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Autor: anton 23 July 2011
Words: 6041 | Pages: 25
This report was to Joel Haire, who is the Master of Marketing convenor of Sales Management in Swinburne. The report is focus on sales strategy, implementation and operating plan for FosterÐ²Ð‚â„¢s Group Limited, which is one of the Australian largest alcohol companies. It was written by four Swinburne students, who are Master of Marketing, Diego, Desmond, Gemala, and Jie. The purpose of the report is to design a sales strategy for ForsterÐ²Ð‚â„¢s Group on beer destination division in Australia so that improve FosterÐ²Ð‚â„¢s sale revenue and volume. In the report, we mainly focused on sales team of Foster, not too much about the marketing part.
Before starting to write this report, we did many researches. The information of Foster we searched from Swinburne University library database, EBSCOhost, the Internet, and FosterÐ²Ð‚â„¢s Group official website. These data are FosterÐ²Ð‚â„¢s annual reports and IBIS report. We not only collected the written reports and journals, but also interviewed one of FosterÐ²Ð‚â„¢s staff, Benjamin Cairnes, who is FosterÐ²Ð‚â„¢s Group Business Development manager and work for two years in Foster.
In the report, firstly, we defined the playing arena of Foster. Secondly, identify FosterÐ²Ð‚â„¢s missions, sales and revenues in the past. Thirdly, evaluate the external sales environment, including customer and competition analysis. Fourthly, forecasting the future external scenario. Fifth, analysing the existing sales operations, and evaluating it through gaps, key successful factors, and SWOT analysis. Finally, we gave Foster the recommendation on sales operation strategy for the next three years, and also evaluated the pros and cons of the three strategies and give the best recommended strategy.
Table of Content
Executive Summary 1
1.0 Introduction 3
2.0 Define the playing arena 3
2.1 Value proposition 3
2.2 Customer 3
2.3 Geography 4
3.0 Identify Enterprise Requirements 4
3.1. Corporate brands/ Mission 4
3.2. Sales and revenues 4
4.0 External Sales Environment 5
4.1 Customer analysis- individual/ organization 5
4.1.1 Purchase behavior and Influence 5
4.1.2 Interaction requirement 5
4.2. Competition 6
4.2.1. Territory Design 6
4.2.2. Resources and Sales Staff 6
5.0 Forecast future external scenario 8
6. Existing sales operations 8
6.1 Target customer 8
6.2. Objectives and sales revenues 8
6.3. Structure 9
6.4. Resources Ð²Ð‚â€œ Sales Staff 9
6.4.1. Type of skills and knowledge possessed 9
6.4.2. Recruitment and selection process 9
6.4.3. Training processes 10
6.4.4. Remuneration approaches 11
6.5. Resources Ð²Ð‚â€œ Technology 11
7.0 Forecast future scenario 12
8. SWOT for Sales Operations/ GAP Analysis 12
8.1. SWOT Analysis 12
8.1.1 Strength 12
8.1.2 Weakness 13
8.1.3 Opportunities 13
8.1.4 Threats 13
8.2. Key Success Factors 14
8.3. GAP Analysis 14
9. Possible Future Strategies and Recommendations 15
Appendix 1 20
Appendix 2 21
Appendix 3 22
FosterÐ²Ð‚â„¢s Group is one of the largest brewing companies in Australia with their base of operations focusing mainly in the Asia-Pacific region. The company has established a strong base in the beer industry since the recent acquisition of Southcorp, is looking to expand their market in the wine industry. In Australia, FosterÐ²Ð‚â„¢s currently employ a sales staff of approximately 700 strong. This sales force is divided into four main divisions; the Ð²Ð‚ÑšIntegratedÐ²Ð‚Ñœ, Ð²Ð‚ÑšDestinationÐ²Ð‚Ñœ, Ð²Ð‚ÑšLocalÐ²Ð‚Ñœ and Ð²Ð‚ÑšConnectÐ²Ð‚Ñœ. Our report will strategically analyse the current sales operations of FosterÐ²Ð‚â„¢s Group and identify the key issues surrounding an efficient and successful strategy. The report will also cover both internal and external environmental factors and provide recommendations for FosterÐ²Ð‚â„¢s future sales strategy.
The body of the report will consists of 5 main parts. The first will be defining the playing field. This part gives background information of the market that the division is operating in as well as details of the division. The second part of the report covers the external sales environment which discuss about the competition and their strategies. The third part of the report discusses the internal factors of the company. The strategies and operations of the current sales force will be covered. In the fourth part of the report is about Gap and SWOT analysis. The final part of the report will cover future strategies.
2.0 Define the playing arena
2.1 Value proposition
FosterÐ²Ð‚â„¢s Group is currently AustraliaÐ²Ð‚â„¢s largest producer of alcoholic beverages. The company has always relied heavily on their beer products as the major source of their revenue but with the recent acquisition of Southcorp Limited, the country looks to dominate the wine industry as well. The company has always been well known as having a very strong beer arm but is looking currently to sell their premium wine brands. With a strong response globally to their export of Australian locally produced wines, the company hopes to further increase their Australian presence by increasing the local sales volume of these wines.
