QUESTION
EXECUTIVE SUMMARY(this should be a stand-alone document summarising the total recommendations, please do not write about the aim and purpose of this document)
SOLUTION
1.0 INTRODUCTION
1.1 Aim
To look at a near 200 year old company and see how marketing has evolved for it in the 21st century.
1.2 Scope
The internet age has seen the rise of many behemoth organizations which will define the way business operates over the next millennium. While the likes of Google and Facebook rewrite the history books, there are organizations which to steal a phrase are “Built to Last”. One such organization is the Foster’s Group.
My effort over the course of this case study is to examine how an organization which is now in its 19th decade of existence has leveraged the power of the world wide web, whether this is anywhere near its potential and what are the steps that need to be followed from here on out.
Because of the large portfolio of products that encapsulate the Foster’s Group, there was plenty of options in terms of choosing a product to centre this case study on. Victoria Bitter (VB) is the no.1 selling regular beer in the Foster’s portfolio (Foster’s Group 2011), but has a rather archaic website and virtually no social media connect. Carlton Draught, which is the no.1 selling draught beer (Foster’s Group 2011), in contrast has less on its website, but has a considerably more active social presence. Hence, due to the greater scope of examination I opted for the latter as the primary product that I will track in this case study.
2.0 COMPANY OVERVIEW
2.1 Background
The history of the Foster’s Group dates back to 1824 when Cascade Brewery Company was established. In 1854, the legendary Australian brand Victoria Bitter, more popularly known as VB was first brewed. Carlton Draught followed 10 years later and a rather competitive market place was beginning to take shape. The Foster brothers, after whom the company is presently named, only arrived on the scene as late as 1887, bringing refrigeration and ice to introduce Australia to the idea of having a cold one! (Foster’s Group 2011)
Under pressure with shrinking margins and poor profitability, the brewery industry decided to partner up in 1907 and Carlton & United Breweries (CUB) was born as collaboration between 6 major companies. It wasn’t until 1990 that the company was renamed Foster’s, with CUB used as the umbrella brand for its Australian and Pacific business while the International markets continuing to be handled by Foster’s, though more often than not in partnership with local players. Foster’s has nearly a 50% market share in Australia, and has been revamping its international business drastically, even selling off its interests in China after having competed in that market for over a decade without reporting a profit (DataMonitor 2011).
In December 2011, Foster’s Group was purchased by SABMiller, a South African born company which is incorporated in the United Kingdom and headquartered in London. The acquisition was valued at $10.5 billion (DataMonitor 2011).
Foster’s adventures with the internet started in 1999 when it started putting up its websites, both for the Group and for each of its key products. Over the years it started acquiring .au domains for each product and has built rather interesting websites designed to give you the ambience of being in a pub, with some background music and sharp and eye catching visuals (Whois Lookup 2012).
Its presence on Facebook is product specific, with Carlton Draught Beer and Cascade Brewery having joined Facebook as early as 2008, while Foster’s Beer opened its account on Facebook as recently as the second half of 2010. (Facebook 2012)
2.2 Products
Foster’s Group has a wide portfolio of products. Carlton United Brewers has close to 30 beer brands and additionally also caters to the ciders, spirits and non-alcoholic beverage segment. (CUB 2012)
Beer Brands – The beer brands are largely divided into two very distinct product categories. Standard and Premium. While Standard accounts for a considerably bigger share of both the product portfolio and the revenues, profit margins are squeezed and demand is sluggish. In contrast, the Premium market is growing, commands considerably better pricing and has tremendous scope for growth.
Key Brands – Abbotsford, Bluetongue, Bruers, Carlsberg, Carlton, Cascade, Crown, Fiji, Foster’s, Great Northern, Grolsch, KB, Kronenbourg 1664, Matilda Bay, Melbourne Bitter, Miller, NT, Peroni, Pilsner Urquell, Power’s, Pure Blonde, Reschs, Sheaf, Vailima and VB.
Ciders – Bulmers, Dapple, Dirty Granny, Mercury and Strongbow. Foster’s owns each of the top 3 selling Cider brands.
Spirits – From tequilas to brandy, Foster’s has quite a product range.
Non-alcoholic Beverages – water, fruit juice and soft drinks are some of the products under this category. It will be interesting to see how SABMiller leverages the fact that it is one of the leading bottlers of Coca Cola worldwide to tap into this market space. (SABMiller 2011)
2.3 Business model on Facebook
Foster’s appears to have no singular direction when it comes to their marketing strategy with respect to Social Media in general and Facebook in particular. It is important to distinguish that Foster has two clients – their buyers in the conventional definition of the term according to Michael Porter – who are largely supermarkets, retailers, etc., and the end consumer – who actually ‘consumes’ quite literally here the product.
