STUDY OF CONSUMER PERCEPTIONABOUT BUSINESS STRATEGY AND BRAND OF CARLSBERG
Mr. Rajnish Ratna Assistant Professor (HR&OB) Amity Business School, Amity University U. P.
Ms. Stuti Garg Asst. Relationship Manager-SME Standard Chartered Bank, Nepal
Ms. Saniya Chawla Faculty Associate (HR) Lal Bahadur Shastri Institute of Management Dwarka, New Delhi
Abstract 1. Introduction Purpose: Beer is perhaps the oldest and most popular Carlsberg is one of the world's largest brewery of all alcoholic beverages in the world. Even though groups. It has a beer for every occasion and for every beer is unable to compete with the liquor market in palate and lifestyle. The Group's broad portfolio of India, there still remains a growing market for the beer brands includes Carlsberg Pilsner known as beverage. Carlsberg operates in India through South 'Probably the best beer in the world', and strong Asia Breweries. The main purpose of the study is to regional brands such as Tuborg, Baltika and Holston. study the consumer perception about business It also has a wide range of leading brands in local strategy of Carlsberg and to know the consumer markets. It operates primarily in mature markets in perception level about Carlsberg as brand. Western Europe but is generating an ever-growing Methodology: The study commenced with share of revenue in selected growth markets in interaction with senior officials of South Asia Russian and neighboring countries other parts of Breweries and understanding of objective, business eastern Europe and Asia. Over the last five years, plan, supply chain, marketing set up etc. relating to the Carlsberg Group has become increasingly market- Carlsberg brand. Thereafter a representative sample oriented and efficient. Important results have already was selected which included consumers of beer. Sets been achieved, but the strategic development process of questions were developed to gather primary is continuing. It has launched a number of projects information for the project covering all the parameters with a view to taking Carlsberg closer to its vision of as required. A field study was done to know the being 'probably the best beer company in the world. consumer perception about the Carlsberg beer. Carlsberg A/S, the Parent Company of the Group, is Findings: Carlsberg has gained brand awareness owned by 20,000 institutional private investors all over among the customers in a short period of time of its the world and is listed on the OMX Copenhagen Stock establishment in the market, Carlsberg prices have Exchange. The Carlsberg holds 51% of the shares. been accepted by the consumers but continuous The driving force behind these projects is its aim of availability is a problem which can be sorted out by making the Group more dynamic and flexible, and improving supply chain management, also visibility ensuring a constant focus on market and customers of the product lacks in certain area due to lack in in all of its processes. Carlsberg operates in India continuous availability of the brand and it has an through South Asia Breweries. South Asia Breweries incomparable product packaging in comparison with is a joint venture between Carlsberg, Denmark's other available brands. Industrialization Fund for Developing Countries Practical Implications: This study will be used to (IFU) and a group of investors. Carlsberg has a 45 identify the visibility and strategy to be used in making per cent stake in South Breweries; the IFU holds 10 it more aware to the consumers. per cent, while a group of investors, led by Carlsberg's Key words: Brand awareness, Marketing Strategy, Sri Lankan partner Lion Brewery Ceylon Ltd, hold promotion of Carlsberg, and visibility of Carlsberg. the rest.
Summer Internship Society Volume II Issue-2 October 2011 60 2. Review of Literature brands trying to find a niche in the mature import Allison, Ralph I and Uhl, Kenneth P disucsses that beer segment. The import category is led by Corona, as a company tries to find the factors accounting for which supplies 30 percent of the import market by strong and weak markets, typical consumer volume, and Heineken, which supplies 20 percent, explanations for both tend to be in forms of the according to Benj Steinman, Publisher of Beer physical attributes of the product. Carling Brewing Marketer's Insights. Parker, Philip M., summarizes Company used a relatively inexpensive experiment the economic potential for major cities in more than to help dichotomize contributing influences as being 200 countries around the globe for Carlsberg lager either product or marketing oriented and, also, to beer that have been spun and finished in the same indicate the magnitude of the marketing influence for establishment for the year 2009 is presented. It various brands. The experiment involved the use of provides latent demand or potential industry earnings groups of beer drinkers that tasted (drank) and rated (PIE) estimates for the product for each city, including beer from nude bottles and from labeled bottles. the percent share the city is of the region and of the Benson-Armer, Richard, Leibowitz, Joshua and world. The estimates were