The food & beverage industry is a growing industry in Victoria. With growing awareness of the local Australian brands of wines and premium beer labels, restaurants are seeking to be able to provide for their customersÐ²Ð‚â„¢ needs. Many Australians do have the culture of having the accompaniment of alcohol with their meals and the presence of numerous premium priced restaurants offers these customers the opportunities to be exposed to the more premium brands of alcohol. Though beer has been primarily the choice of beverage as a meal accompaniment, there has been a growing trend for customers to be choosing wines as well.
FosterÐ²Ð‚â„¢s Head office is located in Melbourne. Having been in the alcohol beverage industry for a substantial number of years, plus the success of their beer brands, the company has a well established network of distributors and retailers for their beverages. Most of the companyÐ²Ð‚â„¢s restaurant retailers are located within the Melbourne CBD as well as the inner city suburbs. These different suburbs are further divided into significantly different food styles and types. For example, restaurants located in the north of the city in Lygon Street consist mainly of Italian style cuisines and the suburbs of Southbank and South Yarra consists of restaurants that are serving a more premium clientele.
3.0 Identify Enterprise Requirements
3.1. Corporate brands/ Mission
FosterÐ²Ð‚â„¢s have a simple vision. It is Ð²Ð‚ÑšTo be one of the worldÐ²Ð‚â„¢s great drink companiesÐ²Ð‚Ñœ. FosterÐ²Ð‚â„¢s own market and distribute an international portfolio of beer, wine, spirits, cider and non-alcohol brands and our products are sold in more than 155 countries. They continually improve their practices to minimize negative impacts and maximize the positive social, environmental and economic outcomes of our business operations (FosterÐ²Ð‚â„¢s sustainability report 2007).
3.2. Sales and revenues
According to FosterÐ²Ð‚â„¢s Sustainability report (2007), in year 2007 the net sales revenue in Australia and Asia Pacific has reached $ 2.9 billion. The sales volume for beer is 107.5 million, $ 11.7 million for wine, and other categories for $ 6.9 million which brings to a total of $ 126.1 million. As for the Earnings Before Interest and Tax (EBIT) it results in the amount of$ 870 million.
4.0 External Sales Environment
4.1 Customer analysis- individual/ organization
4.1.1 Purchase behavior and Influence
Purchasing an alcoholic beverage such as beer falls into low involvement/ emotional category. The gratification customers get from alcoholic beverage is emotional or sensual; it doesn't last a long time. Therefore, customers do not spend a lot of time thinking about the purchase (Solomon 2007). Customers are also likely to undergo purchase behaviour before deciding to buy a product. The purchase behaviour is defined through the five-stage purchase decision making process which is illustrated below:
Figure : Five stage purchase decision making process
Despite its main function to quench oneÐ²Ð‚â„¢s thirst, the need to consume beer might arise due to the need to socialize, peer pressure, part of a job (businessmen, bartender, chef), and more. Customers with no past experience might rely on personal sources such as friends and family to help them decide before finally making a purchase. The work of salespeople and advertising also plays a major role for customers with no knowledge of the product. As for FosterÐ²Ð‚â„¢s, customers then would go though an alternative evaluation process. They would probably seek for factors such as the amount of alcohol per bottle/ can, or more subjective factor such as prestige of the brand. The decision is then made, where act of purchasing might also depends on terms of sale and customerÐ²Ð‚â„¢s past experience buying from the seller. After buying the beer, the consumer compares it with expectations and is either satisfied or dissatisfied. This will then leads to their repeat purchase behaviour, depending on their level of customer satisfaction. At this stage, the cognitive dissonance process begins. The major deciding factor for this product is the taste of the beer itself, whether the quality of the product is worth the price. As for influence on the purchase, it might depend on which category the consumer belongs to. Alcoholic beverage such as FosterÐ²Ð‚â„¢s brand perhaps is highly influenced by advertisements and the fact that it is already a well recognized brand.
4.1.2 Interaction requirement
In order to increase the sales for FosterÐ²Ð‚â„¢s beer is by selling them during football match which has been done in Australia. The key success factor to promote and sell more is have them sold in places and sponsoring events where male dominates the market. Trained salespeople might offer free drinks as free tasting at the beginning and build good rapport with the customers during the launch of new products. Foster also has done interaction by leading customerÐ²Ð‚â„¢s relationship by performing on going community involvement. The after sales interaction will mostly done through giving feedbacks and comments through customer services and enquiries that can be uploaded on FosterÐ²Ð‚â„¢s website.
Foster's and Lion Nathan account for around 80% of industry revenue. However, Coopers and J Boag & Son (Boag's) have been encroaching into markets of the two larger industry players over the current period. These top four players account for around 87% of industry revenue. The information of the competition was based on Lion Nathan Since they are major competitors of FostersÐ²Ð‚â„¢ (IBIS World 2007).
4.2.1. Territory Design
The Liquor stores, wholesalers and licensed grocers segment is dominated by Coles and Woolworths and their associated liquor outlets. These two companies account for the majority of the packaged (bottled and canned) beer in Australia. Supply chain management to meet to the requirements of Coles and Woolworths is critical to the beer industry given that packaged beer accounts for approximately 75% of revenue and is growing as a proportion.
