Macro and Micro Environmental Analysis of Soft Drinks Industry in Australia

This paper provides a brief analysis of the macro and micro environment for the soft drinks industry in Australia, including key players, market share, and influencing factors. It also identifies potential target markets and provides recommendations for segmenting the 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.......................................................................................................................................3
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........................................................................................................................0
Targeting & Recommendations.........................................................................................................1
Segment 1: Youths.........................................................................................................................1
Segment 2: Single People..............................................................................................................1
Segment 3: Children and Teenagers..............................................................................................1
References.............................................................................................................................................3

Executive Summary
This paper has been elaborated on presenting a brief analysis of the macro and micro environment
for the soft drinks industry of Australia. It has highlighted the key players within the industries along
with their market share, the strategies that they use along with their type of business. Also, all the
political, economic, socio-cultural, technological, legal and competitive factors that are likely to
influence the industry are also highlighted in this paper. It is to note that as per the marketing
segmentation, it has been identified that the youth, the teenagers and the single people are likely to
be the best potential target market for the industry as their characteristics and the advantages that
they possess do will positively impact the business of the companies working within the industry in
Australia.

Introduction
This report shall elaborate on performing a macro environmental analysis of the food and
beverage industry using PESTLE analysis in order to examine the current market for Soft Drinks. It
would identify and describe the various segments along with the segmenting variables that are used
within the industry. Firstly, a situational analysis of the industry shall be conducted, within which the
macro-environmental and the micro environmental factors that are affecting the industry would be
presented. Lastly, how the industry conducts the segmentation shall be analyzed. At the end of the
report, several sets of recommendations for segmenting the market for Soft Drinks.
Situational Analysis
Situational analysis is a collection of all the methods that the managers make use of for
analysing the internal and the external environment of the organisation for understanding the
capabilities, customers and the business environment of an organisation (Van Velsen 2017). Below is
presented a brief overview of the macro-environmental and micro-environmental analysis of the
food and beverage industry that are likely to influence the market for Soft Drinks.
Macro-Environmental Analysis
The following section identities and explains the impact of key variables in each of the
environmental factors impacting the industry.
Competitive
The Food and beverage industry is major industry in Australia in terms of employment and
financial contribution (Sheldon and Erdogan 2016). It is worth 60 billion dollars. The industry is not
growing rapidly. This is making it difficult for the new entrants to enter into the market for
competing with the already existing companies in the industry. Following are the forces that is
impacting the competitive factor:
 Rivalry among the existing players in the market
 Bargaining power of the suppliers
 Bargaining power of the customers
Economic
The economic factor refers to the determinant of the performance of the economy. Following
are the forces that is impacting the Economic factor are mentioned below:
 Inflation Rates
 Interest Rates

 Exchange Rates
 Economic growth
 Disposable income of the customers
 Rate of unemployment
Political
The political factors refers to the factors that are all about the extent to which the government
interferes in an economy or within an industry. Food and beverage industry in Australia is greatly
influenced by the government intervenes (Mialon et al. 2016). Following are the forces that are
impacting the political factor:
 Foreign trade policy
 Labour law
 Environmental policy like Waste management regulations
 Tax policy
 Food and Drug Administration Regulation (FDA)
Legal & Regulatory
It is to note that the legal factors are to some extent overlap with the other political factors.
However, it should be noted that the difference in between them is for the fact that legal factors
include more specific laws. Some of these laws or factors that is impacting the environment of food
and beverage industry in Australia are mentioned below:
 Food and Drug Administration Regulation (FDA)
 Consumer protection laws
 Health and Safety laws
Technological
The technological factors are the factors that pertain to innovations in the technology which
might influence the industry’s operations as well as the market both favourably or unfavourably.
They have the potential of influencing the decision of the new companies to enter into the industries
or launch new products.
 Research and development
 Automation
 Innovation level
 Technology incentives
 Technological change