Since they are not actually selling their products (except through company owned stores) to the end consumer, it is understandable to some extent why the company has taken so long to embrace social media. That being said, there is no dearth of television advertising that Foster’s does, and that does directly engage the consumer, though giving a direct benefit to the buyers as well.
Its business model on Facebook specifically is virtually non-existent, and has taken the shape of engaging with the consumer, but with no apparent vision in mind. What is perhaps most crucial is the lack of cohesiveness in approach for the various products that exist.
3.0 INVESTIGATION AND ANALYSIS OF THE FACEBOOK PAGE
A Facebook page is in today’s age considered the bare minimum must have when it comes to a social media strategy. Of course, it is not just enough to have a page, but what you do with it that counts.
As mentioned previously, for the scope of this assignment, we shall focus on Carlton Draught’s Facebook page. This page is listed under the Food / Beverages section of Facebook.
3.1 Resources
At the very basic level, the Facebook page uses the following tools:
a) About the Product – very minimalistic product information
b) Photos – sporadic interesting snapshots which are meant to engage the consumer. Not very intellectual, meant to derive a smile rather than make you think. Interesting, but not laugh out loud funny.
c) Fan Likes – both overall page likes and specific post likes
d) Videos – 1-2 a month. The videos are well shot and have a consistent character called a Carlton Draught Publican, but are not very engaging. They had low double digit likes and in comparison to photos which had been posted on the same site for a shorter duration, the number was abysmal.
e) Carlton Draught’s likes – mostly sports related stuff where the organization is spending some marketing dollars. There was no cross-product integration with other brands owned by the Foster’s group.
3.2 Activities
a) Simple fan contests – Facebook was seen as a media to spread information about the contest and the contest itself was not really social media specific.
b) Information about booking a brewery tour – physical not virtual. Again, the use of facebook was incidental, and the same ad could have been a mailer or a newspaper insert.
c) Fan posts – where fans interacted with the organization about a competition called ‘triple shot’
3.3 Friends
Carlton Draught had 32,285 likes as on 9th April 2012, which was 5 times the number for Foster’s Beer and 10 times the figure for Cascade Brewery. (Facebook 2012)
3.4 Use of consumer-generated contents
Fans of the product were doing little to help its popularity grow. Most of them were complaining about how points were being scored on the aforementioned game called ‘triple shot’, while on an average 2-5 fans a month were sharing something engaging which would be considered product evangelism.
4.0 BE FRIENDING THE COMPANY ON SOCIAL NETWORKS
Carlton Draught has got 30,000+ people to befriend it, but here comes the billion dollar question, what does it intend to do with them? Also, for a company like Foster’s which has a 50% volume market share, thirty grand is barely the tip of the iceberg.
To understand the potential of Facebook in the beverage industry, let’s examine what PepsiCo’s sports drink Gatorade has achieved in the last few months. After three consecutive years of declining sales, Gatorade made a desperate attempt to bounce back in 2009 with a rebranding initiative which went awry and saw sales plummet further. A new marketing effort in 2010 backed by $30 million has helped Gatorade turn things around dramatically. However, at the heart of the new exercise is social media ‘nerve center’ which is doing wonders in the United States.
Establishing a war room with specialist workers in what they call ‘Mission Control’, the Gatorade brand acquired 500,000 new fans on FaceBook five months into the launch of the new campaign. It was a round the clock initiative which works 24*7 to ensure that the brand can maximize its connect with its consumers. Social Media links into the brand’s overall marketing strategy, convincing more and more prospects about the benefits of being associated with the brand. The fan based has now crossed well over a million and through regular engagement, Gatorade is well on its way to setting new benchmarks on how to use social media effectively.
Some elements which make this possible include:
4.1 Consumer trust & loyalty
The biggest advantage of information coming through a social network is that it is being communicated by someone you trust. The two biggest sources of social media information – Facebook and twitter cannot communicate with a consumer unless that person agrees to having a relationship with either a brand or an individual. As a result, anything that comes from a trusted source will always trump information received through conventional media such as newspapers, radio or television.
While CFOs believe brands are their assets, marketers know that in the internet age, it is a loyal customer who is their most valued asset. For a product like a beverage, where lifetime repurchase is almost guaranteed, it is imperative for marketers to derive the maximum possible value out of a customer acquisition.
