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BSB 126 MARKETING PLAN

Word count: 1701 I. SITUATION ANALYSIS Microenvironmental factors Bundaberg Rum, established in 1888, markets itself as inextricably linked to the Australian psyche, its values and lifestyle; being, all locally grown, locally produced and high quality. Producing the “world’s best Rum” feeds into Australia’s national pride and competitive spirit (Bundaberg, 2019). Drinking another rum would be un-Australian, but there is stiff competition. However, this is an advantage for Diageo, the British company who purchased Bundaberg Rum in 2000. Diageo, a global leader in beverage alcohol enjoys approximately 22% of the world-wide market, with over 200 brands, large and small, local and international in 180 countries (Diageo, 2018). This means that Bundaberg rum, is part of a larger stable, which has the financial resources and marketing ability to pivot the growing market share, while competing with brands from its parent company. As such, Diageo is able to segment its consumer base, appeal to changing threads or to in fact, drive changes through sophisticated marketing campaigns. See appendix 1 for the full SWOT analysis.

Macroenvironmental factors Bundaberg Rum is an iconic Australian rum brand with a loyal customer base. With the home of the rum in Queensland, it enjoys its strongest market share in the sunshine state. In any given four-week period, almost half the Australians Bundaberg rum consumers are from Queensland (Roymorgen.com, 2015). As suggested above, a sense of regional pride may contribute to the spirit’s popularity in its home state, especially since this same over-representation of Queenslanders when it comes to XXXX consumption (Price, 2015). When Bundaberg was taken over by international giant Diageo in 2000, the company moved most of its production to Western Sydney in order to concentrate on production of pre-mixed drinks and their base rums; in the process saving costs. Recent advertising campaigns have a strong male focus and a predominantly nationalistic focus. An example of this is the recent ‘Lazy Bear’ campaign which features four males swinging in a hammock, consuming the drink. This positions the market at men aged 20-40 year of age; creating a targeted consumer base whose values and ideas align with the ones presented by Bundaberg Rum. In another focus, alcoholic ginger bear has taken off across pubs, clubs and bottle shops in Australia, as part of the surge in popularity of craft beers and alcoholic beverages. Here lies a clear opportunity to capitalize on this trend by adding Bundaberg Rum and repositioning the ‘Dark and Stormy’ line to capture a greater market share; especially amongst women and the youth market. This would

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consolidate the move into pre-mixed drinks for the company, and with the right marketing campaign, move beyond the image of ‘Bundy and coke, blokes and footy’ (Cooper, 2018). Look to appendix 2 for the full CDSTEP analysis.

II. MARKETING GOAL Reposition the ‘Dark and Stormy’ product line to have greater market penetration in the youth market (18-35 years); with a focus on female consumers. The goal being to increase sales by 20% in the first 18 months of this repositioning.

III. MARKETING STRATEGY Targeting: The best market segment is used in order to achieve the marketing goal. In this case the youth and female demographics must be targeted. The other aspects of geographic, psychographic and benefits are analysed to achieve the best possible market segmentation. Table 1: Segmenting the Market Segmentation

Segment

Reasoning and explanation

Method Geographic

Improved uptake outside of

Bundaberg Rum have a stronghold on the

Queensland.

Queensland Rum market, however same share is not seen across the rest of the domestic

Demographics

Age: Generation Z / 18-35

market. As the alcoholic industry sees a decline in sales amongst younger generations it is important the product be marketed to suit, to increase

Gender: Female focus

sales across this demographic. The perception that rum is seen as a predominantly male drink incurs the need for focused marketing towards female audiences,

Financial: low-medium – high

as it represents a large potential market. The cost of pre-mixed drinks is often higher

income

than that of bottles spirits, therefore creating the need for a suitable disposable income to be able to purchase the product readily and repeatedly. Younger audiences, especially that of 18-25 have limited income incurring that

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Psychographic

Lifestyle: Having fun with

cheaper pre-mixed options are of great value. The consumption of Bundaberg Rum products

friends

as a party drink or to be consumed at social functions or pre-drinking before a night out is

Social Trends: alcoholic ginger

integral to the success of potential new lines. The popularity of alcoholic ginger beer has

bear and craft beer

taken off as a new trend and is consequently a great marketing opportunity for Bundaberg rum. This trend in corroboration with the popularity of craft beer, creates an opportunity for the ‘Women’s drink’ in craft

Benefits

Valuing the product

Sought

beer café’s around the country. The main goal of the consumer is to enjoy a delicious alcoholic beverage with the side benefit of engaging with a trendy product.

