is overseas expansion an option that the Strasburg should be considering? Outline both the positives for a potential entry into the Hong Kong beer market and any possible negatives with entering this market. Why not just stay at home like other Australian microbrewers?
Name: SAVOEUN YIN
ID: 5317193019
Submit to A. MODI GILIWALLA
Subject: INTERNATIONAL MARKETING
Strasburg Brewing
1 is overseas expansion an option that the Strasburg should be considering? Outline both the positives for a potential entry into the Hong Kong beer market and any possible negatives with entering this market. Why not just stay at home like other Australian microbrewers?
Looked at in the total of the Australian alcohol market, 85 percent of beer is produced by the big national players: such as Carlton United Brewers (CUB) with their big brands, and latter by either the Foster’s Group or Lion Nathan. The rest 15 percent by regional or microbreweries, the part of the market Strasburg Brewing invested. In the small market share, Strasburg Brewing has also to compete with other microbrewers such as Redoak and Paddy’s and other imported brand like Heineken from Holland, Becks from Germany, Stella Artois from Belgium, Tsang Tao from china, Kirin from Japan etc. the places of Strasburg Brewing became smaller. So, in order to survive, overseas expansion is an option that the Strasburg should consider.
There are some positive and negative for the potential entry into the Hong Kong market;
The positive:
(1) Its base fit to Hong Kong consumer’s behaviors: Consumers in Hong Kong reputedly choose beer brands based on quality characteristics, especially taste. This is what Aaron and Shannon have preferred to focus their resources, allowing them to keep Strasburg with the quality to an exceptionally high standard. Both Strasburg and Strasburg Lite are produced using only the highest quality ingredients and contain no additives or preservatives. This is one of the positive for the potential entry into Hong Kong market that it’s based on quality will win the consumers’ loyalty.
(2) Strasburgs were produced in a bottle size of 330ml. Fortunately, The standard accepted size of cans and glass in Hong Kong is 330 ml, which is the bottle size of Strasburg and Strasburg Lite. This mean that the products produced in the Strasburg’s Sydney microbrewery can be shipped to Hong Kong without any packaging change which is the positive for the potential entry to Hong Kong market.
(3) Most of the beer drinkers in Hong Kong have the perception that “German Beer is the best”. The brand name Strasburg reinforce that Strasburg is a German-style-beer produced with only the very highest quality ingredients, and as being a perfect accompaniment to fine food.
(4) Most of the Hong Kong consumers traveled to many countries, they became smarter. Many of these consumers are tired of mainstream premium brands like Heineken, Stella Atois, Grolsch, Kroenenberg and Guinnes, and are looking for something different. Strasburg might just be it.
(5) In 2008, the Hong Kong government decided to abolish 30 percent Tax on beer. This is a important positive for potential entry to the market that Strasburg can be cost competitive at the premium end of the market, where Strasburg would like to position them.
These are the entire positive for the potential entry to Hong Kong market. Somehow, there are also negative aspects for entering this market such as;
(1) In the Hong Kong market, there are dozens of imported beers available including all the major well-known American, European and Asian Brands. This means Strasburg will have highly competitive when entering this market, with the locals spoilt for choice and increasing discerning in their beer tastes.
(2) There is one local company named, Hong Kong Beer Ltd, produced approximately 126 000 litres a year. It is one of the oldest microbreweries in asia and does most of its business supplying Hong Kong pubs with exclusive microbrew. This company is a key competitor for Strasburg, while it has more experience in doing business in Hong Kong, and Strasburg is new entrance with lack of experiences and distribution partners.
Some boutique beers from Australia after entering the market for a little over two years, won the Australia international awards for its brand. They don’t think of expansion to oversee market. But for Strasburg, the domestic competitors become high, the chance to survive in domestic market are less. So, the expansion to oversee market is the only one option that Strasburg must consider.
2 how should they go about finding distribution partner in the Hong Kong market and what should they (or more specifically Gato Marketing) say when approaching the potential partner? Is distributing the brand directly to retail outlets an option that the Strasburg should consider?
It is extremely sure that to enter the Hong Kong market, SME or companies without experience in this market must need a local distributor to handle the promotion and distribution through established channels.
On their trip to Hong Kong, Aaron and Shannon discovered some natural retail outlets for microbrews including the east end brewery, where discerning beer drinkers can sample microbrews from around the world. They noted that the East End and microbreweries like Hong Kong Brewing are expanding around the region, as Asian beer drinkers become more sophisticated in their tastes.
Aaron and Shannon knew that they must find a distributor not representing a competing beer company, as distributors really should carry non-competing products. They must have such distributor to take care of the importing arrangements, too.
Unfortunately, Strasburg understood that they don’t have the financial or marketing resources, or the expertise, to do all of this themselves. On the other hand, Most of Hong Kong residents buy their beer at bars and restaurants. So, it is obvious to them to establish distribution in bars and restaurants frequented by the indentified target market. Lacking of resources, and knowing little about Hong Kong business culture, it is difficult for them to handle all of this by themselves. Aaron and Shannon decided to leave all these aspects to the Gato marketing agency to organize.
In distributing their brand directly to retail outlets is an option that the Strasburg can do, due to some positive aspects reinforced by their brand’s name.
- The brand name Strasburg reinforce as the German style which is fit with Hong Kong consumer’s perception that “German beer is the best”.
