Bb 1052 tiger beer - Buyer Behaviour assignment 2, group report PDF

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Buyer Behaviour assignment 2, group report...

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Bachelor of Business (Marketing) – Full Time Buyer Behaviour (MKTG 1052) CA002 By:

Lim Jia Yan Marissa Cheryl Lee Ji Ting Sharon Ramli Wong Siu Hui Giselle Yap Xiao Ting Philana Goh Jia Hui Patrina

S3447615 S3446371 S3447623 S3447646 S3446793 S3450888

For, Ms Perlyn Sim Sock Lee SIM Local Lecturer 14th April 2014

Table of Contents Executive Summary 1. Background Information 1.1 Market Size 1.2 Market Positioning 1.3 Market Segment 1.4 Product Life Cycle 2. Competitors 2.1 Direct Competitors 2.2 Indirect Competitors 3. Target Market 3.1 Primary Target Market 3.1.1 Demographic 3.1.2 Psychographic 3.1.3 Behavioral 3.2 Potential Market Segments 3.2.1 Demographics 3.2.2 Psychographic 3.2.3 Behavioral 4. External Influences 4.1 Culture and Subculture 4.2 Demographics 4.3 Group Influences 5. Internal Influences 5.1 Needs and Motives 5.2 Perception 5.2.1 Exposure 5.2.2 Attention 5.2.3 Interpretation 5.3 Learning 5.4 Lifestyle 6. Consumer Decision Making Processes 6.1 Types and Amount of Information 6.1.1 Level of Involvement 6.1.2 Level of Decision Making 6.1.3 Evoked Set Concept 6.2 Evaluative Criteria / Decision Rule 6.3 Shopping 6.4 Post Purchase Behavior 6.5 Disposal 6.6 Loyalty 7. Marketing Strategy 7.1 Product 7.2 Price 7.3 Promotion 7.4 Place 8. Evaluation and Recommendations 8.1 Product Positioning 8.2 Marketing Mix 8.2.1 Improved Market Communications 8.2.2 Enhancing Customer Satisfaction and Improving Purchase Experience References:

3 4 4 5 5 6 7 7 7 8 8 8 9 10 11 11 12 13 14 14 15 16 18 18 20 21 29 30 31 31 32 32 32 33 33 34 35 36 38 39 40 40 41 44 49 52 52 52 52 55 57

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT

Executive Summary The beer market in Singapore is extremely saturated with a large selection of beer for consumers. This makes it challenging for beers to stand out, and for new products to gain market share. Tiger Beer Singapore markets a range of products such as Tiger Beer, Tiger Crystal, and recently, the Tiger Radler. In this report, we will be examining the newly launched Tiger Radler, and analysing how buyer behaviour concepts have been applied in the marketing planning process. Throughout this report, Tiger Radler will be compared closely against Carlsberg, a close competitor.

Recommendations will be given and a reasonable conclusion will be reached at the end of the report.

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT

1. Background Information

Tiger Beer has always specialised in brewing exotic alcoholic drinks with a hint of Asian taste, appealing to young adults and seniors (Tiger Beer 2014). To satisfy the modern day’s trend while providing a hint of invigorating sensation, yet preserving the rich, century-old original brew recipe, Tiger offers its original brew added with a twist of natural lemon juice in 2013, launched as Tiger Radler on 29 November 2013 (Sim 2013). It aims to attract current beer and non-beer drinkers to experience the refreshing sensation. Through the introduction of this product line extension, Tiger Beer hopes to strengthen its market position, and increase their market share by attracting a wider range of consumers.

1.1

Market Size

Asia Pacific Breweries Ltd (APB) is one of the most profitable and fast-growing beer companies in Asian regions, operating 30 breweries, and 40 brands in 14 Asian countries in 2012. APB’s most popular brand, Tiger, has 35% of Singapore beer market share in 2011 (Kang 2013). Statistics shows that consumption volumes of beer had increased with a compound annual growth rate (CGAR) of 4.3% from 2008 to 2012, reaching 96.4 million litres in total, with $915.2m revenue in 2012 (Marketresearch.com 2013).

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1.2

Market Positioning

Figure 1.2: Perceptual Mapping of Singapore Major Beer Brands Tiger has positioned itself to be an affordable beer with standard alcohol content. Compared to Guinness, Tiger is still low-priced (Fairprice Online 2014). When it comes to its alcohol content percentage, Heineken outweighs Tiger and some major beer brands (The Raven 2012).