The major markets for draft beer are hotels and clubs. The two market leaders, Foster's and Lion Nathan, previously integrated vertically by acquiring many pubs and hotels to promote the sale of their products - sometimes exclusively - at such establishments. However, recent strategy has seen them divest ownership of such establishments to focus on the core operations of brewing and marketing.
Other hospitality establishments such as restaurants and cafes account for around 5.9% of sales revenue. Some beer is supplied via wholesalers - the largest being Metcash - which also supply independent liquor stores and licensed grocers (IBISWorld 2007).
Based on this, we assume they design their territory by estates, then metropolitan and rural areas, and within the metropolitan areas they divide the territories by segments, types of customers and venues.
4.2.2. Resources and Sales Staff
Skills and knowledge possessed
For the position of Precinct Sales Executive the candidate has to possess the following skills:
Ð²Ð‚Ñž sound business acumen, strong planning and negotiation skills
Ð²Ð‚Ñž computer literacy and administrative abilities
Ð²Ð‚Ñž relevant tertiary qualifications will be highly regarded
Ð²Ð‚Ñž proven sales experience in a Fast Moving Consumer Goods (FMCG) environment (Lion Nathan 2007)
Recruitment and Selection Process
1. Submission of cover letter and CV online, plus a short assessment test which itÐ²Ð‚â„¢s sent via email.
2. The first interview is usually held by the hiring leader; they will give a detailed understanding of the position, ask some behavioural type questions and offer to ask questions back.
3. The candidate is then, invited to complete an occupational ability / psychometric assessments.
4. The second interview is generally with the hiring leaderÐ²Ð‚â„¢s leader and a member of their people and culture team.
5. References check itÐ²Ð‚â„¢s conducted with the participantÐ²Ð‚â„¢s permission (Lion Nathan 2007).
This information was not available, so for the purpose of the report, we assume they have a similar training process to the one that FostersÐ²Ð‚â„¢ uses. The new sales person has to have certain level of knowledge about the category him or her itÐ²Ð‚â„¢s going to handle, and then they will attend to a three day introduction to the organization program. Then an online training program itÐ²Ð‚â„¢s available for them, so the can learn tools to be more efficient and effective within their role.
We assume that the remuneration for a sales executive can be similar to the one used by FostersÐ²Ð‚â„¢, the sales executive can be on a based salary, plus commissions depending on quarterly targets, plus extra incentives depending on individual results.
Resources and Technology
We also assume they have to be equipped with laptops, cars, cell phones, plus travel expenses, client entertainment and product testing.
Control and evaluation processes
It was assumed that the sales team has being measure by meeting the quarterly and yearly targets, method used by FostersÐ²Ð‚â„¢.
5.0 Forecast future external scenario
The Australian beer market has experienced moderate, fluctuating growth rates in recent years. Looking forward, the moderate growth of the market value is expected to continue with slight year-on-year decline in growth rates.
The Australian beer market generated total revenues of $3,001.8 million in 2006, this representing a compound annual growth rate (CAGR) of 1.8% for the five-year period spanning 2002-2006. Market consumption volumes increased with a CAGR of 0.6% between the years 2002-2006, to reach a total of 2,142 million liters in 2006. The market's volume is expected to rise to 2,219.1 million liters by the end of 2011, this representing a CAGR of 0.7% for the 2006-2011 period. Standard lagers proved the most lucrative for the Australian beer market in 2006, generating total revenues of $1,319 million, equivalent to 43.9% of the market's overall value. In comparison, sales of premium lager generated revenues of $637.6 million in 2006, equating to 21.2% of the market's aggregate revenues. The performance of the market is forecast to follow a similar pattern, with an anticipated CAGR of 1.7% for the five-year period 2006-2011 expected to drive the market to a value of $3,260.8 million by the end of 2011 (Datamonitor 2006).
6. Existing sales operations
6.1 Target customer
FosterÐ²Ð‚â„¢s target market is very broad as they have a wide range of brands throughout the world that appeal to many different people. However, FosterÐ²Ð‚â„¢s beers will be aimed at mainly a male market, between the ages of 18 to 70. In Victoria region itself, FosterÐ²Ð‚â„¢s have allocated 90 sales representatives. With FosterÐ²Ð‚â„¢s providing a variety of beer brands, the company has classified each brand which targeted different target markets as well. (Appendix 1).
6.2. Objectives and sales revenues
The objective of the specialist customer teams is to create support/ compliment FosterÐ²Ð‚â„¢s product and brand offering to customers by building sustainable growth which results in superior financial performance. The reported net profit is 966.2 million Australian dollars (US$796.7 million) for the year ended June 30, 2007; down from AUD $1.17 billion a year before (The Australian 2006). This is a result of the sales strategy in reinforcing FosterÐ²Ð‚â„¢s strategy in highlighting the wine products internationally. Fosters expects global volumes to be similar to the last result. The current companyÐ²Ð‚â„¢s financial objective is to have annual normalized EPS growth of 10 per cent (The Australian 2006). Most of the time, the objectives are split by quarters, depending on the situations which will be measured by its margin target (Benjamin Cairnes, 2007, pers comm., 9 November).