Value Proposition: ‘Dark and Stormy’ is a cocktail made with dark rum, ginger beer, served over ice with a slice of lime. It last enjoyed popularity in the 1980’s (Epicurious.com, 2002). Dark rum has long been the drink associated with sailors and the classic ‘Dark and Stormy’ is a favourite of the yachting community (Bundaberg.com, 2019). Bundaberg Rum are makers of fine dark rum and quality ginger beer. They possess the core ingredients to make the classic cocktail and have the product in a 500ml bottle and a 375ml can. Diageo have the production capability to produce a 300ml bottle, sold in 4 packs, to compete favourably in the pre-mixed market that would have greater appealed to the target audience of the marketing campaign, 18-35 year-olds, in particular women. They are a convenient size to grab and take to a social gathering, especially to pre-drinks before a night out. Women prefer the glass-bottles, as they appear more feminine and are more enjoyable to drink out of; hence, reducing the hyper-masculine stereotype Bundaberg Rum has previously embodied. There is an opportunity to market them as a cocktail in a bottle, which would appeal to women aged 18-35; and compete with other pre-mixed cocktails this demographic commonly consumes. A cocktail is typically a more feminine choice; however, it is not limited to a girly persona as it also associated with having fun, in a more sophisticated manner while being an affordable indulgence. The campaign could link into the yachting association, to position target consumers as, young, sophisticated and on trend. All things 1980’s is now popular again and this connection would appeal to the switched-on generation z. Craft beer is booming in Australia. Alcoholic ginger beer is extremely popular, with a significantly increasing market share. Promoting Bundaberg Rum’s ‘Dark and Stormy’ product line fits in perfectly with the current trend to explore new products, flavours, experiences, away from traditional beer and wines.

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Positioning Statement For on tend 18-35 year-old’s, 300m bottled Dark and Stormy pre-mixed cocktail is the optimum product repositioning for market development.

IV. MARKETING TACTICS Product The current brand identity is closely linked to the broader Bundaberg Rum label. The ‘Dark and Stormy’ line would need to focus would need to focus on a branding change to reposition the line more competitively. Bundaberg Rum is perceived as a masculine alcoholic beverage. It is more likely to be consumed by football “yobbos” who enjoy a brawl. These stereotyped connotations may work for the existing loyal customers of Bundaberg Rum’s, rum and cola beverages, but would be a big negative to attracting new customers beyond the working-class male demographic. Rebranding dark and stormy cocktail pre-mixed as the preferred drink of a more sophisticated feminine palate, Bundaberg could achieve market penetration to a whole new generation of consumers. The overall product is changed to a 300ml glass bottle like that of Smirnoff ice and similar products (see appendix 5 for an example). This design is much preferred by feminine audiences and projects as being classier and more sophisticated; appealing to the youth market.

Price ‐ Company objective The goal for Bundaberg is to rebrand the dark and stormy line to appeal to new customers. This market development of rebranding a pre-existing product will overhaul the look of the Bundaberg line. The overall price should be low in order to cater to the lower income bracket of 18-35 year-olds; thus allowing for increased sales as set in the marketing goal. Costs As the Dark and Stormy product is already produced in cans and larger bottles, the transition would be small as well as being easy to manage and low cost. Bundaberg have all the pre-existing resources to produce dark and stormy in 300ml bottles. The glass is already used in their soft drink lines and their rum bottles. The 300ml bottles are also produced by Smirnoff, which is owned by Diageo, therefore for the knowledgebase is there for production. The overall costs of the change in bottle would be low for Bundaberg allowing for potential increased sales and cost margins. Competition The new line of Dark and Stormy will need to compete with a wide range of different products within Bundaberg’s own lines, including the existing Dark and Stormy products. However, a premium Dark

