BSB126 Marketing Plan - Grade 6 PDF

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BSB 126 MARKETING PLAN NAME: James Staib

STUDENT NUMBER: n10139931

TOTAL WORD COUNT

2158

I. SITUATION ANALYSIS Bundaberg Rum first established its distillery in 1888; The concept to produce rum began due to an oversupply of molasses from sugar production in far north Queensland (Bundaberg Rum, 2019). The distillery began with just five staff, since then Bundaberg Rum has grown into a large-scale operation producing 60,000 plus bottles of rum per day (National Geographic, 2013). Recently Bundaberg has received recognition for the high quality of its products by winning several titles such as: World’s Best Rum 2016, World’s Best Gold Rum 2016 and World’s Best Dark Rum 2017 (Des Houghton, 2017) Bundaberg Rum follows the ethos of always being there for your mates and remaining optimistic when the odds are stacked against you. Bundaberg Rum also believes that this is what unites Australians and makes them unique from the rest of the world (Bundaberg Rum, 2019). Bundaberg rum has been long known for not only the iconic square bottle, but also its quirky advertisements that feature the mascot polar bear Bundy R. Bear. Bundy first appeared in 1961 as a marketing strategy to make Bundaberg’s rum seem less aggressive, and appeal more to a broader demographic of consumers. (Macleod, 2006) Bundaberg rum has created brand exposure through sponsoring both Holden V8 Supercars and the Cowboys NRL team (SpeedCafe.com, 2011; New South Wales Rugby, 2008). Bundaberg’s product offerings provide a broad range for consumers this includes dark rum, spiced rum, pre-mix, mid strength premix, freeze and squeeze and mini collectors’ bottles. Prices in Australia can range anywhere from $4Aud to $140Aud (First Choice Liquor, 2019; Dan Murphy’s, 2019). Bundaberg Rum has been successful in appealing to a wide consumer base and this consists of 60% Men and 40% Women (National Geographic, 2013).

Bundaberg was acquired in 2000 by liquor giant Diageo plc, Diageo’s spirits industry market share for 2018 was a massive 19.8% globally. Diageo is currently the world’s largest spirits manufacturer by revenue (IBIS World, 2019a). Diageo also owns the rum brand captain Morgan; this generates internal competition for Bundaberg Rum and may come at the cost of profit margin for Diageo Plc. Between 2013 and 2018 global Spirits manufactures struggled due to the diminishing consumption of spirits in key global regions like Europe. This has resulted in a projected annual decline of $124.9 billion USD in sales, despite a 6.4% growth of spirit consumption in American and Chinese markets (IBIS World, 2019c). Even though there has been a slump in spirits consumption worldwide, Bundaberg Rum has continued to perform well. Diageo Plc believes this is due to their 2017 ‘Unmistakeably Ours’ campaign, Bundaberg lazy bear line and packaging relaunch. Bundaberg’s parent company has also seen a 5% increase in Rum sales and a 6% increase in Captain Morgan Sales (The Drinks Association, 2018). Australia has benefited from a stable economy over the past 5 years and this has created an increase in disposable income (Trading Economics, 2019). Alcohol consumption trends are generally tied to consumer spending; subsequently this will provide revenue opportunities for Bundaberg Rum (IBIS World, 2019c). Approximately 16.25% of the Australian market aged 18-49 consume bottled spirits, while in contrast only 6% of this market consume Premixed spirits (NADK, 2016) The current spirits market within Australia is highly Competitive; this rivalry is heavily fought through branding, price, taste and distribution (IBIS World, 2019b). II. MARKETING GOAL The marketing goal for Bundaberg Rum will be to focus on Market Penetration into existing consumer segments, and to increase sales volume by 10% from 1st July 2019 until 30th June 2020.

Figure 1. Ansoff Matrix. Adapted from "Marketing" by (Grewal, et al., 2018), p. 273.

III. MARKETING STRATEGY

Target Customers Bundaberg Rum’s Marketing has focused mostly on the psychographic lifestyle group of sporting fans and the Australian self-value of mateship. In the past Bundaberg has also attempted to appeal to a broader consumer demographic, with the introduction of Bundy R. Bear (Macleod, 2006).However this type of marketing would appeal more to men, or older generations that prefer to watch tv and sporting events (EBS, 2014). The following table below has been used to Evaluate the attractiveness and revenue potential of two market segments. Identifiable

Generation Y/Millennials

Women

Substantial

Population: 3,231,401

Population: 11,855,241

(.id community, demographic resources, 2016 )

(.id community, demographic resources, 2016 )

Facebook, Instagram, Snapchat,

77% of women use Facebook as their

Mobile Advertising and Twitter

preferred social media network for

(Taline Badrikian, 2019)

following brands

Reachable

(DataDale, 2018)

Responsive

Unknown

Unknown

Profitable

Gross Household earnings of

40% of Bundaberg Rum Consumers are

Approx. $113,152 per annum

Women

(mccrindle, 2015)

(National Geographic, 2013)

Figure 2. Evaluation of segment attractiveness. Adapted from "Marketing" by (Grewal, et al., 2018), p. 181.