In order to distribute the products, FosterÐ²Ð‚â„¢s has developed a new customer facing design model which focuses on four specialist customer teams. Each sales team is assigned to meet the demands of the existing FostersÐ²Ð‚â„¢ customer segments (refer to Appendix 2).
6.4. Resources Ð²Ð‚â€œ Sales Staff
6.4.1. Type of skills and knowledge possessed
In order for the sales team to perform well, they have to possess the required skills and knowledge related to the company background as well as excellent selling competencies.
This position for FosterÐ²Ð‚â„¢s sales assistant will mostly involve the ability on pro-active selling. However, it also depends on its variety of job position. Knowledge products and strong communication skills are strongly required for all sales divisions (refer to Appendix 3 for more specific details on FosterÐ²Ð‚â„¢s sales team).
6.4.2. Recruitment and selection process
Like other major companies, FosterÐ²Ð‚â„¢s used to following media to recruit staff: by graduate programs, by recruitment agency, and by advertising on mass media.
The graduate programs help Foster to bring fresh enthusiastic youth into the company. Fresh graduates are usually the least difficult to train as they were not entitled to any other organizations before. Despite the lack of work experience, companies would often take this opportunity to shape the behaviour of each staff in becoming suitable to the companyÐ²Ð‚â„¢s mind set and its work attitude.
As for higher level positions in the likes of sales manager or territory manager FosterÐ²Ð‚â„¢s will seek professional help from recruitment agencies. FosterÐ²Ð‚â„¢s also release recruitment advertisements on mass media like newspapers. Recruitment agencies are also useful when FosterÐ²Ð‚â„¢s are having trouble of short staffed especially in the sales department.
The most popular and technology advanced method is perhaps by putting up advertisings on career websites as well. FosterÐ²Ð‚â„¢s also provide a Ð²Ð‚?career sectionÐ²Ð‚â„¢ on its website, from where candidates can search for job opportunities and the access to upload their resumes.
During the recruitment process online people may be asked to participate in one or more of the following exercises (FosterÐ²Ð‚â„¢s recruitment processÐ²Ð‚â„¢ online 2005):
Ð¿Ñ“? Phone interviews/ personal interview
Ð¿Ñ“? Behaviour (Targeted Selection) Interviews
Ð¿Ñ“? Psychometric testing
Ð¿Ñ“? Skills testing (i.e. computer skills)
Ð¿Ñ“? Reference checks
Ð¿Ñ“? Pre-employment medical
Ð¿Ñ“? Intelligence test
All candidates interviewed will be invited to participate in online feedback to provide FosterÐ²Ð‚â„¢s with comments to support and improve the ongoing recruitment activities. FosterÐ²Ð‚â„¢s has also developed a tailored, rigorous Ð²Ð‚Ñštalent assessmentÐ²Ð‚Ñœ process rolled out annually and processed during the mid of the year.
6.4.3. Training processes
FosterÐ²Ð‚â„¢s has its own development and learning program in order to enhance the sales team performance called the FosterÐ²Ð‚â„¢s Sales Academy (FSA). FSA has been established providing development tools, learning pathways and capability opportunities for their sales teams. External sales best practice programs CHEERS PLUS (advanced selling) and Advanced Negotiation Skills have recently been included under the FSA umbrella specifically for their experienced sales team members (FosterÐ²Ð‚â„¢s sustainability report 2007).
The company has also developed three types of on-line wine education training programs with the topic on product general knowledge. The three types of trainings are divided to Wine Edge, World of Wine and WAFT (Wine Aroma Flavour Training) (Education accolades for fosterÐ²Ð‚â„¢s 2006).
1. Wine Edge Training
Wine Edge has 10 classes, which are broken into modules, and each class has a quick quiz at the conclusion to reinforce learning, before the next class can begin. The online format allows for the inclusion of tasting notes and video modules showing Foster's wineries and vineyards. On completion of the Wine Edge training the sales people will continue to be able to access all sorts of information on key selling points, wine styles, tasting notes, food & wine matching, grape varieties, wine regions and anything else to do with wine. The aim is that Wine Edge will become an ongoing reference resource, to aid them in selling FosterÐ²Ð‚â„¢s brands. Once Foster's has completed training its sales force, it is hoped to roll this education program out to key trade and customers and eventually wine drinkers (Education accolades for FosterÐ²Ð‚â„¢s 2006).
2. World of Wine Training
World of Wine is an interactive day of theory, practical activities and tastings. This one-day training module has been rolled out across the business. During the day participants learn about white, red and fortified wine production, labelling, cellaring and decanting. The course also has an interactive element with wine tasting and concludes with a section on food and wine matching (Education accolades for FosterÐ²Ð‚â„¢s 2006).
3. WAFT (Wine Aroma Flavour Training)
WAFT equips Foster's product tasters with the confidence to critically assess the quality of wines, ensuring a proactive approach to product consistency, brand identity and consumer expectations. WAFT runs over a year, is delivered in monthly sessions with production staff. The aim is to progressively develop and maintain their palates over time, through sensory education. The Foster's team collaborated in the creation of WAFT to identify common product aroma and taste faults which formed the basis of the sensory program (Education accolades for FosterÐ²Ð‚â„¢s 2006). It is also supported by an extensive reference manual.