1.3

Market Segment

Tiger Radler mainly targets young adults between ages eighteen to mid-thirties, which consists largely of Generation Y: the most influential group to target (O’Donnell 2006). The age group of 18-35 is best suited to for a category of consumers seeking a fun lifestyle.

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT 1.4

Product Life Cycle

Figure 1.4: Product Life Cycle (PLC) of Tiger Radler

Tiger Radler is still in the introduction phase of its product life cycle, and is being heavily advertised, to create product awareness. At this stage, sales may still be low. However, sales volume is expected to grow by 4-6% the following year in Singapore (Kwok 2013, para. 12) once Tiger Radler successfully captures market awareness and demand, and reaches the ‘Growth’ stage of the product life cycle.

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2. Competitors

Tiger Beer has taken a bold move to dive into the fruity beer market by introducing a lemon flavoured beer with low alcohol content: Tiger Radler, which is positioned as a refreshing alternative that caters to the younger beer consumers. This puts Tiger Radler in direct competition with other established beer brands, and other fruit flavoured

2.1

beers,

as

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indirect

competition

with

soft

drinks.

Direct Competitors

Tiger Radler faces direct competition from major beer brands like Carlsberg from Denmark and San Miguel from Philippines (Aquino 2013). It is also in direct competition with fruit flavored beers such as Taiwan Fruit Beer (Edsmond 2013), which has a larger selection of flavours than Tiger Radler, which only comes in a lemon flavour. In this report, we will be comparing Tiger Radler against Carlsberg as both have similar target market. Moreover, its market position is the second in the Singapore beer market (Carlsberg 2014), comparable to Tiger. Lastly, the degree and extent of the marketing strategy between the two brands are almost alike.

2.2

Indirect Competitors

Tiger Radler is also in indirect competition with other non-alcoholic refreshing beverages, such as Coca Cola and Sprite. These drinks are advantageous as they are subject to less restrictions such as legal drinking age or liquor license for selling.

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3. Target Market 3.1

Primary Target Market

3.1.1 Demographic

Tiger Radler targets the younger consumers, mainly the young adults in their early twenties to mid-twenties, falling under the Gen Y subculture, who are more energetic and fun-seeking by nature (McCrindle 2006).

Gen Y tends to be more adventurous and would exemplify variety-seeking behaviour. Hence, we believe Tiger Radler appeals more to them, as they also fall under the ‘innovators’ and ‘early adopters’ groups (Nestle Professional 2013).

Table 3.1.1: Demographics of Tiger Radlers’ Primary Target Market vs. Carlsberg

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT 3.1.2 Psychographic

Beer drinking is considered a form of relaxation after work or studies social interaction, as Singaporean consumers are occasionally involved in social gatherings (Euromonitor 2013).

Table 3.1.2: Psychographics of Tiger Radler’s Primary Target Market vs. Carlsberg’s

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3.1.3 Behavioral

Table 3.1.3: Behaviours of Tiger Radler’s Primary Target Market vs. Carlsberg’s

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3.2

Potential Market Segments

3.2.1 Demographics

One of the potential market segments for Tiger Radler would be Tertiary students. Their age ranges from eighteen to mid-twenties, who are actively engaged in social gatherings and seek to unwind after studying. By infusing Radler’s natural lemon flavour, they would be perked-up with a sense of energy and invigoration, while still able to enjoy the taste of the original brew.

Table 3.2.1: Demographics of Tiger Radler’s Potential Target Market.

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT

3.2.2 Psychographic

Tiger Radler would provide this potential segment a fun and refreshing sensation, which feels energizing any time of the day. Tertiary students seek for something to perk themselves up with their busy schedules.

Table 3.2.2: Psychographics of Tiger Radler’s Potential Target Market.

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3.2.3 Behavioral

Tiger Radler’s potential target market consists of young adult consumers who just reached the legal drinking age of 18 who fall under the user statuses of ‘potential’ and ‘first-time’.