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and Stormy bottled is exclusive to that form of product and could potentially establishing itself as a market leader. Customers Customers are not as likely to pay around $85 for a carton of the Dark and Stormy Product and are more likely to spend $15-$30 for a smaller amount of alcohol. The perceived value of the product is found in its premium feel and taste out of a glass bottle. Channel Members Channel members will not be significantly affected by the change in packaging as it only effects the way the product is boxed up. The current 500ml dark and stormy sells for approximately $9 per bottle. This is probably good value for money but not a convenient size for the target audience of the campaign. The best price for a four pack of Dark and Stormy bottles will be around $20 as it sits at an affordable price and represents value for the target demographic. The dark and stormy 375ml can sell for $85 per carton of 24; again, the price per can is not appealing to the youth demographic. The $85 price point is too high for a single alcohol transaction; particularly when taking into consideration the personal finances of the proposed target demographic. Additionally, it is inconvenient to buy a whole carton on the way to a social occasion, particularly as the youth market want convenience and spontaneity. Hence, a six pack of pre-mixed drinks is the perfect addition to any go-getter’s night out; primarily as this will position ‘Dark and Stormy’ at a more competitive price point.

Distribution ‐ Bundaberg runs on a self-sustaining distribution system. The production of standard rum lines, premixed drinks and non-alcoholic drinks were moved to western Sydney in order to save costs (Wrigglesworth, 2014). Other premium rum lines are still being produced in the distillery in Bundaberg. The product can be distributed through normal means including bottle shops, night clubs and Pubs as well as any licensed premise. Bundaberg can potentially have the long-term goal of establishing the Dark and Stormy bottles as a staple in venues across Australia. The distribution of products through online sources is another sub focus for Bundaberg as consumers transition towards buying online.

Promotion – With a budget of $50000, Bundaberg must completely re-market their Dark and Stormy product through the means of appealing to the youth and a more feminine market as well as increasing sales outside of Queensland. Table 2: Objective and Task Objective Increase sales amongst people aged 5|Page

Task Position the Dark and Stormy line as cheap,

Media Social media

Cost - Free accounts and posts via social media

Explanation / Reasoning Some 88% of 18-29 yearolds use social media (Nanji, 2018). This allows

18-35 with a focus on females

sophisticated, feminine and trendy.

Increase sales outside of Queensland

Use local radio in Sydney, Melbourne, Adelaide, Canberra and Perth to increase awareness of the new product.

Radio

- $5000 for cheap and quick ads across a large volume in different capital cities

Increase sales outside of Queensland

Use stalls in music festivals in Sydney, Melbourne, Adelaide and Perth to promote the product.

Music festivals

- $35000 will be distributed across different music festivals for stalls and selling the product.

presence - $10000 on promoted ads via Facebook and Instagram.

for great penetration as Bundaberg can further establish their existing social media presence through posts on Facebook and Instagram. They can also utilise ads across the popular platforms that can achieve hundreds of thousands if not millions of views in a short space of time. More than 78% of 18-24 year-olds are listening to more than 12 hours a week of radio in the five metropolitan capital cities alone (Nielsen Radio Ratings, 2011). This strongly suggests that Bundaberg can promote their product successfully to their target market using only a small allowance. Music festivals attract hundreds of thousands of people each year across Australia and therefore represent a great opportunity for Bundaberg to promote their new product. The stalls can be set up to sell exclusively the new Dark and Stormy bottles or if bottles are not available, simply sell the Dark and Stormy product. This large exposure opportunity could potentially establish thousands of new customers and create trends surround the drink and the new product.