After assessing the attractiveness of these two segments; it would be a safer and more effective strategy to target the demographic of women. Almost half of Bundaberg Rum consumers are women at 40% (National Geographic, 2013), this identifies that there is large

pre-existing market potential for our products. The current marketing budget of $50,000Aud limits our ability to develop a new product targeted for this segment, however within this budget it is possible to repackage or promote the existing product range. There currently exists some ‘Reachable’ overlap between Gen Y and Women as shown in Figure 2, this would allow us to target both segments when advertising through Facebook. The focus of this marketing approach will be to penetrate the existing market more successfully with our existing product range as shown in Figure 1.

Data for 2016 shows that women make up 50.7% of the population or 11,855,241 people (.id community, demographic resources, 2016 ). By 2028 women will represent approximately 75% of discretionary spending worldwide, presenting trillion-dollar opportunities (Bec Brideson, 2019). The alcohol consumption market share for Australian women identifies that 11% of all purchases are premixed drinks and 16% are bottled spirits (NADK, 2016).

Value Proposition Bundaberg Rum has a broad range of market offerings and generally positions its price in the centre between discount and premium rum brands. Bundaberg rum has marketed the perception that its rum is unique from others and brings mates together. As displayed in the perceptual positioning map (Figure 3) many brands of rum have formed a cluster, positioned closely in both price and target segments. Bundaberg Rum has currently positioned itself as an affordable medium range rum targeted towards men. In comparison Bacardi Rum is positioned as a low-priced affordable rum mostly targeted at women. Bundaberg needs to reposition its brand perception and value proposition to truly capture the female market. Bundaberg Rum will need to shift its existing perceptual value to the Ideal Point; in order to create distance from its competitors. By repositioning to this point Bundaberg can fill the value gap that exists for a medium-priced rum for women. Bundaberg’s brand can also appeal to the high price segment of women using existing premium quality products like the Master Distillers range. Bundaberg Rum will need to Invest more in positioning research to better evaluate competitors’ positions, consumer preferences and modify its long-term positioning strategy.

Figure 3. Perceptual Map. Adapted from "Marketing" by (Grewal, et al., 2018), p. 190.

IV. MARKETING TACTICS

PRODUCT Bundaberg Rum is a 130-year-old brand that is nationally recognised and trusted, Bundaberg has always appealed to its core customer with its quality and value for money. The product offered by Bundaberg comprises a broad range of different rum styles and at different price points; this ranges from $4Aud to $140 (First Choice Liquor, 2019; Dan Murphy’s, 2019). Given the nature of alcohol it can be difficult to market features and associated services as this is a noncomplex type of consumer product. However, Bundaberg is no longer just a dark rum producer and offers a product line including white, spiced rum, mango/passionfruit, pineapple/coconut and high-end liqueurs. This diverse product line can shift the marketing focus away from a boring coke and bundy, and capture drinkers that enjoy a variety of different rums and cocktails. This expansion and creation of these additional products can

satisfy the changing needs of Bundaberg’s customers; and prevent market saturation and customers switching over to competitors (Grewal, et al., 2018, p. 343).

Bundaberg Rum should create partnerships and even co-branding with Bundaberg Ginger Beer and other iconic Australian brands to further develop its product. By focusing on these new products, Bundaberg could repackage its bottles by attaching cocktail books and recipes. These recipe books could include cocktails such as the dark and stormy incorporating ginger beer and dark rum.

PRICE Bundaberg Rum’s company objective for pricing will be tied to the marketing goal to increase sales volume by 10% and build customer satisfaction. This pricing strategy will include a mixture of both customer orientated and sales orientated objectives. Bundaberg Rum has situated its pricing between the high-end rum brands such as ‘Matusalem’ and lowend brand like ‘Negrita’. Bundaberg’s pricing towards the centre creates a position where segments that are looking to spend a little less or a little more; can find an attractive price entry point. For those segments that are looking for a limited premium range or to purchase online, Bundaberg also offers the blenders edition and collectors bundle (Bundaberg Rum, 2019). Bundaberg Rum currently retails at around $42Aud for a 700ml bottle, while its sister brand Captain Morgan retails at approximately $43Aud per bottle. However, unlike Bundaberg Rum Captain Morgan is constantly priced lower in Australia through specials and multibuy discounts. Captain Morgan is discounted to the point where its perceived value may no longer be as high as that of Bundaberg’s regardless of its $1Aud higher retail price. Consumers in the market can use the pricing of a product as an indicator to judge its quality, provided they are unfamiliar with the category of product (Grewal, et al., 2018). This is a very interesting take on pricing strategy that Diageo practices when retailing its two rum brands.

