified along with the segmenting
variables. A situational analysis shall be done initially following the market segmentation. The report
shall end with providing recommendations for segmenting the soft drinks market.
Situational Analysis
Situational analysis refers to a systematic collection and evaluation of the past and the
present political, social, technological and economic data for analysing both the internal and the
external environment of the organisation (Fernando et al. 2016).
Macro-Environmental Analysis
Competitive
The Soft drinks industry of UK has recently been characterised by high level of product
innovation and the challenges by the change in the tastes and preferences of the customers. The
several different health campaigns that are raising the awareness among the people regarding high
sugar consumption have also improved the proliferation of low or no sugar drinks (Briggs et al.
2017). This has increased the competition among the present players in the market. There are
several companies in UK that are considered to be the key players within the industry and they are
Coca Cola, Pepsi Co. and Asahi Group are the top three players in the market. However, following
are the forces that is impacting the competitive factor:
 Presence of rivalry among the existing players
 Bargaining power of the suppliers
 Threat of Substitutes
 Bargaining power of the customers
Economic
Economic factors notably influence the business process of an organisation and at the same
time, also show how profitable they are (Dyllick and Muff 2016). The forces below impact the
economic environment of the Soft drinks industry in U.K:

 Rate of inflation
 Interest Rates
 Rate of exchanges
 Growth in the economy
 Disposable income of the customers or businesses
 Unemployment rate
Political
Political factors are all about the level to which and the way by means of which the government
of the country intervenes the economy (Fukuyama 2017). Soft drinks industry in Australia is highly
influenced by this. The following are the forces that are influencing this factor:
 Foreign trade policy
 Environmental policy like Waste management regulations
 Trade restrictions
 Tax policy
 Political stability and instability
 Food and Drug Administration Regulation (FDA)
Legal & Regulatory
It is the factor that have both the internal and the external sides. There are some laws that
influence the business environment in some national while there are some other policies that the
companies themselves maintain for their personal purpose. Some of such laws that influence the
environment of soft drink industry of Australia are mentioned below:
 Safety Standards
 Labour laws
 Consumer protection laws
Technological
According to (), technological factors pertain to innovations in the technology which impact
the industry operations as well as the market, both favourably and unfavourably. They influence the
decision of new firms for entering into the industries or launching new products in the market.
 Automation
 Level of technological awareness
 Research and development
 Innovation level

Socio-Cultural
The socio-cultural factor shows the demographic characteristics such as the values, the norms,
beliefs, customs, and the demographic characteristics in which the firms operate. It scrutinize the
social environment of the market as well as gauge the determinants such as population analytics,
cultural trends, demographics etc. (Aniza, Norhayati and Norfazilah 2017). Below mentioned are the
forces that influence this environment factor:
 Diet Craze
 Consumer Preferences
 Buying trends
 Social media outlets
Micro-Environmental Analysis
Market Analysis
Market Size- As per 2014, the market size of the Australian Soft drinks industry was 9.3 billion GBP
and it is continuously growing. At present it is 11.8% (Neves, Gray and Bourquard 2016).
Growth- the Australian market for Soft drinks is growing at a rate of 3.4% CAGR over the last
forecasted period. It is also to note that the carbonated soft drinks market in Australia has been
shrank by 5.9% in the year 2017 for reaching the value of 4956.2 million.
Future Outlook- As per Ibrahim (2018), the market size of the soft drinks industry in Australia is
expected to reach 4994.9 million and 5,813 million USD by 022 and 2025 respectively.
Key trends- Establishing crafts is the key trend in the present Australian soft drinks industry. Also,
there are many developments made in the industry in order to acknowledge the every increasing
health concerns of the consumers that is rapidly driving the industry growth. Furthermore, it is also
to note that the advancements such as the quality check labels as well as the sugar free soft drinks
are also rapidly increasing the customers’ spending on the Australian soft drinks.
Competitor Review
Key Competitors Types of Competitor Market Share of the
competitor
Key Strategies used
Coca Cola Manufacturer,
markets and
distributes the non-
alcoholic beverages
54% It offers more than 4k
beverage products
including about 1300
no and low calories.
Also, it classified its
product offerings into
finished product
operations and

concentrate
operations.
Asahi Group It has Beer brewing
business; it
manufactures, Retails
and market soft drinks
17.5% It operates through
soft drinks, alcoholic
beverages, food. It
operate overseas.
Pepsi Co. Global food, beverage
and snacks supplying
organisation
11.8% It conducts several
R&D activities and also
invests in process of
innovation world-
wide.
Customer Landscape
Who is in the market and what is the extent of
their power with regard to the organization?
The different food processing firms, suppliers,
distributors and the manufacturers are in there
the market.
The bargaining power of the distributors,
suppliers, food processing firms and
manufacturers is very strong within the
industry as the whole business relies on
outsourcing.
What do they buy? Alcoholic beverage, non-alcoholic beverage,
foods, no or low calorie products, snacks, soft
drinks
Why do they buy? They buy them as they are preferred and
demanded by the customers.
Who is involved in the buying? The perception of the family members, friends,
peers, advertisements and marketing
How do they buy? They buy them through exchange of money
through online, offline stores and restaurants
When do they buy? They buy them as per their requirements such
as parties, events, entertainment,
refreshments, summer season etc.
Where do they buy? Restaurants, coffee shops, shops, malls