V. REFERENCES Kay R, Buchanan K 2014. Sydney Rum? Bundaberg Rum to move bottling operations south. ABC.net. https://www.abc.net.au/local/stories/2014/05/16/4005996.htm 6|Page

Bundaberg 2019. The Story Behind Our Liquid. Bundaber.com. https://www.bundabergrum.com.au/ BWS 2019. Smirnof. BWS.com https://bws.com.au/product/742237/smirnoff-ice-red-bottles-300ml Lynchy 2017. Bundaberg Rum Launches Major New Campaign. campaignbreif.com. https://campaignbrief.com/bundaberg-rum-launches-major-n/ Diageo 2019. Our Business. Diageo.com. https://www.diageo.com/ Degroff D 2002. Dark and Stormy. epicurious.com. https://www.epicurious.com/recipes/food/views/dark-and-stormy-235964 Nanji A 2018. Social Media Use in 2018: Platform, Age, and Visit Trends. Marketingprofs.com. https://www.marketingprofs.com/charts/2018/33723/social-media-use-in-2018-platform-and-agetrends National Alcohol & Drug Knowledgebase. Drinking Habits of Australians. Nadl.flinders.edu. https://nadk.flinders.edu.au/kb/alcohol/consumption-patterns/drinking-habits-of-australians/ Passport 2019. Brand Shares Bundaberg (Diageo Plc). Passport. http://www.portal.euromonitor.com.ezp01.library.qut.edu.au/portal/statisticsevolution/index# Roy Morgan 2015. Bundy: It’s a Queensland thing. Roymorgan.com. http://www.roymorgan.com/findings/6464-bundaberg-rum-big-in-queensland-june-2015201509210508 Ultimate Rum Guide 2019. Australia. Ultimaterumguide.com. http://ultimaterumguide.com/australia/

VI. APPENDICES [insert or attach your appendices – 2 pages max] Appendix 1: SWOT Analysis Strengths 7|Page

SWOT Analysis Weakness



Iconic Australian Brand



Loyal customers

that causes some drinkers to become



Dominant in the Queensland market

aggressive



Dominant Australian rum brand



Limited rum market in Australia



Domestic distillery



Seen as a predominantly male drink



Variety of Rum products and mixers



Perceived as a “working man’s” drink



Introduced premium rum products

Opportunities 



The perception of rum as an alcohol

Threats

Growth in domestic and overseas



Other Rum Brands

markets, with a specific focus on states



Decline in drinking in new generations

other than Queensland.



Competition from



Potential growth in Gen Z sales



Potential product in alcoholic Ginger beer due to social trends

 Potential growth of non-alcoholic drinks Appendix 2: CDSTEP Analysis

CDSTEP – Bundaberg rum Culture Iconic Australian Brand with loyal customers. Often perceived as an Demographics

aggressive male drink. Must be able to impact all ages over eighteen to attempt to capture

Social Trends

different demographics. Potentially target a feminine market. Young Australians are drinking less than other generations, affecting

Technological

sales of all alcohol. Bundaberg Rum have the use of online sales services through their

advances Economic situation Political / legal

own website and other alcohol sales sites. Looking to increase sales and profits. Needs to operate legally.

environment Appendix 5: Example of a 4-pack of 300ml bottles. Appendix 3: Graph: Type of alcohol beverage users

Appendix 4: Graph: Type of alcohol beverage usually consumed by Australians

Appendix 6: Table: sales volume of Bundaberg drinks 20132018 Geograp hy

Categor y

Australia

Alcoholic Drinks

Australia

RTDs

Australia

Spirits

Brand Name (GBO) Bundaberg (Diageo Plc) Bundaberg (Diageo Plc) Bundaberg (Diageo Plc)

2014

2015

2016

2017

Data Type

Diageo Australia Ltd

Total Volume

1.4

1.2

0.9

0.8

0.8

0.8

Diageo Australia Ltd

Total Volume

13.3

12.3

9.2

8.7

8.5

8.3

Diageo Australia Ltd

Total Volume

7.4

6.2

5.7

5.4

4.8

4.5

2013

Source: Passport 2019. Brand Shares Bundaberg (Diageo Plc). Passport. http://www.portal.euromonitor.com.ezp01.library.qut.edu.au/portal/statisticsevolution/index#

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2018

Company Name (NBO)...