6.4.4. Remuneration approaches
The remuneration approach for the sales team is salary based and to provide a quarterly bonus scheme in order to motivate their sales people. FosterÐ²Ð‚â„¢s also apply sales contest where sales staffs have to collect reward points. The winners will then be awarded cash as the main prize (Benjamin Cairnes 2007, pers comm., 9 November)
6.5. Resources Ð²Ð‚â€œ Technology
Computer systems and Database
Database is important to help sales department in keeping and managing customer information and details. It also helps in managing key accounts, a very important aspect for sales forces to identify the potential future customers.
corProcure is an independent, stand-alone, internet-based indirect goods and services marketplace open to all existing and new suppliers (FosterÐ²Ð‚â„¢s in leading e-procurement alliance 2000). The intention is to form Australia's first multiple-industry business to-business e-marketplace. It is expected to deliver new transaction efficiencies and standards as well as significant business networking opportunities across the supply chain. The benefit for buyers is a more simple ordering process and an improvement in the order accuracy.
Call Centre/ Customer Service
Call centers are provided to use after the purchase of a product. The service does not directly affect the selling process, yet the comments and feedbacks from existing customers are useful for future improvement especially in the sales department.
Maximum use of communication tools
The sales team is using the technology advancement to simplify the function of administration work. By using palmpilots and mobile phones such as PDA, the sales team is able to work and calculate the number and data sales progress and have them instantly processed to the data files. This method is useful to avoid the hard work of dealing with loads of paperworks (Benjamin Cairnes 2007, pers.comm., 9 November).
7.0 Forecast future scenario
The current FosterÐ²Ð‚â„¢s sales team is distributing their products through their regular retailers. There is a lack of communication in terms of customer relationship. One effective approach is by maximizing the customer service and proposing a more in-depth customer relationship management in order to gain more knowledge and insight from FosterÐ²Ð‚â„¢s consumers. This step is to ensure the stability of sales and to develop a two way relationship among the company and customers.
FosterÐ²Ð‚â„¢s might also expand more room in its flexibility to develop sales relationships with a diverse range of customers with differing requirements, for example in multi beverage, wine specialists, and on-premise specialists. FosterÐ²Ð‚â„¢s is facing price competition from its competitors as well, therefore FosterÐ²Ð‚â„¢s might be able to perform a brand prioritization and manage its promotions across the customer base.
8. SWOT for Sales Operations/ GAP Analysis
8.1. SWOT Analysis
Ð²Ð‚Ñž Global brand - FosterÐ²Ð‚â„¢s has strong brands. Wolf Blass and Beringer enjoy strong brand equity in the Australian and international market. The company also has the Cougar Bourbon brand in the spirits market (Forster 2006).
Ð²Ð‚Ñž Largest selling beer brand in the world - the worldÐ²Ð‚â„¢s third most widely distributed brand, available in more than 150 countries (Forster 2006).
Ð²Ð‚Ñž Wide range of beer products - Carlton and United Breweries, the companyÐ²Ð‚â„¢s beer arm has strong brands like Victoria Bitter, Carlton Draught, Crown Lager and Cascade Premium (Forster 2006). Customer value choice and diversity is Foster Group emphasis on.
Ð²Ð‚Ñž Sales promotion - sales promotions play an important role in FosterÐ²Ð‚â„¢s marketing strategies. The best known of these were Ð²Ð‚Ñšthe VB CouchÐ²Ð‚Ñœ whereby consumers entered a competition for the ultimate day at a one day game after having purchased a carton of VB. Another sales promotion involved prizes for groups of people to go to AFL, Rugby league and Super 12 Rugby games (Forster 2006).
Ð²Ð‚Ñž FosterÐ²Ð‚â„¢s has a very strong distribution network. The company distributes its products through wholesalers in some countries and in Australia it uses a variety of distribution channels. The company also owns pub chains in Australia (Forster 2006).
Ð²Ð‚Ñž Australian owned company. Based on the country-of-origin, it wins a good reputation in Australia.
Ð²Ð‚Ñž Competitive pricing is also a consideration with FosterÐ²Ð‚â„¢s having to remain competitive in the market place with all of its products.
Ð²Ð‚Ñž Falling per head beer consumption in Australia
Ð²Ð‚Ñž The demand for the companyÐ²Ð‚â„¢s products is price sensitive. It includes the sale price, sale volume, and operating cost. In order to increasing the sales, Foster could use the visual ads like billboards in each restaurant to persuade them to purchase.
Ð²Ð‚Ñž Maximise customer service
Ð²Ð‚Ñž Further acquisition of outlets (hotels).
Ð²Ð‚Ñž Meet customersÐ²Ð‚â„¢ demands in order to increase the sales revenue and volume.
Ð²Ð‚Ñž Public demand for imported beer
Ð²Ð‚Ñž Intense competition - Competition from other beer companies, in particular the boutique breweries
Ð²Ð‚Ñž Decline in beer market - The per capita beer consumption is declining in Australia. This would have a long-term impact on the earnings growth of FosterÐ²Ð‚â„¢s beer segment. In addition, the popularity of ready-to-drink beverages has been adversely impacting the beer industry growth. FosterÐ²Ð‚â„¢s derives a significant part of its revenues from the beer segment.