At current pricing levels the lower price buyers may be willing to pay a slightly higher price to encourage and support local rum producers. Rather than setting standard retail prices much lower to take away business from competitors; Bundaberg can provide value for customers through offering discounts and multibuy offers.

PLACE Bundaberg Rum’s product lines are currently available in almost all alcohol retailers and pubs throughout Australia. Due to liquor licencing in Australia; Bundaberg’s primary distribution channels comprise large liquor retailers such as Dan Murphy’s, First Choice and BWS. These large distribution channels provide both retail distribution, online sales and product placement for Bundaberg ’s operation. By means of Selling through large retailer channels, Bundaberg can transport directly to distribution warehouses reducing transport overheads. This established supply chain prevents the shortage of Bundaberg Rum to retailers and can better project and control necessary demand and inventory levels. Bundaberg utilises a multichannel sales model offering direct sales of its collectors’ bundles and liquors only through its own website. Bundaberg has been successful in its current choice of distribution channels; however future distribution might expand into high end retailers offering its exclusive product range.

PROMOTION The current objective for Bundaberg Rum will be to more effectively penetrate the existing segment, by advertising through frequently used or high-volume communication channels. Currently Bundaberg Rum as a brand receives very little interest from google users and on average receives less than 1 google search per day (Google Trends, 2019) For Bundaberg to realise its marketing goal and reach customers, it must effectually communicate the value of its product offerings through a multichannel marketing communication strategy (Grewal, et al., 2018, p. 423). For producers to acquire a large market share they must be well exposed and appeal to a broad demographic of consumers (IBIS World, 2019b).

Media Used Facebook (Internet/Direct)

Taxi Ads (Outdoor)

Recipe Brochure (Product Packaging)

Reason

Goals

Cost

Create advertisements using Facebook feed Collection this will deliver a more personalized and targeted communication to segment (Women). This type of Facebook advertisement is formatted for the Facebook mobile application. 77% of women use Facebook as their preferred social media network for following brands (DataDale, 2018) Create ‘Full Wrap’ advertising on taxis that operate around Brisbane CBD and Fortitude Valley. Applying this type of communication might be successful given its proximity to nightclubs, bars and casinos.

Target 4 million people over 12-month period divided into 4*6-week campaigns at Approx. $6.40Aud per 1,000 impressions (Lindsay Bennett, 2018).

$25,600Aud

Attaching cocktail recipe brochures to physical product line to make Bundaberg Rum appeal to a wider demographic. This will also make it appeal as a diverse product not just a coca cola mixer.

Approx. $2000 per vehicle for 4 weeks* 6 Taxis. Costings might vary.

$12,000Aud

Approx. $1,000Aud per 10,000 recipe brochures = 124,000 cocktail recipe brochures (CMYK Printing, 2019)

$12,400Aud

Total Cost: $50,000 Figure 4. Illustrative Marketing Goals. Adapted from "Marketing" by (Grewal, et al., 2018), p. 455.

The financial limitations of Bundaberg Rum’s budget mean potentially we are not utilising the number, and types of communication necessary to achieve current marketing objectives.

V. REFERENCES .id community, demographic resources. (2016 ). Retrieved from .id : https://profile.id.com.au/australia/five-year-age-groups (2019, May 09). Retrieved from First Choice Liquor: https://www.firstchoiceliquor.com.au/search?q=bundaberg&sort=-price&page=1 (2019, May 09). Retrieved from Dan Murphy's: https://www.danmurphys.com.au/search?searchTerm=bundaberg+rum (2019, May 10). Retrieved from Diageo: https://www.diageo.com Australian Dental Association. (2017, January 19). The Australian Dental Health Plan:Achieving Optimal Oral Health . Retrieved from ACT Department of Treasury:

https://static.treasury.gov.au/uploads/sites/1/2017/06/C2016-052_Australian-DentalAssociation.pdf Bec Brideson. (2019, May 14). The next disruptive market worth $28 trillion? It’s you. Retrieved from Business Chicks: https://businesschicks.com/female-consumers-market-share/ Bundaberg Rum. (2019, May 10). The Story Behind Our Liquid. Retrieved from Bundaberg Rum: https://www.bundabergrum.com.au/unmistakably-ours Captain Morgan. (2019, May 10). Captain Morgan: Our Products. Retrieved from Captain Morgan: https://us.captainmorgan.com/rum-drinks CMYK Printing. (2019, May 16). Cheap Printing Service in Australia. Pricing in AUD. Retrieved from CMYK color online: https://www.cmykonline.com.au/ DataDale. (2018, March 25). DIGITAL MARKETING TO WOMEN. Retrieved from DataMan Group Direct: https://www.datamangroup.com/digital-marketing-to-women/ Des Houghton. (2017, May 11). Best Dark Rum in the World 2017 goes to Bundaberg Rum for its Master Distillers’ Solera. Retrieved from The Courier Mail: https://www.couriermail.com.au/lifestyle/food/qld-taste/best-dark-rum-in-the-world-2017goes-to-bundaberg-rum-for-its-master-distillers-solera/newsstory/3c6b02284ac0705d1aa3ede62bde66fc EBS. (2014). Evolutionary Behavioural Sciences. Washington, DC : American Psychological Association.

Google Trends. (2019, May 10). Retrieved from Google: https://trends.google.com/trends/explore?geo=AU&q=rum,bundaberg%20rum Grewal, D., Levy, M., Mathews, S., Harrigan, P., Bucic, T., & Kopanidis, F. (2018). Marketing (2nd ed.). Sydney: McGraw-Hill Education. IBIS World. (2019a, May 10). Industry Market Research, Global Industry Reports, Global Spirits Manufacturing, Major Companies. Retrieved from IBIS World: http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/gl/industry/majorcompan i es.aspx?entid=400#MP10166 IBIS World. (2019b, May 09). Industry Market Research, Global Industry Reports, Global Spirits Manufacturing, Competitive Landscape. Retrieved from IBIS World: http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/gl/industry/competitivela ndscape.aspx?entid=400 IBIS World. (2019c, May 11). Industry Market Research, Global Industry Reports, Global Spirits Manufacturing, Industry Performance. Retrieved from IBIS World: http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/gl/industry/currentperfor mance.aspx?entid=400

Lindsay Bennett. (2018, March 13). Australia has the most expensive Facebook ads in the world, study finds. Retrieved from AdNews: http://www.adnews.com.au/news/australia-has-themost-expensive-facebook-ads-in-the-world-study-finds

Macleod, D. (2006, August 19). Bundy Bear – Bundaberg Rum Mascot. Retrieved from The Inspiration Room: http://theinspirationroom.com/daily/2006/bundaberg-rum-bundy-bear/ mccrindle. (2015). Australia’s generations by wealth and income. Retrieved from mccrindle: https://mccrindle.com.au/insights/blog/australias-generations-wealth-income/ NADK. (2016). Drinking Habits of Australians. Retrieved from National Alcohol & Drug Knowlagebase: https://nadk.flinders.edu.au/kb/alcohol/consumption-patterns/drinkinghabits-of-australians/ National Geographic. (2013, October 24). Bundaberg Rum Megafactory: Facts. Retrieved from National Geographic: https://www.nationalgeographic.com.au/people/bundabergrum-megafactory-facts.aspx New South Wales Rugby. (2008). Sponsors & Partners. Retrieved from New South Wales Rugby: http://nswrugby.com.au/SponsorsPartners/SponsorsPartnersOverview.aspx Queensland Government . (2019, May 10). Business Queenlsand . Retrieved from Queensland Government : https://www.business.qld.gov.au/starting-business/planning/marketcustomer-research/swot-analysis/example SPEEDCAFE.COM. (2011, December 05). Bundaberg Rum pulls out of V8 Supercars. Retrieved from SPEEDCAFE: https://www.speedcafe.com/2011/12/05/bundaberg-rum-pulls-out-of-v8supercars/ Taline Badrikian. (2019, May 13). Top 5 Marketing Channels to Reach Millenials. Retrieved from Laveh Inbound Marketing: http://www.laveh.com/blog/marketing-channels-to-reachmillennials The Drinks Association. (2018, January 30). Bundaberg Rum leads growth for Diageo Australia as net sales fall. Retrieved from The Drinks Association: http://www.drinkscentral.com.au/4751?Article=bundaberg-rum-leads-growth-for-diageoaustralia Trading Economics. (2019). Australia Consumer Spending . Retrieved from Trading Economics: https://tradingeconomics.com/australia/consumer-spending

VI. APPENDICES Culture

Bundaberg Rum has positioned itself as a company that aligns with the shared Australian culture of mate ship and the ethos of the Aussie battler. Many of Bundaberg Rums advertising through television has been ce...