Foster's Beer: Marketing Strategy Analysis

The assignment provides a comprehensive marketing strategy analysis for Foster's Beer. It utilizes tools like SWOT and PESTEL to examine the internal and external environments, identifies competitors, and defines the target market. The report further develops a clear positioning and value proposition for Foster's Beer and outlines effective marketing tactics using the 4Ps (product, price, place, promotion). The analysis is supported by relevant academic sources and industry information.

Marketing Strategy Development 1
Marketing Strategy Development
Name:
Course:

Marketing Strategy Development 2
Executive Summary
In 2007, the American Marketing Association (AMA) accepted the definition of marketing as
“Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society
at large (Marketing News, 2008)”. Marketing strategy focuses on market segmentation, customer
target identification and positioning while choosing how to compete in the markets identified.
The marketing tactics focus on the 4-7Ps of the marketing mix and support the marketing
strategy (Varadarajan, 2009). According to Kotler (1997), marketing is one very dynamic area of
management and new challenges keep cropping up every time and businesses need t respond to
them. New marketing ideas are thus needed to meet the new emerging marketing challenges. An
example is the influence the internet has had on marketing in education, research and practice
(Varadarajan, 2009). All firms must therefore constantly analyze review their marketing
activities, decisions and behaviors if they are to remain relevant and competitive.

Marketing Strategy Development 3
Table of Contents
Executive Summary …………………………………………………………………………….. 2
Issue 1: Company Description ………………………………………………………………….. 4
1.1 Background of Fosters Group ………………………………………………………. 4
1.2 Foster Group Guiding Principles ……………………………………………………. 4
2 Issue 2: Analysis of the 5Cs of the Organization ……………………………………………. 6
2.1 Company SWOT Analysis ...………………………………………………………… 6
2.2 Customers …………………………………………………………………………… 7
2.3 Collaborators ………………………………………………………………………… 8
2.4 Competitors …………………………………………………………………………. 8
2.5 Context ……………………………………………………………………………… 9
3. Issue 3: How the firm collects information ………………………………………………….. 11
4. Issue 4: Developing Marketing Strategy …………………………………………………….. 11
4.1 Potential market segments …………………………………………………………. 11
4.2 Value Proposition ………………………………………………………………….. 12
4.3 Positioning Statement ……………………………………………………………… 12
5. Issue 5: Developing Marketing Tactics ……………………………………………………... 13
6. Conclusion …………………………………………………………………………………... 14
7. References …………………………………………………………………………………… 15

Marketing Strategy Development 4
Issue 1: Company Description
1.1 Background of Fosters Group
Fosters group is a wine and other beverages manufacturer from Australia that sells in
over 150 countries in the world making one of the biggest Australia’s selling beer brand in the
whole world. It was started by William and Ralph Foster in 1887. The company manufactures
markets and also distributes a large international portfolio of alcoholic and non alcoholic
beverages. Their products include beers, cider, spirits and wines and some non alcoholic
beverages with some famous brands such as Crown Lager and Victoria Bitter for beers and Wolf
Blass and Chateau St Jean for wines (Fostersbeer.com). Some of the brewing operations operate
in Australia, USA, France, Germany, Fiji, China, India, Vietnam, among other places. The
company has grown to become a global beverage manufacturer through a series of acquisitions
(Fostergrp.com, 2017).
1.2 Foster Group Guiding Principles
The company is committed to serving its customers and ensuring that they flourish as
seen in the vision and mission statements. Through these guiding principles, the company
celebrates the customers and the relationships that have been formed and retained over the years,
as the company boasts of 97% annual customer retention rate. The vision and mission statements
thus captures this commitment as per below (fostergrp.com, 2017).
Figure 1: Foster group Vision and Mission Statements. Source: https://www.fostergrp.com/who-
we-are/our-guiding-principles/

Marketing Strategy Development 5
The company also has a set of corporate values which is a set of principles that are not
compromised. These are the traits expected of the company and they set out the customer as
priority and taken seriously for trusted and lasting relationships. These set of values include
integrity, humility, accountability, humility, respect, wisdom and excellence. The company also
has a culture of service and strives to live that culture every day. They therefore hire the best
professionals in positions that best fit their skills and abilities. Another culture is cooperation and
team work thus benefiting from the insights and knowledge of every team member. Finally,
there is the aspect of evidence-based investing in the culture. This is represented by intersection
between cost, competence and expertise as shown in the figure below.
Figure 2: Foster Group evidence based investing. Source: https://www.fostergrp.com/who-we-
are/our-guiding-principles/