Research indicates that the cost of retaining a customer in most industries is usually below 1/5th the cost of acquiring a new one, and giving a customer a wow experience is undoubtedly worthy of an investment. (Sanchez 2008)
4.2 Market & Media fragmentation
Twenty years ago the world’s most expensive advertising spot used to be a 30-second ad spot during the Super Bowl. Mass Marketing was the way to reach a consumer, and marketers and product engineers seldom bothered about the individual consumer. Customization as a philosophy barely existed, and all parties involved were happy with the idea that they did the best job possible with the available resources. (Yglesias 2012)
Cut to the present, and while Super Bowl advertising continues to be ridiculously expensive, everything else stated in the aforementioned paragraph has changed. In fact, the admission that an ad spend can be determined ‘ridiculous’ in itself is an achievement. That Super Bowl Ad in the US is no longer about selling a product, it is about making a branding statement. After all, with media so well fragmented, and the customer’s mindshare so divided there just isn’t genuine value to be derived from mass advertising. Instead, reaching consumers in niche segments when they are evaluating a product is the best time to pitch to them. Today, you can talk to each of potential customers one to one, when they are playing their favourite game or even when they are checking their email, so why waste hard earned marketing dollars on one ad!
4.3 Connection through social networks
How often will an individual head to Youtube to look for a funny video? Maybe once a month at best. However, see a video on your Facebook information stream that your friend has ‘liked’, and chances are you’ll see it too. If the video evokes a positive emotion, chances are you’ll like it / share it with your friends too. And within a few hours the video has gone viral. (Eckler and Bolls 2011).
Now replace the idea of just any video with a product advertisement. Should advertisements evoke a strong emotional connect with a viewer, and instead of just consuming it like he would on Television, consumers are now asking others to see the ad. The concept of a customer being the greatest advocate for a product is hardly a new one, the entire concept of marketing strategies on building evangelists is built on it, but the idea that the consumer is running around doing the job your sales force should be doing, and that too at no cost to you, would have been considered mind boggling a decade ago. It is a reality today.
4.4 Facebook & Customer Relation Management (CRM)
All men may have been created equal, but all customers have not. (Reinartz The key to good Customer Relationship Management begins with identifying which customers deserve that extra bit more attention, because they are just so much more valuable. While in certain sectors, it is easier to identify which customers need to be pampered just that little bit more, it is almost impossible to identify which customers are special and which ones are not in an industry like beverages. (Kotler 2004)
Enter Facebook, and the entire profile of a customer becomes accessible to marketers, making it all that much easier for them to race to step 1 of good CRM. A complete user profile is a marketer’s dream, and one that has been filled in by the customer himself is likely to have that bonus element of being largely error free. Strengthening brand loyalty by targeting relevant communication to the right customer just got a lot easier. (Sanchez 2008)
5.0 ADVISE FOR A SMALL BUSINESS FACEBOOK PAGE DESIGN
In a funny way, a business with a $2.5 billion turnover is running its Facebook account in a very ‘small business’ kind of way. A lot of the steps already taken by Carlton Draught can be considered both amateurish yet very necessary in helping build your brand’s presence on a site like Facebook. More often than not, small businesses run on limited budgets and insufficient manpower. Restrictions such as these force them to innovate, and come up with cost effective approaches to marketing.
A lot of the steps undertaken by Carlton Draught towards giving itself a social presence on facebook are minimalistic yet in a funny sort of way are perfect for a small business to ape to give themselves a Facebook presence.
None of these, however, are going to take a business to the next level and what is truly needed is to not just see where social media fits into your entire marketing plan, but also to think social as well.
Once a small business owner has identified the role that social media first and facebook second play in his overall marketing strategy, he needs to build his facebook page. Here are three recommendations that are crucial to the design of the page.
5.1 Recommendation 1 – Use a professionally shot visual which is representative of your business in terms of what you do, how you do it and what your customer walks away with at the end of it. This visual is the first impression that a customer will have of your facebook page and it needs to be nothing short of awesome.
What not to do:
a) Shoot the photo yourself
b) Use a snapshot of your website homepage
5.2 Recommendation 2 – Keep communication short and succinct. The customer is almost always in a rush and doesn’t want to either be preached to or have to listen to a sermon. Written communication, whether about the brand or in direct conversation with the customer should always be short.
5.3 Recommendation 3 – The best content for a Facebook page is the type that fans or users generate, rather than you. Encourage the fans to share their experiences, photographs, participate in polls, etc. Incentives are a terrific way to make this happen using regular contests, etc. (Dell 2012)
6.0 CONCLUSION
It is all too evident from a quick study of Foster’s approach to internet marketing that they are way behind the times. The organization is yet to realize the power of the web, and the fact that it has recently been acquired by SABMiller isn’t a viable excuse either, considering the budgets at their disposal, they should have come a long way by now.
Foster’s has been struggling with its bottom line for the last couple of years, and with the Beer Industry in Australia growing at just 1.2% annually, the failure to leverage the internet is a massive miss.
However, it is never too late to change, and with a large number of their consumers upwardly mobile and technology savvy, there is a massive potential for them available to tap.