Ð²Ð‚Ñž Global brand
Ð²Ð‚Ñž Largest selling beer brand in the world
Ð²Ð‚Ñž Wide range of beer products
Ð²Ð‚Ñž Sales promotion
Ð²Ð‚Ñž Strong distribution network.
Ð²Ð‚Ñž Australian owned company. Ð²Ð‚Ñž Competitive pricing
Ð²Ð‚Ñž Falling per head beer consumption in Australia
Ð²Ð‚Ñž Maximize customer service
Ð²Ð‚Ñž Further acquisition of outlets (hotels) Ð²Ð‚Ñž Public demand for imported beer
Ð²Ð‚Ñž Intense competition
Ð²Ð‚Ñž Decline in beer market
8.2. Key Success Factors
The key success factors in the Beer and Wine Manufacturing industry are (IBISWorld Industry 2007):
Ð²Ð‚Ñž Market research and understanding - ability to identify the geographic area into which it is appropriate and profitable to sell the firm's products.
Ð²Ð‚Ñž Establishment of brand names - brand names and promotion are important in the beer segment.
Ð²Ð‚Ñž Control of distribution arrangements - distribution arrangements (e.g. with retailers and clubs and pubs) is important in the beer segment.
Ð²Ð‚Ñž Ability to allocate product/service to area of greatest need - firms with a high proportion of premium beers within their portfolio is able to achieve higher growth rates given developing consumer tastes.
Ð²Ð‚Ñž Economies of scale - the size of the operation and hence whether the firm has access to economies of scale and the extent of capacity utilisation.
Ð²Ð‚Ñž Establishment of export markets - whether the company supplies the domestic market or the export market.
Ð²Ð‚Ñž Economies of scope Ð²Ð‚â€œ firms that manufacture a broad range of products, including other beverages, can achieve efficiencies in supporting activities such as distribution marketing and administration.
Based on the above criteria, the key success factors for FosterÐ²Ð‚â„¢s Group Limited are as followed:
Ð¿Ñ“? Strong brand Ð²Ð‚â€œ strong brands like Victoria Bitter, Carlton Draught, Crown Lager and Cascade Premium. Wolf Blass and Beringer enjoy strong brand equity in the Australian and international market (Forster Group Limited 2006).
Ð¿Ñ“? Wide product range Ð²Ð‚â€œ Foster is not only producing beer, but also walking into wine and other beverage industries in order to satisfy customersÐ²Ð‚â„¢ needs and enhance the brand image.
Ð¿Ñ“? Strong distribution network Ð²Ð‚â€œ The Company distributes its products through wholesalers in some countries and in Australia it uses a variety of distribution channels. The company also owns pub chains in Australia (Forster 2006).
Ð¿Ñ“? Be worldwide Ð²Ð‚â€œ Foster is the major player in Australian beer and wine industry, and exploring the overseas market is another objective to win more market shares and customers (Forster 2006).
8.3. GAP Analysis
Compared with the fact and expectation, the gaps will be produced. In order to take a stable and strong situation in the market, we analyse that the following gaps are based on FostersÐ²Ð‚â„¢ current destination division strategy.
Ð²Ð‚Ñž Product line gaps Ð²Ð‚â€œ Forster has a long product line, the products do not emphasis on beer; it walks into the wine and other beverage industries to fill in the market needs.
Ð²Ð‚Ñž Distribution gaps Ð²Ð‚â€œ As an Australian brand, Forster has covered the whole of the country, and also are highly concentrated on the distribution so that minimizing the distribution gap.
Ð²Ð‚Ñž Competitor gaps Ð²Ð‚â€œ Although Foster owns a large market share in beer market (50%) (IBISWorld Industry 2007), the competition among Forster and other competitors, such as Lion Nathan Limited, Coopers Brewery Limited, ABB Grain Ltd and J Boag & Son Pty Limited, is continuing strong. Most of them are seeking the more product opportunities to increase the sale volume and revenues.
Ð²Ð‚Ñž Current sales gaps Ð²Ð‚â€œ Compared with other rivals, the sales revenue is the highest in the whole wine market. It achieved revenue growth of 6.6%, to $2,007 million (IBISWorld Industry 2007).
In conclusion, among the four gaps, the competitor gap is larger than other gaps. In order to decreasing the gaps, we will define a new strategy for Foster to continue increasing the sales. Therefore, it is obviously that there is still plenty of potential market of FosterÐ²Ð‚â„¢s Group.
9. Possible Future Strategies and Recommendations
1. Developing a Specialized Wine Selling Team
Currently, the FosterÐ²Ð‚â„¢s Group brand image and recognition comes from their regular beer brands. With the acquirement of Southcorp, the company hopes to increase their market share in the wine market. With a new portfolio of wines that includes a greater number of premium brands, a specialized team of salespersons who are better trained in wine knowledge could be use to better promote and sell the wines.
The new team would be able to aid their clients in recommendations and more specific technical details of the wines. With this new additional knowledge and specialties, it would add to the credentials of the salesperson. This is especially useful when it comes to the sales of the more expansive premium wine brands.