Marketing Strategy Development 6
The foster brand portfolio is large enabling it to have presence in almost all segments and
brand category. The company’s brands are classified according to their brand power. It thus
offers to the market many beverage solutions to choose from, from hotels, restaurants, pubs to
the small beer shops. The company has specific managers to cater for each brand category
(Fostergrp.com, 2017).
Issue 2: Analysis of the 5Cs of the Organization
2.1 Company SWOT Analysis
Strengths
The company has a large diversified brand portfolio and strong brand equity, from
premium brands and specialty beverages to other world renowned brands. It also has a large
portfolio of agricultural assets. The company also strategic breweries that are located for better
reach of the global market. The company is credited for having expertise in packaging and
pricing globally. They are also credited with the great and authentic Australian taste from
imported hops. The strong brand presence in over 150 countries in the world where the products
are sold.
Weaknesses

Marketing Strategy Development 7
The geographical spread of the company is not large thus vulnerable to the risks of
particular regions it operates in. However, the company still sells through other retail mediums in
some other regions like Africa. The company also suffers from lack of global presence compared
the main competitors and market leaders.
Opportunities
The company has been innovative on new product lines and improving on the product
portfolio thus giving it an edge over competitors. Some of the innovations include zero sugar and
Carlton Dry Fusion. The premium global brands are preferred by customers due to the quality,
taste and legacy, as opposed to cheaper local beers which may be of lower quality
Fostergrp.com. (2017).
Threats
The company’s brands suffer from intense competition from other brands like Carlsberg,
Kingfisher, and Budweiser among other premium brands. It also suffers from strict regulations
that restrict commercial advertising of alcohol products in parts of the world. This is a threat to
the value of the company products and may reduce the revenues and profits. Another threat is the
high taxes imposed in the beer industry in many countries. Another threat relates to rising costs
in raw materials which may reduce company earnings. Foster’s overseas market is also subject to
fluctuate due to political and economic conditions like currency fluctuations which affect their
business in those markets.
2.2 Customers

Marketing Strategy Development 8
The company sells to wholesalers and retailers in Australia, Europe, America, Asia
Pacific and other regions in the world. The company targets young and middle aged
professionals both men and women who have average disposable income. In addition, the
company has a large portfolio of brands that target different segments from the premium brands
that are priced above the ordinary brands. Other cheaper brands target other pubs and shops
which are not in the premium class.
2.3 Collaborators
The company has a number of subsidiaries which help in marketing, sales and
distribution of the products in various countries. The principal subsidiaries include the Australian
Leisure and Hospitality that deals with liquor shops and hotels, Wine Clubs include Blass Wine
Estates, Heinrich Maximillian Pallhuber and Cellamaster Wines ltd in different countries.
Foster’s USA handles US beer distribution. Windsor Vineyards handles direct marketing in US
and Lensworth Group ltd handles investments.
2.4 Competitors
The Australian beer market main players have been the Lion and Foster’s Group. In
2016, Foster’s Group led in Australia beer market share with a 34% total of the volumes.
Although Fosters maintains the leading position, the company suffered a drop over this period,
due to lack of a craft beer like James Squire and Little Creatures. There was also decline of some
of their beer brands like Carlton Draught and other mid-priced lagers faced stiff competition
from the competitor craft alternatives. The market share for the alcoholic beverages in Australia
is represented by the figure below.
Figure 3: Market Share of Beer Manufacturers in Australia. Source: IBISWorld (2011), Beer &
Malt Manufacturing, Australia.

Marketing Strategy Development 9
2.5 Context
Strategic analysis requires an analysis of the operating environment in order to formulate
appropriate strategies for competitive advantage. The external factors are those beyond the
company’s control but that affect the company and its business operations (Yüksel, 2012). These
can be analyzed using different models which include the PESTEL model which stands for the
“political, economic, social, technological, environmental and legal factors” (Lynch, 2009).
Political factors are those that may involve government’s laws, regulations and
restrictions both in domestic and international markets (Rodrigo, 2012). Some trade agreements
have been in favor of the beer and wine industry which may make it easier for Foster group to
sell more of their products to other markets like China and take advantage of the big population
and market there. These include the ChAFTA agreement that was signed in 2015 and has led to
the growth of the market with 57% volume increase in Australian wine import growth (Wu,
2016). The signing of WTO by China saw reduction of import tariffs from 65% to 14% thus
becoming favorable for the import of foreign wines (Wu, 2016).
Economic factors include exchange rates, currency fluctuations and other economic
factors that may affect the industry (Rodrigo, 2012). The company is subject to these changes in

