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Analyze the Changes in the Chinese Beer Market up to 1995, Bearing in Mind Changes in Beer Demand

Essay by   •  May 14, 2016  •  Case Study  •  447 Words (2 Pages)  •  2,197 Views

Essay Preview: Analyze the Changes in the Chinese Beer Market up to 1995, Bearing in Mind Changes in Beer Demand

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Day 1, Preparation Assignment

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Exercise 1: Analyze the changes in the Chinese beer market up to 1995, bearing in mind changes in beer demand.

External Factors through PEST analysis:

Political:

  • Amplification of Open door policy (1992-1995). As a result direct investments were growing.
  • Wholly owned Foreign-Affiliated enterprises were 73.5 as a result.
  • Government investment (adoption of reforms as priority industry) in 1985

Economical:

  • Huge economic growth with consumer equipment: T.V., Washing Machine and Refrigerator.
  • Japan white goods were prominent among Chinese consumers
  • Increased brewery to more than 800 by end of 1980
  • Foreign Direct Investment
  • Growing Low, Middle and High Income groups, especially in the urban areas.
  • Urbanization
  • Lewis Turning Point (Labor shortage at industries)

Social:

  • T.V. ownership reached 105.4% in urban areas (easily accessed through T.V. Ads)
  • Influence of western culture
  • Environmental and Behavioral issues caused by rapid urbanization
  • Counterfeited beers were part of business challenges in the society

Technological:

  • Refrigeration at selling locations (esp. restaurants) was a challenge. Beer were sold at room temperature and poured into a bowl which reduced the quality.

3Cs to analyze Beer Market in China in 1995:

[pic 1]

Exercise 2: Consider the segment of the Shanghai beer market that Shanghai Suntory sought to enter and the reasons for the company’s choice.

[pic 2]1996: Market segment and its market share looked like this:

Segments: Premium Beer, Regular and Low Priced beer. The consumption of these beer types were directly related to People’s monthly earnings.

Competition in Shanghai beer market: 

  • At one time, (1988) Reeb Beer had the biggest market share in Shanghai.
  • After 1999 Tsingtao Beer took leadership in beer production and remained as leader for several years. It was perceived as Premium Beer but priced at Regular Beer pricing.

Exercise 3: Evaluate the marketing mix that Shanghai Suntory adapted from 1996 to 1997, and analyze the reasons for its success.

Product:

Suntory White – Low priced targeting young people

Suntory Gold – High priced targeting Young People

Heavier and Stronger Bottle to avoid forfeits

Unique sized Plastic box containing 20 bottles for transporting to also create barriers for forfeit.

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