Pros Weight Cons Weight
Ð¿Ñ“? FosterÐ²Ð‚â„¢s has been concentrating on its wine selling
Ð¿Ñ“? Wine is gaining more popularity among FosterÐ²Ð‚â„¢s customer
Ð¿Ñ“? An opportunity to increase its market in the wine area, especially if the effort is enforced by a strong specialist team
Ð¿Ñ“? FosterÐ²Ð‚â„¢s have already applied the product knowledge online training
Ð¿Ñ“? Not each sales team are expected to be familiar with the internet training
Ð¿Ñ“? Might cost more to have more trainings
2. Strengthen Relationship with Intermediaries
The sales of the products of FosterÐ²Ð‚â„¢s Group rely heavily on the promotion of their products by their retailers and restaurants. As these intermediaries also carry a variety of products from FosterÐ²Ð‚â„¢s competitors, having good relationships with them will help ensure that they will promote products from our company to our clients. Our intermediaries at the point of sales will have tremendous effect on the final choice that the consumers eventually make.
Pros Weight Cons Weight
Ð¿Ñ“? Maintaining good relationship with the dealers will directly affect the sales margin
Ð¿Ñ“? This is by far the current strongest strategy FosterÐ²Ð‚â„¢s has performed
Ð¿Ñ“? The payback could be seen in a relatively shorter term
Ð¿Ñ“? End users are more important from a long-term view
Ð¿Ñ“? Difficulties to create boundaries, as both parties intend to gain maximum profit
Ð¿Ñ“? DealersÐ²Ð‚â„¢ satisfaction may not necessarily affect the sales performances
3. Utilizing Customer Relationship Management (CRM) System
Most of the salespeople that are in the FosterÐ²Ð‚â„¢s Group deal directly only with the retailers or restaurant owners. They do not have direct contact with the consumers and currently are only able to meet the demands of their retailers. Though primarily the main duty of the salesperson is to meet the requirements of their immediate clients, the salesperson could be better utilized to gain the insights of the consumers.
Through this system, the company will be able to gather more immediate and up to date information on what the consumers want and will be able to make use of these information to better market or even make improvements to their products to suit their needs.
Pros Weight Cons Weight
4. After sales service and support are crucial in every industry
5. An excellent CRM represents the image of the company
6. The availability of customersÐ²Ð‚â„¢ data
7. Long-term payback 5
2 8. Might need more cost in terms of additional CRM training
9. Customers are likely to try another brand when going on second purchasing
10. Unpredictable return on investment
11. The system is too complex and may be used ineffectively 3
TOTAL 15 13
Based on the total weighted score above, the most effective step for FosterÐ²Ð‚â„¢s sales team is to enhance the customer relationship management. Apart from attempting to reach maximum profit, the sales team should enhance more on creating and maintain a good relationship among its consumers. CustomerÐ²Ð‚â„¢s comments and feedbacks relating to the product might be the essential key to ensure the life cycle of the product. It also provides a glimpse and personal insights to help FosterÐ²Ð‚â„¢s maintain the quality of their wide range of products and also build a good image of the company.
Datamonitor 2006, Beer industry profile: australia, viewed 12 November 2007, http://web.ebscohost.com.ezproxy.lib.swin.edu.au/bsi/detail?vid=16&hid=103&sid=fc14d8e8-c7c2-4bc5-9b4c-f4232f828931%40sessionmgr106
FosterÐ²Ð‚â„¢s Group 2007, ABN Amro beverages conference, viewed 7 November 2007,
www.fosters.com.au/mediacentre/ docs/20070523(ABN), Final.pdf.
FosterÐ²Ð‚â„¢s Group 2006, Education accolades for fosterÐ²Ð‚â„¢s, viewed 12 November 2007, http://fosters.com.au/enjoy/C6BFE229BDE64CA8A62E74ED1EC78DF9.htm.
FosterÐ²Ð‚â„¢s Group 2006, ForsterÐ²Ð‚â„¢s Group Limited, viewed 09 November 2007, http://www.fosters.com.au/aboutus.
FosterÐ²Ð‚â„¢s Group 2007, FosterÐ²Ð‚â„¢s group limited sustainability report 2007, viewed 2 November 2007, http://www.fosters.com.au/about/docs/FGL_Sustain07_web_FINAL.pdf
FosterÐ²Ð‚â„¢s Group 2000, FosterÐ²Ð‚â„¢s in leading e-procurement alliance, viewed 11 November 2007, http://www.fosters.com.au/mediacentre/9a65ce5d796c4bd5b9f1f50e9c1c6fab.htm
Fosters Group 2005, Recruitment process online, viewed 5 November 2005,
FosterÐ²Ð‚â„¢s Group 2005, Strategy briefing: a unique consumer led, customer driven business, viewed 3 November 2007, http://www.fosters.com.au/investors/docs/FostersWineEstates.pdf
IBISWorld Industry 2007, Beer and Malt Manufacturing in Australia, viewed 09 November 2007, p 20
Lion Nathan 2007, Careers precinct sales executives lion nathan 2007, viewed 12 November 2007, https://lion.taleo.net/servlets/CareerSection?art_ip_action=FlowDispatcher&flowTypeNo=13&pageSeq=2&reqNo=31400&art_servlet_language=en&selected_language=en&csNo=2#topOfCsPage
Solomon, MR 2007, Consumer behaviour: buying, having, and being, 7th edn, Pearson Prentice Hall, New Jersey.