What are the customers’ ‘hot’ and ‘cold’ spots? Hot spots- Tastes, energy, refreshment
Cold spots- High Calorie, Sugar content, diet
craze
Market Segmentation
Market Segments
Segment Descriptio
n of
Segment
Demographic Geographi
c
Behavioural Psychogra
phic
Segment
Attractivenes
s
Children
and
teenager
s
The
children
and
teenagers
are the
ones from
11 to 18
years.
Their
preferenc
e are
generally
influenced
by their
parents.
Age- 11 to 18
Occupation-
study
Sex- Boys and
girls
Australia Tastes
New Users
Cool
Youthful
Medium
attractivenes
s
Younger
Children
The
younger
children
belonging
from age 4
to 10
years.
Age- 4 to 10
Occupation-
Study
Sex- Both boys
and girls
Australia Parties
Tastes
Youthful
Tasty
Cool
Medium to
high
attractivenes
s
Single
People
People,
who are
not
married
and
belong
from 21 to
27 years.
Age- 21 to 27
Occupation-
Working
Sex- male and
female
Level of
income- more
than 1k dollars
Australia Parties,
Benefits
Taste
Loyal
customers
Cools
Youthful
Energetic
Party-
freak
High
attractivenes
s
Married Married
ones have
family and
they
usually
income
more than
Age- 27 to 35
Occupation-
Business man
and woman,
working
Level of
income- 5k
Australia Parties,
Benefits
Taste
Loyal
customers
Party-
freak
Personal
& family
parties
Medium to
low
attractivenes
s

the rest
others.
dollars to 5
lakh dollars
Targeting & Recommendations
Segment 1: Younger Children
Criteria Size- Youths should be the major target for the soft drinks company.
Difference- They fall in the ethnic minority group
Money- Their usually do not earn and hence, need to depend on their parents for economic and
financial support.
Accessible- Easy
Focus on different benefits- They have different demographic, psychosocial, and geographic
characteristics. There is a notable increase in their market size. They have significant economic
impact.
Justification- They are the most attractive market segment. Soft drink industry is basically a child-
focused industry. Youth have special demographic, psychosocial, and geographic characteristics.
There is an increase in their spending in recent years and at the same time, have changed their
media use patterns. With the same, they also have a notable impact over the broader youth culture.
They would like different flavours
Segment 2: Single People
Criteria Size- Large
Difference- Single people are party-freaks and they usually do not have the responsibility of the
world over their shoulder. They have source of income. Also, they seem to be drinking more than
the married ones.
Money- Can afford buying drinks easily
Accessible- Easily accessible
Focus on different benefits- As per the recent reports, about 32% of the Australian demography is
composed of single people. This is making the single people, the best target market. They would be
very beneficial for the industry as they ensure more market share and help in earning revenue.
Justification- Single people drink more than the married ones. They tend to part hard, go for more
outings and need more source of entertainment and refreshment. They earn and can easily afford to
buy cold drinks of different flavours.
Segment 3: Children and Teenagers
Criteria Size- Large
Difference- The difference is in their age and their likelihood of trying new things.
Money- The product price should be kept affordable for the purchase making of the children and
teenagers. As they do not earn and have no source of income. They have to depend on their parents
for buying things that they like.
Accessible- Easily accessible

Focus on different benefits- They are new channels. They have frequent, interactive and sustained
engagement with the brands and products.
Justification- there is a considerable and increasing buying power among the children and teenagers.
With the same, they have an increasing influence over their parental purchases. They make use of
media heavily and easily adopt new media technologies, like Internet and cell-phones. This provide
additional marketing channels.
References
Aniza, I., Norhayati, M. and Norfazilah, A., 2017. Development and validation of A Questionnaire on
Socio-Cultural Factors Among The Orang Asli and General Population in Selangor. Malaysian Journal
of Public Health Medicine, 17(2), pp.140-150.
Briggs, A.D., Mytton, O.T., Kehlbacher, A., Tiffin, R., Elhussein, A., Rayner, M., Jebb, S.A., Blakely, T.
and Scarborough, P., 2017. Health impact assessment of the UK soft drinks industry levy: a
comparative risk assessment modelling study. The Lancet Public Health, 2(1), pp.e15-e22.

Dyllick, T. and Muff, K., 2016. Clarifying the meaning of sustainable business: Introducing a typology
from business-as-usual to true business sustainability. Organization & Environment, 29(2), pp.156-
174.
Fernando, R., Ranchal, R., An, B., Othman, L.B. and Bhargava, B., 2016, June. Consumer oriented
privacy preserving access control for electronic health records in the cloud. In 2016 IEEE 9th
International Conference on Cloud Computing (CLOUD) (pp. 608-615). IEEE.
Fukuyama, F., 2017. State building: Governance and world order in the 21st century. Profile Books.
Ibrahim, O.O., 2018. D-Tagatose: A New Low-Calorie Sweetener from Lactose in Cheese Whey as a
Nutraceutical Value-Added Product. In Food By-Product Based Functional Food Powders (pp. 207-
224). CRC Press.
Neves, M.F., Gray, A.W. and Bourquard, B.A., 2016. Copersucar: A world leader in sugar and
ethanol. International Food and Agribusiness Management Review, 19(1030-2016-83127), p.207.