Marketing Strategy Development
10
their international markets for example the effects of Brexit and related currency fluctuations
which may lead to loss of business. The company therefore needs to have strategies to hedge
against losses related to these changes.
Social-cultural factors affecting the company may relate to the population demographics
and people buying power and may relate to the cultural values of the people (Rodrigo, 2012).
The company may be affected by cultures and religions that may not advocate for drinking
alcohol. The company needs to continue monitoring such factors like purchasing power as it
influences their target market to focus on the segment with some disposable income.
Technological factors relate to the technological changes and innovations that affect the
market (Rodrigo, 2012). These may include new production methods that are more efficient as
well distribution. For example online distribution has become favorable in many markets and the
company should not be left behind in embracing new ways of doing business that connect with
the customers.
With increased focus on environmental sustainability, the company must be seen to be
operating in ways that do not harm the environment or risk losing environmental conscious
customers (Rodrigo, 2012). The company also needs to consider the geographical and weather
conditions that may hinder the manufacturing of their products. Law suits related to
environmental degradation from company activities may lead to huge losses and must be
avoided.
Legal factors are those related to laws of copyright, consumer protection, health and
safety and others that affect the way the company operates (Yüksel, 2012). These may change
from one country to the others. They may affect the way alcoholic products are packaged and

Marketing Strategy Development
11
advertised, with some countries not allowing advertisement of these products and restrict the age
of persons who can buy these products. Another example was the launch of anti dumping and
anti subsidy investigations led to decline of imports in 2013 (Inotai, 2013). The company must
therefore comply with the laws of the countries in which they operate.
Issue 3: How the firm collects information
There are a number of research companies that carry out market research on the beverage
industry and publish reports that give trends and insight in to the industry and give business
recommendations. This gives the company some leads of what is happening in the market, the
competition and where their products stand compared to competition.
Other ways the company collect customer information includes use of the partners and
distributors and retailers who give information from customers and what they expect about the
company products. The regional managers then collate the information that helps the company in
formulation of marketing communication messages and improvement or even innovation of new
products.
Issue 4: Developing Marketing Strategy
4.1 Potential market segments
The main target market will be the young and middle aged, male and female individuals
who have average to high income and can afford the middle to premium products. Currently the
company has multiple brands that appeal to people of almost all segments, from the premium
products, the middle and the low segment of customers. The company should continue with
innovation of other products that appeal to every potential customer whether they are male or

Marketing Strategy Development
12
female, young or old, from the high, middle and the low class. This will ensure that the company
brands appeal to majority of the population while also gaining over competitors.
4.2 Value Proposition
While there may be no agreed definition of a value proposition, many authors agree that
the customer value should be defined from a customer perspective and that it should help the
organization achieve competitive advantage (Anderson, Narus & Van Rossum, 2006). When a
company formulates and implements a value proposition, it forces the company to choose how to
compete in the chosen market (Ballantyne, Frow, Varey and Payne, 2011). According to Glaser
(2006), all those involved in the value creating process need to realize their complementary
objectives and thus negotiate for the value to be enhanced for all parties. In this case then value
is not just a strategy or benefits to the customer, but a negotiation of all participants to create
value (Ballantyne & Varey, 2006).
Foster group will then consult all the stakeholders to negotiate on the value for the brands
and develop the value proposition which appeals to every participant. The value proposition will
focus on relationships as highlighted by the vision and mission and quality as shown in all the
products. The suggested value proposition is: Create Lasting Relationships.
4.3 Positioning statement
According to Anderson et al., (2006), a positioning statement should define what the
company is selling, the target customer and why the customer is buying the company products. A
good positioning statement will define the target market as well as how they will perceive the
brand. It has four main components namely target market, differentiation, frame of reference and