created using econometric Ramachandran, Deepak talk about the formerly local models, which project fundamental economic beer business has entered the early stages of dynamics within each country and across countries. globalization: consumer tastes everywhere are starting Parker, Philip M, covers the latent demand outlook to converge, and brewers are exploiting partnerships, for Carlsberg lager beer across the states, union acquisitions, and licensing deals to spread their brands territories and cities of India. Latent demand (in across the world. Globalization's economic benefits millions of U.S. dollars), or potential industry earnings are huge. As demand from consumers in the (P.I.E.) estimates are given across over 5,100 cities developing world rises and best practices in brewing, in India. For each city in question, the percent share marketing, and distribution spread from country to the city is of it's state or union territory and of India country, the international beer profit pool (as measured as a whole is reported. These comparative by earnings before interest, taxes, depreciation, and benchmarks allow the reader to quickly gauge a city allowances) could grow from less than $18 billion vis-à-vis others. This statistical approach can prove today to $28 billion by 2010. Most of this growth will very useful to distribution and/or sales force come in Asia, Latin America, and, to a lesser extent. strategies. Using econometric models which project Eastern Europe as consumption and prices rise and fundamental economic dynamics within each state productivity improves. Yet there is real growth or union territory and city, latent demand estimates potential in the developed world as well. Hargrave- are created for Carlsberg lager beer. This report does Silk, Atifa states that this article focuses on brand not discuss the specific players in the market serving positioning of the new beer brand by brewing major the latent demand, nor specific details at the product Carlsberg. While the brewer's green label targets level. The study also does not consider short-term consumers aged 30 years and up, the newly launched cyclicalities that might affect realized sales. The study, Carlsberg Chill is seeking to appeal to younger therefore, is strategic in nature, taking an aggregate consumers with its lighter taste,' playful' image and' and long-run view, irrespective of the players or hip' brand positioning. While company's spokesperson products involved. Christopher W.K. Tsang declined to comment on 3. Methodology Carlsberg's marketing strategy, according to a source, 3.1 Research Objectives the green label is losing share in China, where foreign The present study was conducted to achieve the beer brands have aggressively made inroads amid following objectives: expectations that people will drink more as incomes 1. To study the consumer perception about rise. Zammit, Deanna, informs that the passports are business strategy of Carlsberg. part of a 10-year plan to build distribution and 2. To know the consumer perception level about marketing while raising the U.S. profile of Carlsberg, Carlsberg as brand. a Danish import that is popular in Europe but received 3.2 Statistical Tool scant marketing attention in the U.S. from former Sample size: Sample size taken is 100. distributor Labatt USA, said Mike Mitaro, President Sampling Type: The selection of sample is and CEO of Carlsberg USA. Since splitting with based on convenience quota sampling. Labatt in May, Carlsberg USA has assumed control Questionnaire: The primary data is collected of the brand's marketing. Carlsberg is one of several through structured questionnaire method. Data
Summer Internship Society Volume II Issue-2 October 2011 61 collected through this method was the first towards middle and high income group people which hand data, which was interpreted to give can prove to be a major threat for the company meaning to the findings. The primary focus of because the are ample amount of consumers in low the study is qualitative research. Qualitative income group who can be targeted by launching a research includes generating data by low priced brand, as presently they are consuming interviewing the sample. local brands and other international cheap brands. Technique: The Statistical Package for Social b) Opportunity Profile: The Indian beer market Sciences (SPSS) software was used to analyze was estimated to be 6.7 million hectoliters (hl) in 2002- the data gathered through structured 03. Beer consumption has been growing rapidly at a questionnaire. The various fields of choices CAGR (Compound Annual Growth Rate) of 7 per were entered as variables and figures and cent over the last 9 years, while growth in 2002-03 graphs derived. With the help of verbal was 11 per cent. New target markets can be explored information provided by the consumers by in the near future and Carlsberg is then expected to filling the questionnaire a concrete decision is have a brighter future in India. There are just two obtained. major market players in the beer market whereas 3.3 Data Collection there is wide range of customers so Carlsberg has Primary