The Australian 2006, Drought won't lower sales: fosterÐ²Ð‚â„¢s, viewed 10 November 2007,
The Associated Press 2007, Australia's fosterÐ²Ð‚â„¢s group profit down 17 percent, viewed 11 November 2007, http://www.iht.com/articles/ap/2007/08/28/business/AS-FIN-EARNS-Australia-Fosters.php
Source: ABN Amro Beverages Conference, 2007
Brand provided Vision Consumer target Propositions Target customer profile
Victoria Bitter Championing the common man The good bloke in every man Go The Extra Yard with VB Midstrength Lager Masculine, capable, down to earth, optimistic
Carlton MID Be yourself The younger family men Every guy deserves MID time In-Touch, switched on, resourceful/ creative, down to earth
Cold Inspiring unashamed enjoyment Males from all walks of life There is a lot in life to celebrate Self assured, open, Australian refined
Specialist Customer Team Definition Service Example
INTEGRATED Includes customers whom typically have a relationship at many levels, across a full suite of service offerings Typically like functions in both businesses work closely together on solutions across key account management, central buying, comprehensive trading terms, scan data, and merchandising Large retailers like Woolworths and Coles Myer
DESTINATION Customers where the venue provides a consumer unique experience We provide business solutions and insights around food beverage, and food matching, menu design, venue marketing, bar and venue design, education and training, precinct expertise Fine wine retailing, casinos, theme bars, resorts, fine dining restaurants, five star hotels
LOCAL Traditional local hotel and clubs, including groups and banners; on and off premises. Relationships with the owner/ operators are the key Executed at a local level; services and support based on local needs in their immediate geographic area; local trading environment; competitor and community issues are important The local metropolitan/ suburban hotel and bottle shop
CONNECT Small customers, geographically remote, or difficult to reach Remote nature means they require technology based connections with Fosters across access tools like telephones or web based solutions. Many are currently being serviced b wholesales and other indirect channels Remote (regional) hotels, cafes, clubs, bistros, restaurants, and other small customers
Source: Fosters Australia Strategy Briefing, 2005
Senior Sales Manager Ð²Ð‚Ñž Minimum of five years previous professional experience in sales analysis, finance, accounting, marketing analysis, or equivalent required.
Ð²Ð‚Ñž Experience in people management skills.
Ð²Ð‚ÑžWine / alcohol beverage industry experience desirable, but not required.
Ð²Ð‚Ñž Strong quantitative and qualitative analytical skills
Ð²Ð‚Ñž Excellent organization skills, multi-tasking, and project management skills required, including the ability to manage multiple competing priorities essential.
Ð²Ð‚Ñž Excellent verbal and written communication skills required. Ability to persuasively make recommendations to Sales Management
Ð²Ð‚Ñž Ability to manage tasks and to exercise independent judgment without supervision required.
Ability to maintain positive work atmosphere by communicating effectively with clients, management, peers, and subordinates.
Ð²Ð‚Ñž Must be a person of high integrity and commitment and possess a strong work ethic.
Ð²Ð‚Ñž Valid driverÐ²Ð‚â„¢s license
General Sales Manager
Ð²Ð‚Ñž Experience in wine/ alcohol beverage industry desirable, but not required
Ð²Ð‚Ñž Ensure achievement of department vehicle sales and profit objectives
Ð²Ð‚Ñž Management of a professional sales force
Ð²Ð‚Ñž Strong leadership qualities with good communication and interpersonal skills
Ð²Ð‚Ñž Establish and maintain practices designed to train, develop and motivate department employees
Ð²Ð‚Ñž Organizational skills
Sales Managers Ð²Ð‚Ñž Experience in a sales role in the alcohol beverage industry desirable
Ð²Ð‚Ñž Excellent negotiation skills
Ð²Ð‚Ñž Well developed leadership and people skills
Ð²Ð‚Ñž Ability to build effective relationships with customers resulting in sales
Ð²Ð‚Ñž Establish and maintain practices designed to train, develop and motivate department
Ð²Ð‚Ñž Plan merchandising, advertising, publicity campaigns and other promotional activities in line with company issued targets
Sales Consultant Ð²Ð‚Ñž Some sales experience (not necessarily in the wine/ alcohol beverage industry)
Ð²Ð‚Ñž Excellent communication skills and negotiation skills
Ð²Ð‚Ñž Enjoy working with people
Ð²Ð‚Ñž Ambition to succeed
Ð²Ð‚Ñž Highly motivated
Ð²Ð‚Ñž Excellent customer service skills
Ð²Ð‚Ñž Ability to build effective relationships with customers resulting in sales
Ð²Ð‚Ñž Valid driverÐ²Ð‚â„¢s license.
After Market Sales Consultant
Ð²Ð‚Ñž Experience in a sales or service role
Ð²Ð‚Ñž Exceptional communication skills
Ð²Ð‚Ñž Ambition to succeed the sales
Ð²Ð‚Ñž Excellent customer service skills