Socio-Cultural
This factor represents the demographic characteristics like the values, norms, beliefs, customs,
and demographic characteristics in which the companies operate (Pettigrew et al. 2015). Following
are the forces that impact on this environment factor:
 Diet Craze among the customers
 Consumer Choice
 Social media outlets like Twitter, Facebook or Instagram
 Global outreach
Micro-Environmental Analysis
The following section will analysis the key market and industry variables, an overview of
competitors and current customers within the market.
Market Analysis
Market Size- As per 2017, the average revenue per capital of the Soft drinks industry in Australia was
amounted to 190.9 USD and at the same time, the average volume per capita was 129.16 litres (Rich
2018).
Growth- It is growing at the rate of 3.4% CAGR over the forecast period.
Future Outlook- According to Chepulis et al. (2018), the market size of the Australian soft drinks
industry is set to reach about 5,813 million USD by the year 2025.
Key trends- At present, the key trend in the soft drinks industry is that of establishing crafts. With
the same, there are developments made in the soft drinks for acknowledging the increasing health
concerns of the customers is also driving the growth of the industry. Moreover, the advancements
like the quality check labels, and sugar free soft drinks are also increasing the spending of customers
on the soft drinks in Australia.
Competitor Review
Competitors Type of Competitor Market Share Key Strategies
Coca Cola Multinational
Manufacturer,
Retailer and the
marketer of the non-
alcoholic beverage
syrups and
concentrates
54% It classifies its business
into Coffee
Beverages,, Alcohol
and food and services
Asahi Group Beer brewing
business;
17.5% It operates through
soft drinks, alcoholic

Manufacturer,
Retailer and the
marketer of soft
drinks
beverages, food and
overseas.
Pepsi Co. Multinational food,
beverage and snack
corporation
11.8% It conducts different
R&D activities and
invest in innovation
world-wide.
Customer Landscape
Irrespective of whether the marketing planner is operating in a consumer, industrial or
organizational market, there are eight questions which underpin any understanding of buyer
behaviour.
Who is in the market and what is the extent of
their power with regard to the organization?
Food processing companies, suppliers and
distributors and manufacturers are in the
market. The bargaining power of the suppliers,
food processing companies and the distributors
and manufacturers is strong as the entire
business is dependent on outsourcing.
What do they buy? Drinks, alcoholic beverage, non-alcoholic
beverage, foods, snacks, soft drinks, cold drinks
Why do they buy? They buy them as per the customer preference
and demands
Who is involved in the buying? The shop keepers, family members, friends,
peers, advertisements and marketing
How do they buy? Exchange of money
When do they buy? Whenever required
Where do they buy? Restaurants, coffee shops, shops, malls
What are the customers’ ‘hot’ and ‘cold’ spots? Hot spots- Taste, energetic, refreshments
Cold spots- Sugar content, diet craze

Market Segmentation
The following is an analysis of the industries customer segments. Segment profiles
(characteristics of the segment) and product offered to each segment are provided.
Market Segments
Segment
(Name)
Descriptio
n of
Segment
Demographi
c
Geographi
c
Behavioural Psychographi
c
Segment
Attractivenes
s
Children
and
teenager
s
The
children
and
teenagers
are the
ones
belonging
from the
age range
of 11 to 18
years.
Age- 11 to
18
Occupation-
School and
university
going
children
Sex- Boys
and girls
Australia Parties
Tastes
New Users
Cools
Youthful
Medium
attractivenes
s
Younger
Children
The
younger
children
are the
one
belonging
from the
age range
of 4 to 10
years.
They are
more
likely to
prefer
cold drinks
and soft
drinks.
Age- 4 to 10
Occupation-
Study
Sex- Both
boys and
girls
Australia Parties
Refreshmen
t
Tastes
Youthful
Tasty
Medium to
high
attractivenes
s
Single
People
Single
people,
belonging
from the
age range
of 21 to 27
years
drink
more than
the
married
ones.
Age- 21 to
27
Occupation-
Working
Sex- male
and female
Income
level- more
than 1k
dollars
Australia Parties,
Benefits
Taste
Loyal
customers
Cools
Youthful
Energetic
Party Freak
High
attractivenes
s
Married Married
are the
Age- 27 to
35
Australia Parties,
Benefits
Party Freak
Personal
Medium
attractivenes