Table 3.2.3: Behaviours of Tiger Radler’s Potential Target Market

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4. External Influences 4.1

Culture and Subculture

The consumption of Tiger Radler fits in with Singapore’s cosmopolitan culture as it sells itself as a product to be consumed with a variety of cuisines, given its refreshing aftertaste that goes well with food. It also helps with the spiciness of most local Singaporean dishes, such as Laksa (PopSpoken 2013). Therefore, Tiger Radler complements this multicultural aspect of Singapore, allowing it to be suitable in consuming together with various cuisines.

Within the Singapore society lies other subcultures. As Tiger Radler mainly aims to target consumers aged 18-35 years old, the subcultures that influence the consumption would mainly be Gen Y. The youth market has more disposable income, and is constantly on the look out for new product advances given their mass exposure to technology. Gen Y constitutes members with “a strong sense of independence and autonomy” who tend to “select and consume products that help them define who they are, what is important to them and what they value in life”. They have “great confidence and trust in the brand names of their choice” who will “switch their loyalty instantly to those marketers that get ahead of the fashion curve”. Gen Y favours attention-grabbing advertisements, which has influenced Tiger’s successful marketing campaign for Tiger Radler (Quester, Hawkins & Pettigrew 2006). Therefore, Tiger Radler’s new flavour complements the above subcultures’ needs in line with its target segment, by offering an innovative flavour and consumption recommendations. It also boasts an image of success and independence as drinking beer has become part of a sophisticated lifestyle in social occasions and work gatherings, what more with Tiger Radler being able to be consumed at almost any time of the day – as it has a very low alcohol content level of 2% (Lee 2014). Hence, it is geared towards as a lifestyle drink that is new and innovative in its concept.

Given Tiger Radler’s attributes, it appeals more to the ‘Innovators’ adopter category, as they constitute mainly of young adults. They are also usually the first to try new products/extensions, willing to take risks with new products that are heavily marketed

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT when launched – which Tiger Radler has been successful of, evidently from its print advertisements at bus stops and other public places. They are “visible and opinionated” and appreciate brands and adverts that stand out (Woolvett 2013).

4.2

Demographics

The size, age-group distribution, gender characteristics and socio-economic factors such as education and income of the population in question, all affects Tiger Radler’s overall demand (Quester, Hawkins & Pettigrew 2006). According to the statistical report on Singapore’s demographics dated during 2013, there was an increase in population size by 1.6%. It has been increasing relatively gradually over the past 5 years, which is a positive sign for Tiger in forecasting higher overall demand as it can now reach out to more consumers (Singapore DOS 2013). The age-group distribution in Table 1 shows that the larger proportions mainly lie within the age bands of 15-24 year olds (18%) and 25-54 year olds (50%) (IndexMundi 2013). As these compose of Radler’s main target segments, it will help in capturing more demand and consumption.

Table 4.2: Singapore Age Structure 2013

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT Educational levels have generally improved, which is beneficial for Tiger, as educated people are more informed and can make better purchase decisions, increasing consumption of Tiger Radler, as its new product information will be easily accessed and approved amongst the highly educated consumers (Singapore DOS 2013). Sex composition ratio suggests an outnumbering of females to males (Singapore DOS 2013). As Tiger Radler is considered a light beer, it appeals mainly to the preference of females. Therefore, Tiger Radler would enjoy successful demand as it can now cater to a larger female population.

4.3

Group Influences

Reference groups refer to groups in which a consumer would use as a basis for their consumption behavior, by adopting the “presumed perspectives or values” of the group (Quester, Hawkins & Pettigrew 2006). The below is an explanation of the three main influences. Informational influence is when someone adopts the behavioural norms of the reference group as informational assets (Quester, Hawkins & Pettigrew 2006). For example, as Tiger Radler markets itself as a light and refreshing beer which can be consumed anytime of the day, such as during lunch or client appointments, it would be easier for a colleague to follow suit what the rest orders instead of studying the menu.

Normative influence refers to following a group’s behavioural norms in order to attain some sort of recognition (Quester, Hawkins & Pettigrew 2006). As Tiger Radler markets itself as an up and coming new beer, it would be popular amongst groups of friends during social gatherings and therefore ordering it would gain someone ‘social approval’. Identification influence occurs when an individual uses ‘perceived group norms and values as a guide for their own attitudes or values’ (Quester, Hawkins & Pettigrew 2006). Tiger Radler projects itself as a fun, light and sophisticated product. Hence, in

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT order to attain recognizable ‘identification’, consumers may purchase Radler to complement the social dynamics within their group of friends.