Data: Conducting the survey and immense opportunity to tap the untapped market like collecting the information via questionnaires, having lighter beer brand for women. Introducing new personal-interviews/discussions with company flavors and packages in order to attract the customer. officials etc. and field survey involving As per the present scenario income of people in India consumers. has been rising, lifestyle pattern of people is also Secondary Data: Secondary data were changing. Westernization has become a part and collected from newspapers, magazines, beer parcel of everyone's life. Indians are aping up west industry, journals, online resources etc. and there habits as well so if with planning Carlsberg 4. Data Analysis & Findings will try to market its products then Indian market Mentioned below are the analysis of the responses can prove to be a money churner for Carlsberg. As and their findings. a consequence of the high birth rates prevalent until 4.1 ETOP Analysis of Carlsberg the 1990s, a large proportion of the Indian population ETOP = PESTLE Analysis + Porter's Five Forces is in the age group of 20-34 years. This age group is Model the most appropriate target for beer marketers. This a) Environmental Threats: In India there are population trend will give a further boost to the growth already pre-established brands like United Breweries of beer consumption in India. Climate of India is and SabMiller existing in the market with about 80- predominantly hot / warm hence there is immense 90% share in the beer market. Whereas Carlsberg potential for expansion of beer market in India. is a new entrant in the market with a little knowledge Table 1 about the Indian consumer so it might be difficult for 4.2 Product Life Cycle of Carlsberg, for the company to rule the Indian market. Due to Indian Market comparatively low per capita consumption (i.e. 0.7 Carlsberg has entered Indian Market in the year 2006. liters) of beer amongst the Indian consumers as It is in the introductory phase. In other countries, compared to Czech Republic, which has highest per Carlsberg has reached its growth stage. However, it capita consumption of 156.9 liters, it might not be has just entered the Indian market and is in the convenient for Carlsberg to have a positive response introductory phase. amongst the Indian consumers. Carlsberg is a new Mentioned below are the questions that were entrant in the Indian market so it will have make a asked by the consumers during the field survey: huge amount of investment in the market in order to 1. Which brand do you associate yourself with make its imprint in the minds of the consumers, so when you hear beer? that they could compete with the existing players in Table 2 the market. Anheuser-Busch and InBev can prove Based on the above data we can see that Kingfisher to potential competitors in India because these brands leads in the brand recall test, which is then followed are comparatively low priced as compared to by Carlsberg. We can say that Carlsberg has gained Carlsberg. So it can face risk due to this also. brand awareness among the customers in a short Carlsberg is a high priced premium brand targeted period of time of its establishment in the market.
Summer Internship Society Volume II Issue-2 October 2011 62 2. What do like while buying your favorite beer? in the country, Carlsberg has achieved tremendous Table 3 success in a year. Along with the brand the core Brand preference level for Carlsberg has seen above strength lies in its distribution and manufacturing base. in the chart where as consumers still look for Hence Carlsberg need to focus more on setting up Kingfisher for better taste. It can be seen that the new breweries and expanding Indian market. The consumers have accepted Carlsberg prices but key challenge in front of South Asia Breweries is to continuous availability is a problem, which can be create a much wider market for its beer brand across sorted out by improving supply chain management. India. 2. How effective would you judge Carlsberg 6. Limitations in relation with marketing strategy? The study had certain limitations. The major problem Table 4 was the time issue and therefore the number of The main reason for consumers opting for a neutral persons contacted was small. Positive response ratio stand here is due to lack of knowledge of what kind was very less; less number of people was ready to of marketing strategies is used by the company. It participate and replied truly. Non-cooperation of the was also asked regarding the social networking respondents was the major problem faced. Also, campaign, which is conducted, by Carlsberg but lack sample size was another major issue due to which of awareness for the same came forward. analysis part lacked statistical tools giving rise to 3. Carlsberg Brand-Visibility reliability and validity issue. Table 5 7. Recommendations Even though the brand is preferred over other Visibility: In order to make Carlsberg beer available brands, visibility of the product lacks in more successful in the Indian market, South certain area due to lack in continuous availability of Asia Breweries