7.0 RECOMMENDATION
1. The need of the hour for Foster’s is to firstly develop a marketing strategy where they think social, rather than plugging in the internet as an afterthought.
2. Any good marketing strategy starts with a well defined goal. While a numeric element is key to a good objective statement, one question that Foster’s perhaps needs to re-evaluate is how distinctly it is currently treating each of its brands. A consolidation of thought, manpower and funds could bring them enormous economies of scale which their competitors given their considerably lower market shares, will never be able to match. While the taste of each of their products is distinct, the markets they operate in, and the way the consumer purchases them is not. This is an opportunity just waiting to be tapped.
3. Education is a key element to every social objective, and while ‘drink responsibly’ is a good mantra to have, it is just as important to walk the talk. The internet is a place where a brand can simply build great loyalty by showing how much it cares, and consumers usually respond brilliantly to that feeling.
4. Drinking beer is fun, in fact, it is largely a SOCIAL activity in itself. That is as good a reason as any to leverage social media to its fullest possibility.
5. Dedicated staff with well defined KRAs related to web dominance are just some of the crucial early steps needed to take to make this exercise a success.
6. A shift in thought leadership in an organization often needs a champion, and Foster’s needs to find both an internal voice and a public face to make this policy shift work.
8.0 REFERENCES
Chan, S 2009, ‘Beer Manufacturing’, TIER Industry Report – Beer Manufacturing, pp. 1-10, Business Source Complete, EBSCOhost, viewed 8 April 2012.
Eckler, P and Bolls P. (2011), “Spreading the Virus: Emotional Tone of Viral Advertising and Its Effect on Forwarding Intentions and Attitudes,” Journal of Interactive Advertising, 11 (2), , viewed 8 April 2012, http://jiad.org/article142.
Parker, PM 2005, ‘2006-2011 World Outlook for Foster’s Lager Beer’, World Outlook Report 2006-2011: Foster’s Lager Beer, p. 1, Business Source Complete, EBSCOhost, viewed 8 April 2012.
Sanchez, J.G. (2008), Customer Relationship Marketing: Building Customer Relationships for Enduring Profits in a Wired Economy, viewed 8 April 2012, Zunch Web site: http://www.zunch.com/zunch/files/Zunch_CRM.pdf
‘Foster’s, Lion Nathan and Pacific Beverages case study’ 2008, Foster’s, Lion Nathan & Pacific Beverages Case Study: Capitalizing On The Growing Premium Beer Market In Australia, pp. 1-8, Business Source Complete, DataMonitor, viewed 8 April 2012.
‘Beer Industry Profile: Australia’ 2011, Beer Industry Profile: Australia, pp. 1-40, Business Source Complete, DataMonitor, viewed 8 April 2012.
‘Gatorade Case Study: Using consumer segmentation and social media to drive market growth’ 2011, Gatorade Case Study: Using Consumer Segmentation & Social Media To Drive Market Growth, pp. 1-18, Business Source Complete, EBSCOhost, viewed 8 April 2012.
Facebook Page of Carlton Draught, viewed 8 April 2012, http://www.facebook.com/CarltonDraught
Facebook Page of Foster’s Beer, viewed 8 April 2012, http://www.facebook.com/fostersbeer
Foster’s Group, 29th September 2011, 2011 Business and Sustainability Report, viewed 8 April 2012,
Foster’s Group, 2nd December 2011, SABMiller plc Acquisition Explanatory Booklet for Shareholders, viewed 8 April 2012.
http://www.fostersgroup.com/common/files/FOST0374.2_Fosters_Group_Scheme_book_AW_LR_v12.pdf
Carlton United Brewers (CUB), n.d., Beer Portfolio viewed 8 April 2012, http://cub.com.au/beer/
Dell, 23 March 2012, Social Media Toolkit, viewed 8 April 2012, http://en.community.dell.com/dell-blogs/direct2dell/b/direct2dell/archive/2012/03/23/introducing-the-small-and-medium-business-social-media-toolkit.aspx
Kotler P, Summer 2004, Volume 15 Issue 2 Business Strategy Review, Interview with Philip Kotler, viewed 8 April 2012, bsr.london.edu/files/357/BUSR310.pdf
Reinartz W and Kumar V, The Mismanagement of Customer Loyalty, Harvard Business Review, July 2002, viewed 8 April 2012.
Yglesias M, 2nd February 2012, I Paid $4 Million for This?, Slate, viewed 8 April 2012,
http://www.slate.com/articles/business/moneybox/2012/02/i_paid_4_million_for_this_.html
Whois Lookup, 2012, viewed 8 April 2012, http://www.whois.net/
9.0 APPENDICES
9.0.1 Appendix1- Screen shot of Facebook page
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