Marketing Strategy Development
13
reason to believe (Schuemann, 2015). The suggested positioning statement for Foster from the
analysis is: The Foster quality and premium taste for the lover of fun who builds long term
relationships with family and friends.
Issue 5: Developing Marketing Tactics
5.1 Marketing Mix
Product
For Foster to continue with the success and beat competition in the beer and wine and
other beverages has to get the product right including the flavor, the texture, flow amongst other
wine and beverage qualities. The design of the bottle, the branding, the casing, and the designs
will also have to be appealing to the target markets who are the young working class across the
world where there is presence. The bottles shapes and labels have to comply with international
recognizable standards to appeal to the target market.
Price
The company will continue having products across the segments. As this has been one of
its strengths, the products will continue being competitively priced to beat competition. The
premium products will be sold at a premium price in order to compete favorably with others of
the same premium standard as price is one of the quality indicators. The price will therefore
reflect superior quality but comparable to others in the market. To target other segment, the other
products will continue pricing of medium and low ranges.
Place/Distribution

Marketing Strategy Development
14
Online purchases are gaining popularity in the market. The company will therefore have
presence in all the major online stores. The online stores should have partnerships with many
physical stores to enable quick delivery once customers order from the different markets. The
distribution will ensure availability in all the up market stores and outlets and also high end
hotels and restaurants at the same time the pubs and other smaller shops to cater for all segments.
Promotion
The company should be ready to investments in advertising including use of print media,
TVs, social media and also bill boards and signage meant for creating visibility. Care needs to be
taken to the laws of each country as some countries restrict commercial advertising of alcoholic
products. In this case, the company has to identify other means of advertising for example use of
CSR activities that touch the people in regions of operation. The messages be those creating an
emotional connection with the brand and to create memorable experiences with the brand thus
customer loyalty. Sponsorship of events attended by target market on food and wine or
entertainment will help create these brand experiences.
6.0 Conclusion
In conclusion, this report has undertaken an analysis of Foster’s group manufacturing,
distribution and marketing of alcoholic beverages. It has discussed the micro and macro
environment using the SWOT and PESTEL models. It has also identified the competitors and
developed a marketing strategy starting with identified target market. The report has developed a
positioning and value proposition and also developed marketing tactics using the 4Ps of
marketing mix.

Marketing Strategy Development
15
References
Anderson, J., Narus, J. & Van Rossum, W. (2006). Customer Value Propositions in Business
Markets. Harvard Business Review, Vol. 84 No. 3, pp. 91-9.
Ballantyne, D., Frow, P., Varey , R. and Payne, A. (2011). Value Propositions as
Communication Practice: Taking a Wider View. Industrial Marketing Management 40:
202–210.
Ballantyne, D. & Varey, R. (2006). Creating Value-In-Use through Marketing Interaction: The
Exchange Logic of Relating, Communicating and Knowing. Marketing Theory, 6(3),
335−348.
Fostersbeer.com. (2017). Retrieved September 28, 2017 from: http://www.fostersbeer.com/home
Fostergrp.com. (2017). Retrieved September 28, from:
https://www.fostergrp.com/who-we-are/our-guiding-principles/
Glaser, S. (2006). The Value of the Manager in the Value Chain. Management Decision, 44 (3),
442−447.
Inotai, A. (2013). Economic relations between the European Union and China. Cairn.info
Kotler, P. (1997). Marketing Management: Analysis, Planning, Implementation and Control (9th
ed.). Upper Saddle River: Prentice-Hall.
Lynch, R. (2009). Strategic Management. England: Pearson Education Limited.
Marketing News. (2008). Marketing Defined. Marketing News, 42, 28–29.

Marketing Strategy Development
16
Rodrigo. (2012). Strategic Analysis (PESTEL, Porter and SWOT) of BMW. The Writepass
Journal. Retrieved April 19, 2017 from: https://writepass.com/journal/2012/11/strategic-
analysis-pestel-porter-and-swot-of-bmw/
Schuemann, D. (2015). How to Write Market Positioning Statements for Alcohol Beverage
Branding. Retrieved September 29, 2017 from: http://drinkwithyoureyes.com/how-to-
write-market-positioning-statements-for-alcohol-beverage-branding/
Varadarajan, R. (2009). Strategic Marketing and Marketing Strategy: Domain, Definition,
Fundamental Issues and Foundational Premises. J. of the Acad. Mark. Sci. (2010)
38:119–140.
Wu, S. (2016). China wine imports rise strongly in 2015. Time Inc. (UK) Ltd. Retrieved April 19,
2017 from: https://www.decanterchina.com/en/news/china-wine-imports-rise-strongly-in-
2015.
Yüksel, I. (2012). Developing a Multi-Criteria Decision Making Model for PESTEL Analysis.
International Journal of Business and Management, Vol. 7, No. 24.