Overall, Tiger Radler consists of all three influence types, although with more emphasis on normative and identification influences, due to the ‘lfestyle’ concept it aims to portray.

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5. Internal Influences 5.1

Needs and Motives

Murray (1938) described a need as a, "potentiality or readiness to respond in a certain way under certain given circumstances." In a consumer behaviour context, a motive is the drive to satisfy human needs, both psychologically and emotionally, through the purchase of products and services (Cherry 2012).

Here, we will use Maslow’s Hierarchy of Needs to exemplify the different levels of needs (Rosen 2011).

Figure 5.1.1: Maslow’s Hierarchy of Needs (Rosen 2011)

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT The Department of Health in the UK has done researches for over a year and has come up with 9 different types of drinkers (BBC News 2008). They are:

Table 5.1.2: The Nine Types of Drinkers

From the above, consuming beer, like Tiger Radler, will be able to satisfy mainly “Belonging and Love Needs” and “Esteem Needs”. In general, numbers 3, 4, 5, 6 and 9 types of drinkers would drink to fulfil their “Belonging and Love Needs”, where they would like to be a part of a community or social group. Numbers 1, 2, 7 and 8 types of drinkers would drink for their “Esteem Needs”, where they would like a confidence boost or stress relief.

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT 5.2

Perception

In marketing, perception is concerned about how a consumer views a product or service. Products are factory created, but brands are created in the mind (Ries & Trout 2000). Over the years, Tiger has established its position in consumers’ minds and has formed perceptions in them which consists of exposure, attention and interpretation.

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Figure 5.2: Process of Perception (McGraw-Hill Australia 2011)

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5.2.1 Exposure

The general objective of an exposure is to motivate consumers to purchase a product or service through advertising. Thus, a marketer would utilize various ways to stimulate the consumers’ five senses as they are being exposed. One of such channel is TV advertising. In 2008, an internet community did an online survey with 15,367 members regarding the effects of advertising on the demand for beer. (See appendix 1)

Figure 5.2.1.1: Result of ‘Do you want a beer after seeing its TV advert?’ Survey (Yasumoto-Nicolson 2008)

From the figure above, we can see that TV advertising has influenced more than half the sample size to want to consume beer. This highlights the effectiveness of exposing consumers to an advertisement.

Mass Media is reported to be one of the most vital influencers for teenagers (Mascarenhas & Higby 1993). Tiger has made use of a wide range of media channels to ensure that as many consumers as possible are being exposed to Tiger Radler in Singapore. They are the utility of public spaces, Food & Beverage outlets, events and online.

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Public Spaces

Figure 5.2.1.3 & 5.2.1.4 & 5.2.1.5: Tiger Radler’s advertisement plastered on MRT Stations’ walls

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Figure 5.2.1.6 & 5.2.1.7: Tiger Radler advertisements at bus-stops

Figure 5.2.1.8: Tiger Radler’s commercial at Ngee Ann City’s taxi-stand

The strategic placement of these advertisements allows exposure to the greatest possible volume of people.

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT Food & Beverage Outlets

Figure 5.2.1.9 & 5.2.1.10: Tiger Radler’s advertisement at bars

Figure 5.2.1.11 & 5.2.1.12: Tiger Radler’s advertisement outside restaurants

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Figure 5.2.1.13 & 5.2.1.14: Tiger Radler’s advertisements at Lavender Food Square

These advertisements are targeted particularly to consumers who enjoy a beer at a bar or have a meal with it.

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT Events

Figure 5.2.1.15 & 5.2.1.16: Tiger Radler’s Launch at Dempsey Hill (Chung, C, 2011)

Figure 5.2.1.17 & 5.2.1.18: Tiger Radler Activation at One Raffles Place (Chung, C, 2011)

These events are targeting working adults, which are part of our target segment. The usage of this exposure is very effective as it engages all the five senses, allowing consumers a first-hand experience in getting to know more about Tiger Radler and being able to sample it.

MKTG 1052 BUYER BEHAVIOUR GROUP PROJECT Online

Figure 5.2.1.19: Official Online Website (Tiger Radler 2014)

Figure 5.2.1.20: Tiger Beer introduces the new Tiger Radler [YouTube]

Figure 5.2.1.21: Tiger’s Official Facebook Page

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