should improve the visibility the brand. According to the graph above we could of the brand as 60% people said that the see there were only few who were positive for visibility of brand is ineffective. effective brand visibility where as large portion of Surrogate advertising: Carlsberg has to rely consumers thought it was ineffective but can be on surrogate advertising. It has to associate improved. itself with various sponsorships like sports, and 4. Carlsberg-Product availability music to tap the Indian Market and make a Table 6 positive impact on the consumers. Looking at the above graph it was found out that the Promotional Schemes: To push in the company needs to work out more effectively for product in competitive market of beer new making its product available at right market at right schemes should be introduced to tap the time. Since one of the main factors for switching of untapped consumers like providing brands is the availability factor, awareness level of complementary Carlsberg voucher, which brand and brand loyalty would not be their if there is would be redeemable at various malls PVR lack in availability. cinemas etc. 5. Conclusion End -Notes The beer market in India has just started evolving. Allison, Ralph I and Uhl, Kenneth P,,Influence of Beer There is scope for growth in terms of volume, Brand Identification on Taste Perception.,Journal categories and variants. Carlsberg is a well known of Marketing Research (JMR); Aug64, Vol. 1 Issue among discerning Indian consumers. According to 3, p36-39, 4p. the above analysis it can be concluded that even in a Benson-Armer, Richard, Leibowitz, Joshua and Ramachandran, Deepak, GLOBAL BEER: WHAT'S short span Carlsberg has acquired good brand ON TAP? McKinsey Quarterly; 1999, Issue 1, p110- awareness among the consumer. The problem in 121. the Indian beer market lies in Indian laws that tax Hargrave-Silk, Atifa, Carlsberg mulling green label's exit. brewers for exporting beer out of one state to another, Media: Asia's Media & Marketing Newspaper; 9/ as well as creaking infrastructure, which makes 10/2004, p1-1, 1/3p. transportation difficult. So here it becomes a necessity Zammit, Deanna, Carlsberg, Duvel Seek Niche Among Beer to to have a network of breweries. The Indian market Imports, Adweek; 1/24/2005, Vol. 46 Issue 4, p10- has a rising disposable income and an energetic youth 10, 3/4p, 2 Color Photographs. population for whom drinking is not seen as a taboo. Parker, Philip M, The 2009 Report on Carlsberg Lager Beer: Though Kingfisher is by far the best selling beer brand World Market Segmentation by City, City
Summer Internship Society Volume II Issue-2 October 2011 63 Segmentation Reports; 1/ 4/2010, pN.PAG, 329p, 1 Nelson.Larry,"Carlsberg NPD" Brewers Guardian " March Diagram, 246 Charts, 1 Map. 2008 Parker,Philip M, The 2009-2014 Outlook for Carlsberg Lager Carlsberg all-malt beer launched," Business Line. Sept Beer in India, Country Outlook reports; 1/17/2010, 25.2007 pN.PAG, 318p. Nelson, Larry. "Carlsberg accelerates brewing in India" References Brewers Guardian. May 15.2007 a) Research Papers Mukherjee, Pradipta."Carlsberg to introduce global brands Allison, Ralph I and Uhl, Kenneth P,,Influence of Beer in India" The Times Of India, Jan 7.2009 Brand Identification on Taste Perception.,Journal Saxena, Ruchita. "Carlsberg opens two more breweries in of Marketing Research (JMR); Aug64, Vol. 1 Issue India." Business Standard [Mumbai] .11 April. 2008 3, p36-39, 4p. c) Websites Benson-Armer, Richard, Leibowitz, Joshua and Gupta, Vishwas Kumar. "The Indian beer industry in context Ramachandran, Deepak, GLOBAL BEER: WHAT'S of consumer buying behavior." Faculty marketing, ON TAP? McKinsey Quarterly; 1999, Issue 1, p110- INC-HQ, [Hyderabad] Feb 15.2008 121.
Summer Internship Society Volume II Issue-2 October 2011 64 Table 2
W hich brand do you associate first w hen you hear beer?
5 0
4 0
3 0 P e r c e n t
2 0 4 1 . 0 0 % 3 5 . 0 0 %
1 0
1 4 . 0 0 %
6 . 0 0 % 4 . 0 0 % 0 C a r l s b r g H a y w a r d s H e i n e k e n K i n g f i s h T i g e r
Table 3
B a r C h a r t
2 5 W hich brand do you associate first w hen you hear beer? C a r l s b r g H a y w a r d s 2 0 H e i n e k e n K i n g f i s h T i g e r
1 5
C o u n t 2 3 % 1 0
1 5 % 1 2 % 1 1 1 1 5 % %
7 % 6 % 5 % 4 % 4 %
1 % 1 % 0 T a s t e P r i c e B r a n d A va ila b ility W hat do you look w hile buying beer?
Table 4
H ow effective w ould you judge C arlsberg in relation w ith -M arketing S trategy
4 0
3 0
2 0 3 8 . 0 0 % P e r c e n t 3 5 . 0 0 %
1 0
1 3 . 0 0 %
8 . 0 0 % 6 . 0 0 %
0 V ery effective E f f e c t i v e N e u t r a l In e ffe ctive V ery Ineffective
Table 5
C arlsberg-B rand V isibility
6 0
5 0
4 0
3 0 5 9 . 0 0 % P e r c e n t
2 0
2 3 . 0 0 % 1 0 1 6 . 0 0 %
2 . 0 0 % 0 E f f e c t i v e N e u t r a l In e ffe ctive V ery ineffective
Summer Internship Society Volume II Issue-2 October 2011 65 Table 6
C arlsberg-P roduct A vailability
6 0
5 0
4 0
3 0 5 6 . 0 0 % P e r c e n t
2 0
1 0 1 9 . 0 0 %
1 3 . 0 0 % 1 2 . 0 0 %
0 E f f e c t i v e N e u t r a l In e ffe ctive V ery Ineffective
Summer Internship Society Volume II Issue-2 October 2011 66