ones who
have
family at
their
homes.
Occupation-
Business
man,
working
income
level-
5thousand
dollars to 5
lakh dollars
Taste
Loyal
customers
family parties s
Targeting & Recommendations
Based on the segmentation analysis, the following segments(s) have been determined as the
most attractive to enter.
Segment 1: Youths
Criteria Size- Youths should be the major target for the soft drinks industry.
Difference- Youths fall in the ethnic minority populations
Money- Affordable
Accessible- Easy
Focus on different benefits- They have distinctive demographic, psychosocial, and geographic
characteristics. Also, there is significant increase in their size and economic impact that they have.
Justification- Youths are the most attractive market segment within the overall child-focused market
due to their distinctive demographic, psychosocial, and geographic characteristics; their growth in
size as well as the economic impact; their spending and media use patterns. They have a significant
influence over the broader youth culture, e.g., through hip-hop culture.
Segment 2: Single People
Criteria Size- Large
Difference- There is a significant difference in between single people and the other segments as of
the fact that single people are generally the party freaks. They have the source of income, they can
easily afford buying soft drinks
Money- Affordable
Accessible- Easily accessible
Focus on different benefits- About 32% of the Australian demography is comprised of single people.
Hence, making them the target market would be very beneficial for the industry to ensure more
market share and revenue.
Justification- Single people, belonging from the age range of 21 to 27 years drink more than the
married ones. They tend to part hard, go for more outings and need more source of entertainment
and refreshment. With the same, as they have the source of income, they can easily afford buying
soft drinks
Segment 3: Children and Teenagers
Criteria Size- Large

Difference- There is a significant difference in this segment and the rest others and the main
difference prevails in the age range. The chosen age range should be 11 to 18 years.
Money- The product price should be kept affordable for the purchase making of the children and
teenagers. Although they do not have any source of income, but low price could motivate parents to
buy their kids with the soft drinks.
Accessible- Easily accessible
Focus on different benefits- They are the new channels and they have benefits of frequent,
interactive and sustained engagement with the brands and products.
Justification- The attractiveness of children and adolescents as market segments includes their
considerable and increasing buying power, their increasing influence over parental purchases, their
heavy use of media, and their ready adoption of new media technologies, such as the Internet and
cell-phones, which provide additional marketing channels

References
Chepulis, L., Mearns, G., Hill, S., Wu, J.H., Crino, M., Alderton, S. and Jenner, K., 2018. The nutritional
content of supermarket beverages: a cross-sectional analysis of New Zealand, Australia, Canada and
the UK. Public health nutrition, 21(13), pp.2507-2516.
Mialon, M., Swinburn, B., Wate, J., Tukana, I. and Sacks, G., 2016. Analysis of the corporate political
activity of major food industry actors in Fiji. Globalization and health, 12(1), p.18.
Pettigrew, S., Jongenelis, M., Chapman, K. and Miller, C., 2015. Factors influencing the frequency of
children's consumption of soft drinks. Appetite, 91, pp.393-398.
Rich, K., 2018. Comment on:‘The nutritional content of supermarket beverages: a cross-sectional
analysis of New Zealand, Australia, Canada and the UK’by Chepulis et al. Public health
nutrition, 21(13), pp.2528-2531.
Sheldon, M.S. and Erdogan, I.G., 2016. Multi-stage EGSB/MBR treatment of soft drink industry
wastewater. Chemical Engineering Journal, 285, pp.368-377.
Van Velsen, J., 2017. The extended-case method and situational analysis. In The craft of social
anthropology (pp. 129-150). Routledge.