- Strasburg and Strasburg Lite are positioned as cold-filtered larger, produced with only the very highest quality ingredients, no additives or preservatives, and as being a perfect accompaniment to fine food. It is fit with Hong Kong consumers’ behaviors which chose beer brands based on quality characteristics, especially taste.
3 outline the fundamentals of an alternative communications strategy for Strasburg and Strasburg Lite in the Hong Kong market designed to gain brand exposure, build brand awareness and encourage product trial over and beyond those planned by the strasburgs and Gato Marketing.
For the communication strategy to gain brand exposure, build grand awareness and encourage product trial over and beyond, Virginia from Gota Marketing suggested to launch the brand by participating in two annual events; the annual Lan Kwai Fong Beerfest and the annual Hong Kong Oktoberfest celebrations.
These two annual events are the important events in Hong Kong which celebrated annually and attract big crowds of people. By participating these two annual events, many locals people will recognize strasburgs and think that Strasburg is bigger than it actually is, and this might help give the brand greater credibility.
Another communication strategy that Virginia from Gota marketing suggested is the label on the front of the bottles features the graphic of a German castle and the tagline is “German Style Boutique Beer, Brewed With Love Downunder”. Virginia suggested that the word “Down under” would be a bit lost on many in the Hong Kong target market. They need to change it.
For the brochures; the promotional flyers on how the beer is brewed, the quality ingredients used and the nature of beer, Virginia suggested to provide just in English, not Chinese. He gave the reason that Hong Kong beer drinkers mostly are well travelled, and that many of them would have been educated or worked in other countries. Importantly the names and locations of the retail venues stocking the brand, such as the East End Brewery, would be featured on the promotional flyers.
Virginia suggested that the other forms of promotions in Hong Kong such Television and Radio were likely to be outside their limited budget, they are out of the question cost wise. They may not necessarily reach the right audience.
4 is it a mistake not to produce any of the marketing communications for the Hong Kong market in Chinese, or is this, in fact, strength for Strasburg Brewing? Explore both points of view and justify your own personal opinion.
I agree with Virginia from Gota Marketing that Hong Kong consumers are mostly educated. They are well travelled, and that many of them would have been worked in other countries. Producing the marketing communication in English might be a good perception for them to recognize that Strasburg is a German Style Beer which produced using only the highest quality ingredients and contain no additives or preservatives. It has a good advantage that Strasburg and Strasburg Lite which are produced in Australia can directly ship to Hong Kong without changing anything.
Producing the marketing communication in Chinese might be a good point, suppose if to sell the product to the main land, china. But, for Hong Kong consumers, it might be different. Somehow, from my point of view, it is also good if they can produce the marketing communication in Chinese for a special point or they can produce both in English and Chinese.
5 visit the websites for Redoak Brewery, Fusion Brewery and one other Australian microbrewery, and then conduct a brief audit of the marketing communications on each of these sites. If these brands were to go international as the Strasburgs have decided, what modifications, if any, would you make to each of them?
Redoak Brewery is Australia's Most Awarded Brewery. It wins swag of medals at the 2004 Australian International Beer Awards before they had sold even a single drop. It has also been voted Best Specialty Beer Venue (Bar Awards 2008) and Best Beer Cafe, NSW Awards for Excellence 2009 & 2010. Redoak strives for excellence in every beer and is passionate about boutique beer!
Redoak Brewery has great background and popular inside Australia. It has an excellence marketing and advertising for attracting drinkers. Redoak Brewery can do very well for its business inside the country without thinking of going oversea. However, Redoak Brewery can prepare to go abroad when it need to extend its sell.
Fusion brewing segment itself as “Makes Beer to Match Foods”. It is the first company in the world to create beer varieties from the start to match specific food flavors. Using a renowned food expert and master brewer the results is three multi-award winning beers. Bluebottle Beer is crafted to enhance the delicate flavors of seafood. Firefly Beer is crafted to enhance spicy food flavors. And, Prime Beer is a deep amber ale style beer with complex malty flavors and strong bitterness to enhance seared meat from the grill.
Fusion brewing already expensed in oversea. The beer can now be enjoyed in the UK, Japan and Fiji and thousands of establishments in Australia.
Fusion brewing tries to make itself as “The Beer to be the perfect accompaniment to a cuisine or flavor”. What the Fusion brewing should do now is to position itself in its market and to build its strong brand.
Another Australia microbrewery which is also interesting to study is Gage Roads Brewing. Gage Roads Brewing was originated in 2002 by Bill Hoedemaker and Peter Nolin. It was brew to be a natural beer to the world class standard using original recipes designed for the Australian lifestyle and climate.
More than 5 years on and under the leadership of Nick Hayler (CEO), the Gage Rage Roads product range has been grown and re-branded to include Wahoo Premium Ale, Gage Premium Lager, sleeping Giant IPA, Atomic Pale Ale, and Blue Angel Cider. During this time the company attracted Australia’s largest liquor retailer, Woolworths Limited, to join shareholders as a cornerstone investor (25%) and contract with the company to produce a number of contract brew products, underpinning extraordinary growth in sales volume.
Gage Roads is now one of Australia’s largest independent breweries with a production capacity in the order of 1.2 million cases per annum, adhering to its original passion for quality products, quality ingredients and traditional brewing techniques
Gage Roads do very well with its sale. It can prepare itself to gain the largest market share in Australia without expense to oversee.
Posted by seangkhun
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